Document:

AMERIQUEST MORTGAGE SECURITIES INC.

                                    Depositor

                           AMERIQUEST MORTGAGE COMPANY

                                 Master Servicer

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY

                                     Trustee

                     _______________________________________

                         POOLING AND SERVICING AGREEMENT
                           Dated as of January 1, 2003
                     ______________________________________

                     Asset-Backed Pass-Through Certificates

                                 Series 2003-AR1

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                                TABLE OF CONTENTS
                                -----------------

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

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.01.   Defined Terms..................................................3
SECTION 1.02.   Allocation of Certain Interest Shortfalls.....................45
SECTION 1.03    Rights of the NIMS Insurer....................................46

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01.   Conveyance of Mortgage Loans..................................47
SECTION 2.02.   Acceptance of REMIC I by the Trustee..........................49
SECTION 2.03.   Repurchase or Substitution of Mortgage Loans by the Originator
                or the Depositor; Payment of Prepayment Charge Payment
                Amounts.......................................................50
SECTION 2.04.   [Reserved]....................................................54
SECTION 2.05.   Representations, Warranties and Covenants of the
                         Master Servicer......................................54
SECTION 2.06.   Issuance of the REMIC I Regular Interests and the
                         Class R-I Interest...................................57
SECTION 2.07.   Conveyance of the REMIC I Regular Interests; Acceptance of
                REMIC II by the Trustee.......................................57
SECTION 2.08.   Issuance of Class R Certificates..............................57

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

SECTION 3.01.   Master Servicer to Act as Master Servicer.....................58
SECTION 3.02.   Collection of Certain Mortgage Loan Payments..................60
SECTION 3.03.   [Reserved]....................................................61
SECTION 3.04.   Collection Account, Escrow Account and Distribution Account...61
SECTION 3.05.   Permitted Withdrawals From the Collection Account,
                Escrow Account and Distribution Account.......................65
SECTION 3.06.   Investment of Funds in the Collection Account, the Escrow
                Account, the REO Account and the Distribution Account.........68
SECTION 3.07.   Payment of Taxes, Insurance and Other Charges.................69

                                       ii

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

SECTION 3.08.   Maintenance of Hazard Insurance...............................70
SECTION 3.09.   Maintenance of Mortgage Blanket Insurance.....................71
SECTION 3.10.   Fidelity Bond; Errors and Omissions Insurance.................71
SECTION 3.11.   Enforcement of Due-On-Sale Clauses; Assumption
                Agreements....................................................71
SECTION 3.12.   Realization Upon Defaulted Mortgage Loans.....................72
SECTION 3.13.   Title, Management and Disposition of REO Property.............74
SECTION 3.14.   [Reserved]....................................................77
SECTION 3.15.   Reports of Foreclosure and Abandonment of Mortgaged
                Properties....................................................77
SECTION 3.16.   Optional Purchase of Defaulted Mortgage Loans.................77
SECTION 3.17.   Trustee to Cooperate; Release of Mortgage Files...............78
SECTION 3.18.   Servicing Compensation........................................80
SECTION 3.19.   Statement as to Compliance....................................80
SECTION 3.20.   Independent Public Accountants' Servicing Report..............80
SECTION 3.21.   Access to Certain Documentation...............................81
SECTION 3.22.   [Reserved]....................................................81
SECTION 3.23.   Advance Facility..............................................81
SECTION 3.24.   PMI Policy; Claims Under the PMI Policy.......................83

                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

SECTION 4.01.   Distributions.................................................84
SECTION 4.02.   Statements to Certificateholders..............................91
SECTION 4.03.   Remittance Reports and Other Reports to the Trustee;
                Advances; Payments in Respect of Prepayment Interest
                Shortfalls....................................................95
SECTION 4.04.   Allocation of Realized Losses.................................97
SECTION 4.05.   Compliance with Withholding Requirements......................98
SECTION 4.06.   Commission Reporting..........................................99
SECTION 4.07.   [Reserved]...................................................100
SECTION 4.08.   [Reserved]...................................................100
SECTION 4.09.   [Reserved]...................................................100
SECTION 4.10    Net WAC Rate Carryover Reserve Account.......................100
SECTION 4.11.   [Reserved]...................................................102
SECTION 4.12.   Excess Net WAC Rate Reserve Account..........................102

                                    ARTICLE V

                                THE CERTIFICATES

SECTION 5.01.   The Certificates.............................................104

                                       iii

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SECTION                                                                     PAGE
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SECTION 5.02.   Registration of Transfer and Exchange of Certificates........106
SECTION 5.03.   Mutilated, Destroyed, Lost or Stolen Certificates............111
SECTION 5.04.   Persons Deemed Owners........................................111
SECTION 5.05.   Certain Available Information................................111

                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

SECTION 6.01.   Liability of the Depositor and the Master Servicer...........113
SECTION 6.02.   Merger or Consolidation of the Depositor or the Master
                Servicer.....................................................113
SECTION 6.03.   Limitation on Liability of the Depositor, the Master
                Servicer and Others..........................................113
SECTION 6.04.   Limitation on Resignation of the Master Servicer.............114
SECTION 6.05.   Rights of the Depositor in Respect of the Master Servicer....115
SECTION 6.06.   Sub-Servicing Agreements Between the Master Servicer and
                Sub-Servicers................................................115
SECTION 6.07.   Successor Sub-Servicers......................................117
SECTION 6.08.   Liability of the Master Servicer.............................117
SECTION 6.09.   No Contractual Relationship Between Sub-Servicers and the
                NIMS Insurer, the Trustee or Certificateholders..............117
SECTION 6.10.   Assumption or Termination of Sub-Servicing Agreements by
                Trustee......................................................118
SECTION 6.11.   Sub-Servicing Accounts.......................................118

                                   ARTICLE VII

                                     DEFAULT

SECTION 7.01.   Master Servicer Events of Default............................119
SECTION 7.02.   Trustee to Act; Appointment of Successor.....................121
SECTION 7.03.   Notification to Certificateholders...........................123
SECTION 7.04.   Waiver of Master Servicer Events of Default..................123

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

SECTION 8.01.   Duties of Trustee............................................125
SECTION 8.02.   Certain Matters Affecting the Trustee........................126
SECTION 8.03.   The Trustee Not Liable for Certificates or Mortgage Loans....127
SECTION 8.04.   Trustee May Own Certificates.................................127
SECTION 8.05.   Trustee's Fees and Expenses..................................128

                                       iv

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

SECTION 8.06.   Eligibility Requirements for Trustee.........................128
SECTION 8.07.   Resignation and Removal of the Trustee.......................129
SECTION 8.08.   Successor Trustee............................................129
SECTION 8.09.   Merger or Consolidation of Trustee...........................130
SECTION 8.10.   Appointment of Co-Trustee or Separate Trustee................130
SECTION 8.11.   Appointment of Custodians....................................131
SECTION 8.12.   Appointment of Office or Agency..............................132
SECTION 8.13.   Representations and Warranties of the Trustee................132

                                   ARTICLE IX

                                   TERMINATION

SECTION 9.01    Termination Upon Repurchase or Liquidation of All Mortgage
                Loans........................................................134
SECTION 9.02    Additional Termination Requirements..........................136

                                    ARTICLE X

                                REMIC PROVISIONS

SECTION 10.01.  REMIC Administration.........................................137
SECTION 10.02.  Prohibited Transactions and Activities.......................139
SECTION 10.03.  Master Servicer and Trustee Indemnification..................140

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

SECTION 11.01.  Amendment....................................................141
SECTION 11.02.  Recordation of Agreement; Counterparts.......................142
SECTION 11.03.  Limitation on Rights of Certificateholders...................142
SECTION 11.04.  Governing Law................................................143
SECTION 11.05.  Notices......................................................143
SECTION 11.06.  Severability of Provisions...................................144
SECTION 11.07.  Notice to Rating Agencies and the NIMS Insurer...............144
SECTION 11.08.  Article and Section References...............................145
SECTION 11.09.  Grant of Security Interest...................................145
SECTION 11.10   Third Party Rights...........................................146
SECTION 11.11   NIMS Insurer's Rights........................................146

                                        v

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EXHIBITS

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

Schedule 1     Mortgage Loan Schedule
Schedule 2     Prepayment Charge Schedule
Schedule 3     PMI Mortgage Loans

                                       vi

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          This Pooling and Servicing Agreement, is dated and effective as of
January 1, 2003, among AMERIQUEST MORTGAGE SECURITIES INC., as Depositor,
AMERIQUEST MORTGAGE COMPANY, as Master Servicer and DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee.

                             PRELIMINARY STATEMENT:

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

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

                   REMIC I                Initial               Latest Possible
Designation    Remittance Rate     Uncertificated Balance       Maturity Date(1)
-----------    ---------------     ----------------------      -----------------
  I-LTAA         Variable(2)         $392,004,996.90           January 25, 2033
  I-LTA1         Variable(2)         $  2,382,110.00           January 25, 2033
  I-LTA2         Variable(2)         $  1,097,940.00           January 25, 2033
  I-LTM1         Variable(2)         $    170,000.00           January 25, 2033
  I-LTM2         Variable(2)         $    140,000.00           January 25, 2033
  I-LTM3         Variable(2)         $    120,000.00           January 25, 2033
  I-LTM4         Variable(2)         $     30,000.00           January 25, 2033
  I-LTZZ         Variable(2)         $  4,060,051.98           January 25, 2033
   I-LTP         Variable(2)         $        100.00           January 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loan with the latest maturity date has been designated as
     the "latest possible maturity date" for each REMIC I Regular Interest.
(2)  Calculated in accordance with the definition of "REMIC I Remittance Rate"
     herein.

<PAGE>

                                    REMIC II
                                    --------

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

                                      Initial Aggregate
                                     Certificate Principal      Latest Possible
Designation      Pass-Through Rate          Balance             Maturity Date(1)
-----------      -----------------   ---------------------      ----------------
 Class A-1         Variable(2)        $238,211,000.00           January 25, 2033
 Class A-2         Variable(2)        $109,794,000.00           January 25, 2033
 Class M-1         Variable(2)        $ 17,000,000.00           January 25, 2033
 Class M-2         Variable(2)        $ 14,000,000.00           January 25, 2033
 Class M-3         Variable(2)        $ 12,000,000.00           January 25, 2033
 Class M-4         Variable(2)        $  3,000,000.00           January 25, 2033
 Class CE          Variable(3)        $  6,000,098.88           January 25, 2033
  Class P             N/A(4)          $        100.00           January 25, 2033
________________
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date immediately following the maturity date
     for the Mortgage Loans with the latest maturity date has been designated as
     the "latest possible maturity date" for each Class of Certificates.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  The Class CE Certificates will accrue interest at its variable Pass-Through
     Rate on the Notional Amount of the Class CE Certificates outstanding from
     time to time which shall equal the Uncertificated Balance of the REMIC I
     Regular Interests. The Class CE Certificates will not accrue interest on
     its Certificate Principal Balance.
(4)  The Class P Certificates will not accrue interest.

          As of the Cut-off Date, the Group I Mortgage Loans had an aggregate
Scheduled Principal Balance equal to $273,805,907.47 and the Group II Mortgage
Loans had an aggregate Scheduled Principal Balance equal to $126,199,291.41.

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

                                        2

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.01. Defined Terms.

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

          "Accrued Certificate Interest": With respect to any Class of
Certificates (other than the Class P Certificates and the Residual Certificates)
and each Distribution Date, interest accrued during the related Interest Accrual
Period at the Pass-Through Rate for such Certificate for such Distribution Date
on the Certificate Principal Balance, in the case of the Class A Certificates
and the Mezzanine Certificates, or on the Notional Amount, in the case of the
Class CE Certificates, of such Certificate immediately prior to such
Distribution Date. The Class P Certificates are not entitled to distributions in
respect of interest and, accordingly, will not accrue interest. All
distributions of interest on the Class A Certificates the Class M-1
Certificates, the Class M-2 Certificates and the Class M-3 Certificates will be
calculated on the basis of a 360-day year and the actual number of days in the
applicable Interest Accrual Period. All distributions of interest on the Class
M-4 Certificates and the Class CE Certificates will be based on a 360-day year
consisting of twelve 30- day months. Accrued Certificate Interest with respect
to each Distribution Date, as to any Class A Certificate, Mezzanine Certificate
or Class CE Certificate, shall be reduced by an amount equal to the portion
allocable to such Certificate pursuant to Section 1.02 hereof of the sum of (a)
the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date
to the extent not covered by payments pursuant to Section 4.03(e) or allocated
to the Class CE Certificates and (b) the aggregate amount of any Relief Act
Interest Shortfall, if any, for such Distribution Date. In addition, Accrued
Certificate Interest with respect to each Distribution Date, as to any Class CE
Certificate, shall be reduced by an amount equal to the portion allocable to
such Class CE Certificate of Realized Losses, if any, pursuant to Section 4.04
hereof.

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

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

                                        3

<PAGE>

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

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

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

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

          "Available Funds": With respect to any Distribution Date, an amount
equal to (1) the sum of (a) the aggregate of the amounts on deposit in the
Collection Account and Distribution Account as of the close of business on the
related Determination Date, (b) the aggregate of any amounts received in respect
of an REO Property withdrawn from any REO Account and deposited in the
Distribution Account for such Distribution Date pursuant to Section 3.13, (c)
the aggregate of any amounts deposited in the Distribution Account by the Master
Servicer in respect of Prepayment Interest Shortfalls for such Distribution Date
pursuant to Section 4.03(e), (d) the aggregate of any Advances made by the
Master Servicer for such Distribution Date pursuant to Section 4.03 and (e) the
aggregate of any advances made by the successor Master Servicer or the Trustee
for such Distribution Date pursuant to Section 7.02(b), reduced (to not less
than zero) by (2) the sum of (x) the portion of the amount described in clause
(1)(a) above that represents (i) Monthly Payments on the Mortgage Loans received
from a Mortgagor on or prior to the Determination Date but due during any Due
Period subsequent to the related Due Period, (ii) Principal Prepayments on the
Mortgage Loans received after the related Prepayment Period (together with any
interest payments received with such Principal Prepayments to the extent they
represent the payment of interest accrued on the Mortgage Loans during a period
subsequent to the related Prepayment Period), (iii) Liquidation Proceeds and
Insurance Proceeds received in respect of the Mortgage Loans after the related
Prepayment Period, (iv) amounts reimbursable or payable to the Depositor, the
Master Servicer, the Trustee, the Originator or any Sub-Servicer pursuant to
Section 3.05 or Section 3.06 or otherwise payable in respect of Extraordinary
Trust Fund Expenses, (v) Stayed Funds, (vi) the Trustee Fee payable from the
Distribution Account pursuant to Section 8.05, (vii) the PMI Insurer Fee payable
to the PMI Insurer from the Collection Account, (viii) amounts deposited in the
Collection Account or the Distribution Account in error and (ix) the amount of
any Prepayment Charges collected by the Master Servicer and the amount of any
Master Servicer Prepayment Charge Payment Amounts and (y) amounts reimbursable
to the Trustee for an advance made pursuant to Section 7.02(b) which advance the
Trustee has determined to be nonrecoverable from the Stayed Funds in respect of
which it was made.

                                        4

<PAGE>

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

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

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

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

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

          "Cap Contracts": The cap contracts between Deutsche Bank National
Trust Company, as Trustee and the counterparty thereunder, for the benefit of
the Holders of the Class A-2 Certificates, the Class M-1 Certificates and the
Class M-2 Certificates, forms of which are attached hereto as Exhibit H.

          "Certificate": Any one of the Depositor's Asset-Backed Pass-Through
Certificates, Series 2003-AR1, Class A-1, Class A-2, Class M-1, Class M-2, Class
M-3, Class M-4, Class CE, Class P and Class R, issued under this Agreement.

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

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

                                        5

<PAGE>

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

          "Certificate Margin": With respect to the Class A-1 Certificates and,
for purposes of the Marker Rate, REMIC I Regular Interest I-LTA1, 0.49% in the
case of each Distribution Date through and including the first Distribution Date
on which the aggregate Stated Principal Balance of the Mortgage Loans (and
properties acquired in respect thereof) remaining in the Trust Fund is reduced
to an amount less than 10% of the aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date, or 0.98%, in the case of any Distribution
Date thereafter.

          With respect to the Class A-2 Certificates and, for purposes of the
Marker Rate, REMIC I Regular Interest I-LTA2, 0.49% in the case of each
Distribution Date through and including the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to an amount
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date, or 0.98%, in the case of any Distribution Date thereafter.

          With respect to the Class M-1 Certificates and, for purposes of the
Marker Rate, REMIC I Regular Interest I-LTM1, 1.15% in the case of each
Distribution Date through and including the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to an amount
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date, or 1.725%, in the case of any Distribution Date thereafter.

          With respect to the Class M-2 Certificates and, for purposes of the
Marker Rate, REMIC I Regular Interest I-LTM2, 2.10% in the case of each
Distribution Date through and including the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to an amount
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date, or 3.15%, in the case of any Distribution Date thereafter.

          With respect to the Class M-3 Certificates and, for purposes of the
Marker Rate, REMIC I Regular Interest I-LTM3, 3.00% in the case of each
Distribution Date through and including the first Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans (and properties
acquired in respect thereof) remaining in the Trust Fund is reduced to an amount
less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date, or 4.5%, in the case of any Distribution Date thereafter.

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

                                        6

<PAGE>

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

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

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

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

          "Class A Principal Distribution Amount": With respect to any
Distribution Date, is an amount equal to the sum of (i) the Class A-1 Principal
Distribution Amount and (ii) the Class A-2 Principal Distribution Amount.

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

          "Class A-1 Principal Allocation Percentage": With respect to the Class
A-1 Certificates and any Distribution Date, the percentage equivalent of a
fraction, the numerator of which is (x) the Group I Principal Remittance Amount
for such Distribution Date and the denominator of which is (y) the Principal
Remittance Amount for such Distribution Date.

          "Class A-1 Principal Distribution Amount" With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A-1 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 74.00% and (ii) the aggregate Stated Principal
Balance of the Group I Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Group I Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $1,369,029.

                                        7

<PAGE>

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

          "Class A-2 Principal Allocation Percentage": With respect to the Class
A-2 Certificates and any Distribution Date, the percentage equivalent of a
fraction, the numerator of which is (x) the Group II Principal Remittance Amount
for such Distribution Date and the denominator of which is (y) the Principal
Remittance Amount for such Distribution Date.

          "Class A-2 Principal Distribution Amount" With respect to any
Distribution Date, the excess of (x) the Certificate Principal Balance of the
Class A-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 74.00% and (ii) the aggregate Stated Principal
Balance of the Group II Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) and (B)
the aggregate Stated Principal Balance of the Group II Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) minus $630,996.

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

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

          "Class M-1 Certificate": Any one of the Class M-1 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-3 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

          "Class M-1 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
and (ii) the Certificate Principal Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 82.50% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during

                                        8

<PAGE>

the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$2,000,026.

          "Class M-2 Certificate": Any one of the Class M-2 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-4 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

          "Class M-2 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Certificate Principal Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 89.50% and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) and (B) the aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period) minus
$2,000,026.

          "Class M-3 Certificate": Any one of the Class M-3 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-5 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

          "Class M-3 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date) and (iv) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the lesser of (A) the product of (i) 95.50% and
(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period) and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) minus $2,000,026.

                                        9

<PAGE>

          "Class M-4 Certificate": Any one of the Class M-4 Certificates
executed by the Trustee, and authenticated and delivered by the Certificate
Registrar, substantially in the form annexed hereto as Exhibit A-6 and
evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

          "Class M-4 Principal Distribution Amount": With respect to any
Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into account the
payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after
taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (iii) the Certificate Principal Balance of the Class
M-2 Certificates (after taking into account the payment of the Class M-2
Principal Distribution Amount on such Distribution Date), (iv) the Certificate
Principal Balance of the Class M-3 Certificates (after taking into account the
payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), and (v) the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 97.00% and (ii) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period) and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related
Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $2,000,026.

          "Class P Certificate": Any one of the Class P Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-8, representing the right
to distributions as set forth herein and therein and evidencing a regular
interest in REMIC II.

          "Class R Certificate": Any one of the Class R Certificates executed by
the Trustee, and authenticated and delivered by the Certificate Registrar,
substantially in the form annexed hereto as Exhibit A-9 and evidencing the
ownership of the Class R-I Interest and the Class R-II Interest.

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

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

          "Closing Date": January 17, 2003.

          "Code": The Internal Revenue Code of 1986.

          "Collection Account": The account or accounts created and maintained
by the Master Servicer pursuant to Section 3.04(a), which shall be entitled
"Ameriquest Mortgage Company, as Master Servicer for Deutsche Bank National
Trust Company, as Trustee, in trust for the registered holders of Ameriquest
Mortgage Securities Inc., Asset-Backed Pass-Through Certificates, Series
2003-AR1." The Collection Account must be an Eligible Account.

                                       10

<PAGE>

          "Commission": The Securities and Exchange Commission.

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

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

          "Corresponding Certificate": With respect to (A)(i) REMIC I Regular
Interest I- LTA1, (ii) REMIC I Regular Interest I-LTA2, (iii) REMIC I Regular
Interest I-LTM1, (iv) REMIC I Regular Interest I-LTM2, (v) REMIC I Regular
Interest I-LTM3, (vi) REMIC I Regular Interest I- LTM4 and (vii) REMIC I Regular
Interest I-LTP, (B)(i) the Class A-1 Certificates, (ii) the Class A-2
Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2 Certificates,
(v) the Class M-3 Certificates, (vi) the Class M-4 Certificates and (vii) Class
P Certificates, respectively.

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

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

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

          "Cut-off Date": With respect to any Mortgage Loan, the close of
business on the later of (i) the date of origination of such Mortgage Loan or
(ii) January 1, 2003. With respect to all Qualified Substitute Mortgage Loans,
their respective dates of substitution. References herein to the "Cut-off Date,"
when used with respect to more than one Mortgage Loan, shall be to the
respective Cut-off Dates for such Mortgage Loans.

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

                                       11

<PAGE>

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

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

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

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

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

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

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

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

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

                                       12

<PAGE>

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

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

          "Distribution Account": The trust account or accounts created and
maintained by the Trustee pursuant to Section 3.04(e) which shall be entitled
"Deutsche Bank National Trust Company, as Trustee, in trust for the registered
holders of Ameriquest Mortgage Securities Inc., Asset-Backed Pass-Through
Certificates, Series 2003-AR1." The Distribution Account must be an Eligible
Account.

          "Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the next succeeding Business Day, commencing in February
2003.

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

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

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

                                       13

<PAGE>

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

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

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

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

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

          "Excess Group Net WAC Pass-Through Rate Amount": For any Distribution
Date and (x) the Class A-1 Certificates, the positive excess, if any, of (i) the
amount of interest accrued on the Class A-1 Certificates for such Distribution
Date calculated at the Net WAC Pass-Through Rate for the Class A-1 Certificates
over (ii) the amount of interest accrued on the Class A-1 Certificates at the
Pool Net WAC Pass-Through Rate and (y) the Class A-2 Certificates, the positive
excess, if any, of (i) the amount of interest accrued on the Class A-2
Certificates for such Distribution Date calculated at the Net WAC Pass-Through
Rate for the Class A-2 Certificates over (ii) the amount of interest accrued on
the Class A-2 Certificates at the Pool Net WAC Pass-Through Rate.

          "Excess Net WAC Rate Reserve Account": As defined in Section 4.12.

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

          "Excess Pool Net WAC Pass-Through Rate Amount": For any Distribution
Date and (x) the Class A-1 Certificates, the positive excess, if any, of (i) the
amount of interest accrued on the Class A-1 Certificates for such Distribution
Date calculated at the Pool Net WAC Pass-Through Rate over (ii) the amount of
interest accrued on the Class A-1 Certificates at the Net WAC Pass-Through Rate
for the Class A-1 Certificates and (y) the Class A-2 Certificates, the positive
excess, if any, of (i) the amount of interest accrued on the Class A-2
Certificates for such Distribution Date calculated at the Pool Net WAC
Pass-Through Rate over (ii) the amount of interest accrued on such Class A-2
Certificates at the Net WAC Pass-Through Rate for the Class A-2 Certificates.

          "Expense Adjusted Net Mortgage Rate": With respect to any Mortgage
Loan (or the related REO Property), as of any date of determination, a per annum
rate of interest equal to the

                                       14

<PAGE>

applicable Mortgage Rate thereon as of the first day of the month preceding the
month in which the Distribution Date occurs minus the sum of (i) the Trustee Fee
Rate, (ii) the Servicing Fee Rate and (iii) the PMI Insurer Fee Rate, if
applicable.

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

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

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

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

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

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

          "Formula Rate": For any Distribution Date and the Class A-1
Certificates, the Class M-1 Certificates, the Class M-2 Certificates and the
Class M-3 Certificates, the lesser of (i) LIBOR plus the related Certificate
Margin and (ii) the Maximum Cap Rate. For any Distribution Date and the Class
A-2 Certificates, the lesser of (i) LIBOR plus the related Certificate Margin
and (ii) beginning on the Distribution Date in January 2006, the Maximum Cap
Rate.

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

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

                                       15

<PAGE>

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

          "Group I Mortgage Loan": A Mortgage Loan assigned to Loan Group I with
a Principal Balance that conforms to Fannie Mae and Freddie Mac loan limits.

          "Group I Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of all scheduled monthly
payments on the Group I Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group I Mortgage Loan (or, in the case of a substitution, certain amounts
representing a principal adjustment) during the related Prepayment Period; (iii)
the principal portion of all other unscheduled collections, including Insurance
Proceeds, Liquidation Proceeds and all full and partial Principal Prepayments,
received during the related Prepayment Period, to the extent applied as
recoveries of principal on the Group I Mortgage Loans; and (iv) the Class A-1
Allocation Percentage of the amount of any Overcollateralization Increase Amount
for such Distribution Date MINUS (v) the Class A-1 Allocation Percentage of the
amount of any Overcollateralization Reduction Amount for such Distribution Date.
In no event will the Group I Principal Distribution Amount with respect to any
Distribution Date be (x) less than zero or (y) greater than the then outstanding
aggregate Certificate Principal Balance of the Class A Certificates and the
Mezzanine Certificates.

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

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

          "Group II Mortgage Loan": A Mortgage Loan assigned to Loan Group II
with a Principal Balance that may or may not conform to Fannie Mae or Freddie
Mac loan limits.

          "Group II Principal Distribution Amount": With respect to any
Distribution Date, the sum of (i) the principal portion of all scheduled monthly
payments on the Group II Mortgage Loans due during the related Due Period,
whether or not received on or prior to the related Determination Date; (ii) the
principal portion of all proceeds received in respect of the repurchase of a
Group II Mortgage Loan (or, in the case of a substitution, certain amounts
representing a principal adjustment) during the related Prepayment Period; (iii)
the principal portion of all other unscheduled collections, including Insurance
Proceeds, Liquidation Proceeds and all full and partial Principal Prepayments,
received during the related Prepayment Period, to the extent applied as
recoveries of principal on the Group II Mortgage Loans; and (iv) the Class A-2
Allocation Percentage of the amount of any Overcollateralization Increase Amount
for such Distribution Date MINUS (v) the Class A-2 Allocation Percentage of the
amount of any Overcollateralization Reduction Amount for such Distribution Date.
In no event will the Group II Principal Distribution Amount with respect to any
Distribution Date

                                       16

<PAGE>

be (x) less than zero or (y) greater than the then outstanding aggregate
Certificate Principal Balance of the Class A Certificates and the Mezzanine
Certificates.

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

          "Indenture": An indenture relating to the issuance of notes which may
or may not be guaranteed by the NIMS Insurer.

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

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

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

          "Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy, including the PMI Policy, covering a Mortgage Loan, to
the extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing mortgage loans

                                       17

<PAGE>

held for its own account, subject to the terms and conditions of the related
Mortgage Note and Mortgage.

          "Interest Accrual Period": With respect to any Distribution Date and
the Class A Certificates, the Class M-1 Certificates, the Class M-2 Certificates
and the Class M-3 Certificates, the period commencing on the Distribution Date
in the month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, commencing on the
Closing Date) and ending on the day preceding such Distribution Date. With
respect to any Distribution Date and the Class M-4 Certificates, the Class CE
Certificates and the REMIC I Regular Interests, the one-month period ending on
the last day of the calendar month preceding the month in which such
Distribution Date occurs.

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

          "Interest Determination Date": With respect to the Class A
Certificates, the Mezzanine Certificates (other than the Class M-4
Certificates), and solely for purposes of calculating the Marker Rate, REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest
I-LTM3 and any Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual Period.

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

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

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

                                       18

<PAGE>

          "Liquidation Proceeds": The amount (other than Insurance Proceeds or
amounts received in respect of the rental of any REO Property prior to REO
Disposition) received by the Master Servicer in connection with (i) the taking
of all or a part of a Mortgaged Property by exercise of the power of eminent
domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise, or (iii) the
repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant
to or as contemplated by Section 2.03, Section 3.13, Section 3.16(a) or Section
9.01.

          "Loan Group": Either Loan Group I or Loan Group II, as the context
requires.

          "Loan Group I": The group of Mortgage Loans identified in the Mortgage
Loan Schedule as having been assigned to Loan Group I.

          "Loan Group II": The group of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.

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

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

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

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

          "Marker Rate": With respect to the Class CE Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the REMIC I Remittance Rate for each of the REMIC I Regular Interests, with
the rate on each REMIC I Regular Interest (other than REMIC I Regular Interest
I-LTZZ) subject to the related Formula Rate (or in the case of REMIC I Regular
Interest I-LTM4, the related fixed rate) for the purpose of this calculation for
such Distribution Date and with the rate on REMIC I Regular Interest I-LTZZ
subject to a cap of zero for the purpose of this calculation: provided, however,
that solely for this purpose, calculations of the REMIC I Remittance Rate and
the related caps with respect to REMIC I Regular Interest I-LTA1, REMIC I
Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular
Interest I-LTM2 and REMIC I Regular Interest I-LTM3 shall be multiplied by a
fraction, the numerator of which is the actual number of days in the Interest
Accrual Period and the denominator of which is 30.

                                       19

<PAGE>

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

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

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

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

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

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

          "Maximum Cap Rate": For any Distribution Date with respect to the
Class A Certificates and the Mezzanine Certificates (other than the Class M-4
Certificates), a per annum rate equal to the product of (x) the weighted average
of the Expense Adjusted Maximum Mortgage Rates of the Mortgage Loans, weighted
based on their Scheduled Principal Balances as of the first day of the calendar
month preceding the month in which the Distribution Date occurs (after giving
effect to unscheduled collections of principal received during the related
Prepayment Period) and (y) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period.

          "Maximum I-LTZZ Uncertificated Interest Deferral Amount": With respect
to any Distribution Date, the excess of (i) accrued interest at the REMIC I
Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such
Distribution Date on a balance equal to the Uncertificated Balance of REMIC I
Regular Interest I-LTZZ minus the REMIC I Overcollateralization Amount, in each
case for such Distribution Date, over (ii) Uncertificated Interest on REMIC I
Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular
Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular Interest
I-LTM3 and REMIC I Regular Interest I-LTM4 for such Distribution Date, with the
rate on each such REMIC I Regular Interest subject to a cap equal to the related
Formula Rate (or in the case of REMIC I Regular Interest I-LTM4, the related
fixed rate), provided, however, that solely for this purpose, calculations of
the REMIC I Remittance Rate and the related caps with respect to REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTM3
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Interest Accrual Period and the denominator of which is 30.

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

                                       20

<PAGE>

          "Mezzanine Certificate": Any Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates or Class M-4 Certificates.

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

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

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

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

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

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

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

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

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

          (2) the Mortgagor's name;

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

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

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

                                       21

<PAGE>

          (6) the original months to maturity;

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

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

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

          (10) the stated maturity date;

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

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

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

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

          (15) with respect to each adjustable-rate Mortgage Loan, the Gross
     Margin;

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

          (17) with respect to each adjustable-rate Mortgage Loan, the Maximum
     Mortgage Rate;

          (18) with respect to each adjustable-rate Mortgage Loan, the Minimum
     Mortgage Rate;

          (19) the Mortgage Rate at origination;

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

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

          (22) with respect to each adjustable-rate Mortgage Loan, the first
     Adjustment Date immediately following the Cut-off Date;

          (23) the risk grade;

          (24) the Value of the Mortgaged Property;

                                       22

<PAGE>

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

          (26) the FICO score of the primary Mortgagor; and

          (27) whether the Mortgage Loan is covered under the PMI Policy.

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

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

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

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

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

                                       23

<PAGE>

          "Mortgagor": The obligor on a Mortgage Note.

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

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

          "Net WAC Pass-Through Rate": With respect to the Offered Certificates
(other than the Class M-4 Certificates) and any Distribution Date, a per annum
rate equal to the product of (x)(i) in the case of the Class A-1 Certificates,
the weighted average of the Expense Adjusted Net Mortgage Rates of the Group I
Mortgage Loans, (ii) in the case of the Class A-2 Certificates the weighted
average of the Expense Adjusted Net Mortgage Rates of the Group II Mortgage
Loans and (iii) in the case of each class of Mezzanine Certificates, the
weighted average of the Expense Adjusted Net Mortgage Rates of all of the
Mortgage Loans, and (y) in the case of the Offered Certificates (other than the
Class M-4 Certificates) a fraction, the numerator of which is 30 and the
denominator of which is the actual number of days elapsed in the related
Interest Accrual Period. For federal income tax purposes, the economic
equivalent of such rate shall be expressed as the REMIC I Remittance Rate for
the REMIC I Regular Interest for which such Class of Certificates is the
Corresponding Certificate. With respect to the Class M-4 Certificates and any
Distribution Date, a per annum rate equal to the weighted average of the Expense
Adjusted Net Mortgage Rates of all of the Mortgage Loans.

          "Net WAC Rate Carryover Amount": With respect to the Class A
Certificates and the Mezzanine Certificates and any Distribution Date, the sum
of the excess of (i) the amount of interest such Certificates would have accrued
for such Distribution Date had such Pass-Through Rate been calculated at the
Formula Rate (in the case of the Class A Certificates, the Class M-1
Certificates, the Class M-2 Certificates and the Class M-3 Certificates) or the
related fixed rate (in the case of the Class M-4 Certificates), over (ii) the
amount of interest accrued on such Certificates at the related Net WAC
Pass-Through Rate for such Distribution Date and (B) the related Net WAC Rate
Carryover Amount for the previous Distribution Date not previously paid,
together with interest thereon at a rate equal to the Formula Rate (in the case
of the Class A Certificates, the Class M-1 Certificates, the Class M-2
Certificates and the Class M-3 Certificates) or the related fixed rate (in the
case of the Class M-4 Certificates) applicable for such class in each case for
the Interest Accrual Period for the current Distribution Date.

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

                                       24

<PAGE>

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

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

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

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

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

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

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

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

          "One-Month LIBOR": With respect to the Class A Certificates, the
Mezzanine Certificates (other than the Class M-4 Certificates), REMIC I Regular
Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest
I-LTM1, REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTM3 and
any Interest Accrual Period therefor, the rate determined by the Trustee on the
related Interest Determination Date on the basis of the offered rate for
one-month U.S. dollar deposits, as such rate appears on Telerate Page 3750 as of
11:00 a.m. (London time) on such Interest Determination Date; provided that if
such rate does not appear on Telerate Page 3750, the rate for such date will be
determined on the basis of the offered rates of the Reference Banks for
one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such Interest
Determination Date.

                                       25

<PAGE>

In such event, the Trustee will request the principal London office of each of
the Reference Banks to provide a quotation of its rate. If on such Interest
Determination Date, two or more Reference Banks provide such offered quotations,
One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic
mean of such offered quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If on such Interest Determination Date, fewer than two
Reference Banks provide such offered quotations, One-Month LIBOR for the related
Interest Accrual Period shall be the higher of (i) LIBOR as determined on the
previous Interest Determination Date and (ii) the Reserve Interest Rate.
Notwithstanding the foregoing, if, under the priorities described above, LIBOR
for an Interest Determination Date would be based on LIBOR for the previous
Interest Determination Date for the third consecutive Interest Determination
Date, the Trustee shall select, after consultation with the NIMS Insurer, an
alternative comparable index (over which the Trustee has no control), used for
determining one-month Eurodollar lending rates that is calculated and published
(or otherwise made available) by an independent party.

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

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

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

          "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the excess, if any, of (a) the Overcollateralization Target
Amount applicable to such Distribution Date over (b) the Overcollateralized
Amount applicable to such Distribution Date (calculated for this purpose only,
after taking into account the distributions to be made of the Principal
Remittance Amount on such Distribution Date).

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

                                       26

<PAGE>

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

          "Overcollateralization Target Amount": With respect to any
Distribution Date (i) prior to the Stepdown Date, $6,000,078, (ii) on or after
the Stepdown Date provided a Trigger Event is not in effect, the greater of (x)
3.00% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced
and unscheduled collections of principal received during the related Prepayment
Period) and (y) $2,000,026, or (iii) on or after the Stepdown Date and if a
Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.

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

          "Pass-Through Rate": With respect to the Class A Certificates, the
Class M-1 Certificates, the Class M-2 Certificates and the Class M-3
Certificates and any Distribution Date, the lesser of (x) the related Formula
Rate for such Distribution Date and (y) the Pool Net WAC Pass- Through Rate for
such Distribution Date.

          With respect to the Class M-4 Certificates and any Distribution Date,
the lesser of (x) 6.00% per annum in the case of each Distribution Date through
and including the Distribution Date on which the aggregate Principal Balance of
the Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust Fund is reduced to less than 10% of the aggregate Stated Principal Balance
of the Mortgage Loans as of the Cut-off Date, or 6.50% per annum, in the case of
any Distribution Date thereafter and (y) the Net WAC Pass-Through Rate for such
class for such Distribution Date.

          With respect to the Class CE Certificates and any Distribution Date, a
rate per annum equal to the percentage equivalent of a fraction, the numerator
of which is the sum of the amounts calculated pursuant to clauses (A) through
(G) below, and the denominator of which is the Uncertificated Balance of the
REMIC I Regular Interests. For purposes of calculating the Pass- Through Rate
for the Class CE Certificates, the numerator is equal to the sum of the
following components:

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

                                       29

<PAGE>

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

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

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

          "PMI Insurer": Mortgage Guaranty Insurance Corporation, a Wisconsin
stock insurance corporation, or its successors in interest.

          "PMI Insurer Fee": The amount payable to the PMI Insurer on each
Distribution Date, which amount shall equal the PMI Insurer Fee Rate accrued on
the aggregate Stated Principal Balance of the PMI Mortgage Loans and any related
REO Properties as of the first day of the related Due Period (after giving
effect to scheduled payments of principal due during the Due Period relating to
the previous Distribution Date, to the extent received or advanced) plus any
applicable premium taxes on PMI Mortgage Loans located in West Virginia and
Kentucky.

          "PMI Insurer Fee Rate": 1.54% per annum.

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

          "PMI Policy": The Mortgage Guaranty Master Policy (MGIC Policy
#04-690-4-7215) with respect to the PMI Mortgage Loans, including all
endorsements thereto, all with an effective date of January 1, 2003, issued by
the PMI Insurer and the Terms Letter, dated January 14, 2003, among the PMI
Insurer, the Master Servicer and the Trustee.

          "Pool Net WAC Pass-Through Rate": A per annum rate (but not less than
zero) equal to the weighted average of the Expense Adjusted Net Mortgage Rate of
Group I Mortgage Loans and the Expense Adjusted Net Mortgage Rate of Group II
Mortgage Loans.

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

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

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<PAGE>

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

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

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

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

          (iv) the term of the related Prepayment Charge;

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

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

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

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

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

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

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<PAGE>

January 1, 2003) and ending on the Determination Date of the calendar month in
which such Distribution Date occurs.

          "Principal Balance": With respect to any Mortgage Loan and any day,
the Stated Principal Balance of such Mortgage Loan.

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

          "Principal Remittance Amount": With respect to any Distribution Date,
the sum of the (i) the Group I Principal Remittance Amount and (ii) the Group II
Principal Remittance Amount.

          "Prospectus Supplement": The Prospectus Supplement, dated January 15,
2003, relating to the public offering of the Offered Certificates.

          "PTCE": A Prohibited Transaction Class Exemption.

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

          "Qualified Substitute Mortgage Loan": A mortgage loan substituted for
a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on
the date of such substitution,

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<PAGE>

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

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

          "Realized Loss": With respect to each Mortgage Loan as to which a
Final Recovery Determination has been made, an amount (not less than zero) equal
to (i) the unpaid Principal Balance of such Mortgage Loan as of the commencement
of the calendar month in which the Final Recovery Determination was made, plus
(ii) accrued interest from the Due Date as to which interest was last paid by
the Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) any amounts

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<PAGE>

previously withdrawn from the Collection Account in respect of such Mortgage
Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus (iv) the
proceeds, if any, received in respect of such Mortgage Loan during the calendar
month in which such Final Recovery Determination was made, net of amounts that
are payable therefrom to the Master Servicer with respect to such Mortgage Loan
pursuant to Section 3.05(a)(ii).

          With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid Principal Balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, plus (iv)
any amounts previously withdrawn from the Collection Account in respect of the
related Mortgage Loan pursuant to Section 3.05(a)(v) and Section 3.12(c), minus
(v) the aggregate of all Advances made by the Master Servicer in respect of such
REO Property or the related Mortgage Loan for which the Master Servicer has been
or, in connection with such Final Recovery Determination, will be reimbursed
pursuant to Section 3.13 out of rental income, Insurance Proceeds and
Liquidation Proceeds received in respect of such REO Property, minus (vi) the
total of all net rental income, Insurance Proceeds and Liquidation Proceeds
received in respect of such REO Property that has been, or in connection with
such Final Recovery Determination, will be transferred to the Distribution
Account pursuant to Section 3.13.

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

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

          "Record Date": With respect to each Distribution Date and any
Book-Entry Certificate (other than the Class M-4 Certificates), the Business Day
immediately preceding such Distribution Date. With respect to each Distribution
Date and any other Class of Certificates, including any Definitive Certificates,
the last Business Day of the month immediately preceding the month in which such
Distribution Date occurs.

          "Reference Banks": Deutsche Bank, Barclay's Bank PLC, The Tokyo
Mitsubishi Bank and National Westminster Bank PLC and their successors in
interest; provided, however, that

                                       34

<PAGE>

if any of the foregoing banks are not suitable to serve as a Reference Bank,
then any leading banks selected by the Trustee (after consultation with the NIMS
Insurer) which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) not controlling, under the control of or under common control with
the Depositor or any Affiliate thereof and (iii) which have been designated as
such by the Trustee.

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

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

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

          "Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended or any applicable state law providing similar relief.

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

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

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

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<PAGE>

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

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

          "REMIC I Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Balances of the REMIC I
Regular Interests minus (ii) the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3 and REMIC I Regular Interest I-LTM4, in each case as of such
date of determination.

          "REMIC I Principal Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans and REO Properties then outstanding and
(ii) 1 minus a fraction, the numerator of which is two times the aggregate of
the Uncertificated Balances of REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTM4 and
the denominator of which is the aggregate of the Uncertificated Balances of
REMIC I Regular Interest I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I
Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC I Regular
Interest I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest
I-LTZZ.

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

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

          "REMIC I Regular Interest I-LTA1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA1
shall accrue interest at the related REMIC I Remittance Rate in

                                       36

<PAGE>

effect from time to time, and shall be entitled to distributions of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Balance as set forth in the Preliminary Statement hereto.

          "REMIC I Regular Interest I-LTA2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

          "REMIC I Regular Interest I-LTM1": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM1
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

          "REMIC I Regular Interest I-LTM2": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM2
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

          "REMIC I Regular Interest I-LTM3": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM3
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

          "REMIC I Regular Interest I-LTM4": One of the separate
non-certificated beneficial ownership interests in REMIC I issued hereunder and
designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTM4
shall accrue interest at the related REMIC I Remittance Rate in effect from time
to time, and shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Balance as set forth in the Preliminary Statement hereto.

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

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

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

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

          "Scheduled Principal Balance": With respect to any Mortgage Loan: (a)
as of the Cut-off Date, the outstanding Principal Balance of such Mortgage Loan
as of such date, net of the

                                       39

<PAGE>

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

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

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

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

                                       40

<PAGE>

calendar month. A portion of such Servicing Fee may be retained by any
Sub-Servicer as its servicing compensation.

          "Servicing Fee Rate": 0.50% per annum.

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

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

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

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

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

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

                                       41

<PAGE>

Master Servicer and distributed pursuant to Section 4.01 on or before such date
of determination, and (ii) the aggregate amount of REO Principal Amortization in
respect of such REO Property for all previously ended calendar months, to the
extent distributed pursuant to Section 4.01 on or before such date of
determination; and (b) as of any date of determination coinciding with or
subsequent to the Distribution Date on which the proceeds, if any, of a
Liquidation Event with respect to such REO Property would be distributed, zero.

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

          "Stepdown Date": The earlier to occur of (i) the first Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (ii) the later to occur of (a) the
Distribution Date occurring in February 2006 and (b) the first Distribution Date
on which the Credit Enhancement Percentage (calculated for this purpose only
after taking into account distributions of principal on the Mortgage Loans but
prior to any distribution of the Principal Distribution Amount to the
Certificates then entitled to distributions of principal on such Distribution
Date) is equal to or greater than 26.00%.

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

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

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

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

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

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

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<PAGE>

          "Termination Price": As defined in Section 9.01.

          "Terminator": As defined in Section 9.01.

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

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

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

          "Trigger Event": A Trigger Event has occurred with respect to a
Distribution Date if:

          (a) the Delinquency Percentage for the Mortgage Loans exceeds 16.50%;
or

          (b) the percentage equivalent of a fraction, the numerator of which is
the aggregate amount of Realized Losses incurred from the Cut-off Date to the
last day of the related Due Period and the denominator of which is the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds
the applicable percentages set forth below with respect to such Distribution
Date:

            DISTRIBUTION DATE OCCURRING IN           PERCENTAGE
         ------------------------------------       ------------
          February 2006 through January 2007            2.75%
          February 2007 through January 2008            4.00%
          February 2008 through January 2009            5.25%
          February 2009 through January 2010            5.75%
          February 2010 and thereafter                  6.00%

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

          "Trust REMIC": Each of REMIC I and REMIC II.

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

          "Trustee Fee": The amount payable to the Trustee on each Distribution
Date pursuant to Section 8.05 as compensation for all services rendered by it
and in the exercise and performance of any of the powers and duties of the
Trustee hereunder, which amount shall equal the Trustee Fee

                                       43

<PAGE>

Rate accrued for one month multiplied by the sum of the aggregate Scheduled
Principal Balance of the Mortgage Loans and any REO Properties as of the second
preceding Due Date (or, in the case of the initial Distribution Date, as of the
Cut-off Date), calculated on the basis of a 360-day year consisting of twelve
30-day months.

          "Trustee Fee Rate": 0.0065% per annum.

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

          "Uncertificated Interest": With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the REMIC I
Remittance Rate applicable to such REMIC I Regular Interest for such
Distribution Date, accrued on the Uncertificated Balance or Uncertificated
Notional Amount thereof immediately prior to such Distribution Date.
Uncertificated Interest in respect of any REMIC I Regular Interest shall accrue
on the basis of a 360-day year consisting of twelve 30-day months.
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest, shall be reduced by an amount equal to the sum of (a) the
aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to
the extent not covered by payments pursuant to Section 4.03(e) and (b) the
aggregate amount of any Relief Act Interest Shortfall, if any allocated, in each
case, to such REMIC I Regular Interest pursuant to Section 1.02. In addition,
Uncertificated Interest with respect to each Distribution Date, as to any REMIC
I Regular Interest shall be reduced by Realized Losses, if any, allocated to
such REMIC I Regular Interest pursuant to Section 1.02 and Section 4.04.

          "Underwriters' Exemption": An individual exemption issued by the
United States Department of Labor to UBS Warburg LLC in Prohibited Transaction
Exemption ("PTE") 91-22 at 56 Fed. Reg. 15933 and was amended by PTE 2000-58 at
65 Fed. Reg. 67765, and further amended on August 22, 2002, which generally
provides an exemption for offerings in which UBS Warburg LLC or any person
directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with UBS Warburg LLC is an underwriter,
placement agent or a manager or co-manager of the underwriting syndicate or
selling group where the entity and the offered securities meet specified
conditions. The Underwriters' Exemption, as amended, provides a partial
exemption from section 406 of ERISA and section 4975 of the Code for
transactions involving securities representing an interest in certain types of
entities and entitling the holder to payments with respect to the entity's
assets.

                                       44

<PAGE>

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

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

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

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

          SECTION 1.02. Allocation of Certain Interest Shortfalls.

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<PAGE>

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

          For purposes of calculating the amount of Uncertificated Interest for
the REMIC I Regular Interests for any Distribution Date, the aggregate amount of
any Prepayment Interest Shortfalls (to the extent not covered by payments by the
Master Servicer pursuant to Section 4.03(e)) and Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Interest payable to REMIC I Regular Interest
I-LTAA and REMIC I Regular Interest I-LTZZ up to an aggregate amount equal to
the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC I Regular Interest I- LTA1, REMIC I Regular Interest
I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest I-LTM2, REMIC
I Regular Interest I-LTM3, REMIC I Regular Interest I-LTM4 and REMIC I Regular
Interest I-LTZZ PRO RATA based on, and to the extent of, one month's interest at
the then applicable respective Pass-Through Rate on the respective
Uncertificated Balance of each such REMIC I Regular Interest.

          SECTION 1.03 Rights of the NIMS Insurer.

          Each of the rights of the NIMS Insurer set forth in this Agreement
shall exist so long as (i) the NIMS Insurer has undertaken to guarantee certain
payments of notes issued pursuant to an Indenture and (ii) any series of notes
issued pursuant to one or more Indentures remain outstanding or the NIMS Insurer
is owed amounts in respect of its guarantee of payment on such notes; provided,
however, the NIMS Insurer shall not have any rights hereunder (except pursuant
to Section 11.01 in the case of clause (ii) below) during the period of time, if
any, that (i) the NIMS Insurer has not undertaken to guarantee certain payments
of notes issued pursuant to the Indenture or (ii) any default has occurred and
is continuing under the insurance policy issued by the NIMS Insurer with respect
to such notes.

                                       46

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

          SECTION 2.01. Conveyance of Mortgage Loans.

          The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey to the Trustee
without recourse for the benefit of the Certificateholders all the right, title
and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to the Mortgage Loans identified on the
Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan
Purchase Agreement, all other assets included or to be included in REMIC I and,
for the benefit of the Holders of the Class A-2 Certificates, the Class M-1
Certificates and the Class M-2 Certificates, the Cap Contracts. Such assignment
includes all interest and principal received by the Depositor or the Master
Servicer on or with respect to the Mortgage Loans (other than payments of
principal and interest due on such Mortgage Loans on or before the Cut-off
Date). The Depositor herewith delivers to the Trustee an executed copy of the
Mortgage Loan Purchase Agreement, the PMI Policy and the Trustee, on behalf of
the Certificateholders, acknowledges receipt of the same.

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

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

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

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

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

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<PAGE>

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

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

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

          The Master Servicer (in its capacity as Originator) shall promptly
(and in no event later than thirty (30) Business Days, subject to extension upon
a mutual agreement between the Master Servicer and the Trustee, following the
later of (i) the Closing Date, (ii) the date on which the Originator receives
the Assignment from the Custodian and (iii) the date of receipt by the Master
Servicer of the recording information for a Mortgage) submit or cause to be
submitted for recording, at no expense to the Trust Fund or the Trustee, in the
appropriate public office for real property records, each Assignment referred to
in Sections 2.01(iii) and (iv) above and shall execute each original Assignment
referred to in section 2.01(iii) above in the following form: "Deutsche Bank
National Trust Company, as Trustee under the applicable agreement." In the event
that any such Assignment is lost or returned unrecorded because of a defect
therein, the Master Servicer (in its capacity as Originator) shall promptly
prepare or cause to be prepared a substitute Assignment or cure or cause to be
cured such defect, as the case may be, and thereafter cause each such Assignment
to be duly recorded. Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments of Mortgage shall not be required to be submitted for recording
(except with respect to any Mortgage Loan located in Maryland) unless such
failure to record would result in a withdrawal or a downgrading by any Rating
Agency of the rating on any Class of Certificates; provided further, however,
each Assignment of

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<PAGE>

Mortgage shall be submitted for recording by the Master Servicer (in its
capacity as Originator) in the manner described above, at no expense to the
Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable
direction by Holders of Certificates entitled to at least 25% of the Voting
Rights, (ii) failure of the Master Servicer Termination Test, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the
Originator, (iv) the occurrence of a servicing transfer as described in Section
7.02 hereof and (v) if the Originator is not the Master Servicer and with
respect to any one assignment or Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.
Notwithstanding the foregoing, if the Master Servicer is unable to pay the cost
of recording the Assignments of Mortgage, such expense will be paid by the
Trustee and shall be reimbursable to the Trustee as an Extraordinary Trust Fund
Expense.

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

          SECTION 2.02. Acceptance of REMIC I by the Trustee.

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

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

          The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause a Custodian on its behalf to review) each Mortgage Note within
45 days of the Closing Date and to certify in substantially the form attached
hereto as Exhibit C-1 (or cause the Custodian to certify in the form of the
Initial Certification attached to the Custodial Agreement) that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in the exception
report annexed thereto as not being covered by such certification), (i) all
documents constituting part of such Mortgage File (other than such

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<PAGE>

documents described in Section 2.01(v)) required to be delivered to it pursuant
to this Agreement are in its possession, (ii) such documents have been reviewed
by it or such Custodian and are not mutilated, torn or defaced unless initialed
by the related borrower and relate to such Mortgage Loan, (iii) based on its or
the Custodian's examination and only as to the foregoing, the information set
forth in the Mortgage Loan Schedule that corresponds to items (1) through (3),
(6), (9), (10), (13), (15) and (19) of the definition of "Mortgage Loan
Schedule" accurately reflects information set forth in the Mortgage File. It is
herein acknowledged that, in conducting such review, the Trustee or such
Custodian was under no duty or obligation (i) to inspect, review or examine any
such documents, instruments, certificates or other papers to determine whether
they are genuine, enforceable, or appropriate for the represented purpose or
whether they have actually been recorded or that they are other than what they
purport to be on their face or (ii) to determine whether any Mortgage File
should include any of the documents specified in clause (v) of Section 2.01.

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

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

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

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

          (a) Upon discovery or receipt of notice (including notice under
Section 2.02) of any materially defective document in, or that a document is
missing from, the Mortgage File or of the breach by the Originator of any
representation, warranty or covenant under the Mortgage Loan Purchase Agreement
in respect of any Mortgage Loan which materially adversely affects the value of
such Mortgage Loan or the interest therein of the Certificateholders, the
Trustee shall promptly

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<PAGE>

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

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

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

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

          (B) on the later of (x) the Master Servicer Remittance Date next
     following the earlier of discovery by the Master Servicer or receipt of
     notice by the Master Servicer of the

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<PAGE>

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

          (iii) If with respect to any Prepayment Period,

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

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

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

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

          As to any Deleted Mortgage Loan for which the Originator or the
Depositor substitutes a Qualified Substitute Mortgage Loan or Loans, such
substitution shall be effected by the Originator or the Depositor, as the case
may be, delivering to the Trustee (or a Custodian on behalf of the Trustee), for
such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the
Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01, together with an Officers' Certificate providing that each such Qualified
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Shortfall Amount (as described below), if any, in connection with
such substitution. The Trustee (or a Custodian on behalf of the Trustee) shall
acknowledge

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<PAGE>

receipt for such Qualified Substitute Mortgage Loan or Loans and, within ten
Business Days thereafter, review such documents as specified in Section 2.02 and
deliver to the Depositor, the NIMS Insurer, the Trustee and the Master Servicer,
with respect to such Qualified Substitute Mortgage Loan or Loans, a
certification substantially in the form attached hereto as Exhibit C-1, with any
applicable exceptions noted thereon. Within one year of the date of
substitution, the Trustee shall deliver to the Depositor, the NIMS Insurer and
the Master Servicer a certification substantially in the form of Exhibit C-2
hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with
any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of
REMIC I and will be retained by the Depositor or the Originator, as the case may
be. For the month of substitution, distributions to Certificateholders will
reflect the Monthly Payment due on such Deleted Mortgage Loan on or before the
Due Date in the month of substitution, and the Depositor or the Originator, as
the case may be, shall thereafter be entitled to retain all amounts subsequently
received in respect of such Deleted Mortgage Loan. The Depositor shall give or
cause to be given written notice to the Certificateholders and the NIMS Insurer
that such substitution has taken place, shall amend the Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage Loan or
Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the
Trustee and the NIMS Insurer. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Agreement and, in the case of a
substitution effected by the Originator, the Mortgage Loan Purchase Agreement,
including all applicable representations and warranties thereof.

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

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

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<PAGE>

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

          SECTION 2.04. [Reserved].

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

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

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

          (ii) The Master Servicer has the full corporate power and authority to
     service each Mortgage Loan, and to execute, deliver and perform, and to
     enter into and consummate the transactions contemplated by this Agreement
     and has duly authorized by all necessary corporate action on the part of
     the Master Servicer the execution, delivery and performance of this
     Agreement; and this Agreement, assuming the due authorization, execution
     and delivery thereof by the Depositor and the Trustee, constitutes a legal,
     valid and binding obligation of the Master Servicer, enforceable against
     the Master Servicer in accordance with its terms, except to the extent that
     (a) the enforceability thereof may be limited by bankruptcy, insolvency,
     moratorium, receivership and other similar laws relating to creditors'
     rights generally and (b) the remedy of specific performance and injunctive
     and other forms of equitable relief may be subject to the equitable
     defenses and to the discretion of the court before which any proceeding
     therefor may be brought;

          (iii) The execution and delivery of this Agreement by the Master
     Servicer, the servicing of the Mortgage Loans by the Master Servicer
     hereunder, the consummation of any

                                       54

<PAGE>

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

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

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

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

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

          (viii) The Master Servicer will not waive any Prepayment Charge or
     part of a Prepayment Charge unless, (i) the enforceability thereof shall
     have been limited by bankruptcy, insolvency, moratorium, receivership and
     other similar laws relating to creditors' rights generally or (ii) the
     collectability thereof shall have been limited due to acceleration in
     connection with a foreclosure or other involuntary payment or (iii) in the
     Master Servicer's

                                       55

<PAGE>

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

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

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

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

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

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

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

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

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

          SECTION 2.08. Issuance of Class R Certificates.

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

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                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                              OF THE MORTGAGE LOANS

          SECTION 3.01. Master Servicer to Act as Master Servicer.

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

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

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

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

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

          Subject only to the above-described servicing standards and the terms
of this Agreement and of the respective Mortgage Loans, the Master Servicer
shall have full power and authority, acting alone or through Sub-Servicers as
provided in Section 6.06, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, the Master Servicer
in its own name or in the name of a Sub-Servicer is hereby authorized and
empowered by the Trustee, in accordance with the servicing standards set forth
above, (i) to execute and deliver, on behalf of the Certificateholders and the
Trustee, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, or of forbearance, or of modification and all
other comparable instruments, with respect to the Mortgage Loans and the
Mortgaged Properties, (ii) to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure to convert the ownership of such properties, and to
hold or cause to be held title to such properties, in the name of the Trust
Fund, on behalf of the Trustee and the Certificateholders, (iii) to market, sell
and transfer title of REO Properties held in the name of the Trust Fund to third
party purchasers upon terms and conditions the Master Servicer deems reasonable
under the Servicing Standard, (4) to bring or respond to civil actions or
complaints (in its own name or that of the Trust Fund or the Trustee on behalf
of the Trust Fund) related to any Mortgage Loan, Mortgaged Property or REO
Property held by the Trust Fund

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<PAGE>

and (5) execute any other document necessary or appropriate to enable the Master
Servicer to carry out its servicing and administrative duties hereunder
consistent with the Servicing Standard.

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

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

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

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

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

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

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<PAGE>

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

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

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

          SECTION 3.02. Collection of Certain Mortgage Loan Payments.

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

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

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<PAGE>

"forbearance"), PROVIDED, HOWEVER, that in determining which course of action
permitted by this sentence it shall pursue, the Master Servicer shall adhere to
the Loss Mitigation Action Plan. The Master Servicer's analysis supporting any
forbearance and the conclusion that any forbearance meets the standards of
Section 3.01 and the Loss Mitigation Action Plan shall be reflected in writing
in the Mortgage File.

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

          SECTION 3.03. [Reserved].

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

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

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

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

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

          (iii) all Insurance Proceeds and Liquidation Proceeds (other than
     proceeds to be held in the Escrow Account and applied to the restoration or
     repair of the Mortgaged

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<PAGE>

     Property or released to the Mortgagor in accordance with the Servicing
     Standard) and any amounts received in respect of the rental of any REO
     Property prior to REO Disposition;

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

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

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

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

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

          (ix) without duplication, all payments of claims under the PMI Policy.

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

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

          (d) DEPOSITS TO THE ESCROW ACCOUNT. The Master Servicer shall deposit
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the

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Master Servicer's receipt thereof, and shall thereafter deposit in the Escrow
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required
hereunder, and retain therein:

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

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

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

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

          (i) CREATION, LOCATION AND SUBSEQUENT TRANSFERS OF ACCOUNTS. Each
account created pursuant to this Agreement must be an Eligible Account. On or
prior to the Closing Date,

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the Master Servicer and the Trustee shall give notice, to each other, the NIMS
Insurer and the Depositor of the location of any account created by it pursuant
to this Agreement, in the form attached hereto as Exhibit K. From time to time,
the Master Servicer and the Trustee may each transfer any account created by it
to a different depository institution provided that upon such transfer the
written notice is provided to all other parties listed in the preceding
sentence.

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

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

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

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

          (xii) [reserved];

          (xii) to pay the PMI Insurer the PMI Insurer Fee; and

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

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

          The foregoing requirements for withdrawal from the Collection Account
shall be exclusive. In the event the Master Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding.

          The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          With respect to each Mortgage Loan, the Master Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of fire and hazard insurance coverage and, as to those
Mortgage Loans subject to a voluntary escrow agreement, shall obtain, from time
to time, all bills for the payment of such charges (including renewal premiums)
and shall effect payment thereof prior to the applicable penalty or termination
date and at a time appropriate for securing maximum discounts allowable,
employing for such purpose deposits of the Mortgagor in the Escrow Account which
shall have been estimated and accumulated by the Master Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage or
Applicable

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Regulations. The Master Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of the Mortgagor's faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments. To the extent that the Mortgage does not provide
for Escrow Payments, the Master Servicer shall use reasonable efforts consistent
with the Servicing Standard to determine that any such payments are made by the
Mortgagor at the time they first become due and shall ensure that the Mortgaged
Property is not lost to a tax lien as a result of nonpayment and that such
Mortgaged Property is not left uninsured.

          SECTION 3.08. Maintenance of Hazard Insurance.

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

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          SECTION 3.09. Maintenance of Mortgage Blanket Insurance.

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

          SECTION 3.10. Fidelity Bond; Errors and Omissions Insurance.

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

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

          The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note and/or the
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause, if any, applicable thereto; provided, however,
that the Master Servicer shall not exercise any such rights if prohibited by law
from doing so. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the

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

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

          SECTION 3.12. Realization Upon Defaulted Mortgage Loans.

          (a) The Master Servicer shall, consistent with the Servicing Standard
and the Loss Mitigation Action Plan, foreclose upon or otherwise comparably
convert the ownership of properties securing such of the Mortgage Loans as come
into and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 3.02. The Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that such costs and expenses will be
recoverable as Servicing Advances by the Master Servicer as contemplated in
Section 3.05 and Section 3.13. The foregoing is subject to the provision that,
in any case in which Mortgaged Property shall have suffered damage from an
Uninsured Cause, the Master Servicer shall not be required to expend its own
funds toward the restoration of such property unless it shall determine in its
discretion that such restoration will

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increase the proceeds of liquidation of the related Mortgage Loan after
reimbursement to itself for such expenses.

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

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

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

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

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

          If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The

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

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

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

          (a) The deed or certificate of sale of any REO Property shall be taken
in the name of the Trustee, or its nominee, in trust for the benefit of the
Certificateholders. Pursuant to the power of attorney granted in Section 3.01,
the Master Servicer is hereby authorized to transfer the title of any REO
Property taken in the name of the Trustee to a third party purchaser pursuant to
this Section 3.13 without further documentation of its authority as
attorney-in-fact for the Trustee on behalf of the Trust. The Master Servicer, on
behalf of the Trust Fund (and on behalf of the Trustee for the benefit of the
Certificateholders), shall either sell any REO Property before the close of the
third taxable year after the year the Trust Fund acquires ownership of such REO
Property for purposes of Section 860G(a)(8) of the Code or request from the
Internal Revenue Service, no later than 60 days before the day on which the
three-year grace period would otherwise expire, an extension of the three-year
grace period, unless the Master Servicer shall have delivered to the Trustee,
the NIMS Insurer and the Depositor an Opinion of Counsel, addressed to the
Trustee, the NIMS Insurer and the Depositor, to the effect that the holding by
the Trust Fund of such REO Property subsequent to three years after its
acquisition will not result in the imposition on any Trust REMIC of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any Trust REMIC to fail to qualify as a REMIC under Federal law at any
time that any Certificates are outstanding. The Master Servicer shall manage,
conserve, protect and operate each REO Property for the benefit of the
Certificateholders and solely for the purpose of its prompt disposition and sale
in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by any Trust REMIC of any "income from non-permitted
assets" within the meaning of Section 860F(a)(2)(B) of the Code, or any "net
income from foreclosure property" which is subject to taxation under the REMIC
Provisions.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (iii) none of the provisions of this Section 3.13(c) relating to any
     such contract or to actions taken through any such Independent Contractor
     shall be deemed to relieve the Master Servicer of any of its duties and
     obligations to the Trustee on behalf of the Certificateholders with respect
     to the operation and management of any such REO Property; and

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

          The Master Servicer shall be entitled to enter into any agreement with
any Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification. The Master Servicer shall be

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solely liable for all fees owed by it to any such Independent Contractor,
irrespective of whether the Master Servicer's compensation pursuant to Section
3.18 is sufficient to pay such fees. The Master Servicer shall not engage an
Independent Contractor to engage in any activities that the Master Servicer
would not be permitted to engage in itself in accordance with the other
provisions of this Agreement (including the Loss Mitigation Action Plan).

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

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

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

          SECTION 3.14. [Reserved].

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

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

          SECTION 3.16. Optional Purchase of Defaulted Mortgage Loans.

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

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

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

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

          (a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Master Servicer of a notification that payment in full shall be escrowed in
a manner customary for such purposes, the Master Servicer will promptly notify
the Trustee and any related Custodian by a certification in the form of Exhibit
E or such other form supplied by the Master Servicer provided that it does not
differ from the substantive content of Exhibit E, (which certification shall
include a statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Collection Account pursuant to Section 3.04(b) have been or will be so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File.

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Upon receipt of such certification and request, the Trustee or such Custodian,
as the case may be, shall promptly release (and in no event more than three (3)
Business Days thereafter) the related Mortgage File to the Master Servicer. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Distribution
Account.

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

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

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

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          SECTION 3.18. Servicing Compensation.

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

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

          SECTION 3.19. Statement as to Compliance.

          The Master Servicer will deliver to the Trustee, the NIMS Insurer, the
Depositor and each Rating Agency on or before March 15th of each calendar year
commencing in 2004, an Officers' Certificate stating, as to each signatory
thereof, that (i) a review of the activities of the Master Servicer during the
preceding year and of performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based on
such review, the Master Servicer has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Copies of any such statement shall be
provided by the Trustee to any Certificateholder and to any Person identified to
the Trustee as a prospective transferee of a Certificate, upon the request and
at the expense of the requesting party, provided that such statement is
delivered by the Master Servicer to the Trustee.

          SECTION 3.20. Independent Public Accountants' Servicing Report.

          Not later than March 15th of each calendar year commencing in 2004,
the Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes

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

          SECTION 3.21. Access to Certain Documentation.

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

          SECTION 3.22. [Reserved].

          SECTION 3.23. Advance Facility.

          (a) The Master Servicer and/or the Trustee on behalf of the Trust
Fund, in either case, with the consent of the NIMS Insurer and the Master
Servicer in the case of the Trustee, is hereby authorized to enter into a
facility with any Person which provides that such Person (an "Advancing Person")
may fund Advances and/or Servicing Advances to the Trust Fund under this
Agreement, although no such facility shall reduce or otherwise affect the Master
Servicer's obligation to fund such Advances and/or Servicing Advances. If the
Master Servicer enters into such

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

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

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

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

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

          SECTION 3.24. PMI Policy; Claims Under the PMI Policy.

          Notwithstanding anything to the contrary elsewhere in this Article
III, the Master Servicer shall not agree to any modification or assumption of a
PMI Mortgage Loan or take any other action with respect to a PMI Mortgage Loan
that could result in denial of coverage under the PMI Policy. The Master
Servicer shall notify the PMI Insurer that the Trustee, on behalf of the
Certificateholders, is the Insured, as that term is defined in the PMI Policy,
of each PMI Mortgage Loan. The Master Servicer shall, on behalf of the Trustee,
prepare and file on a timely basis with the PMI Insurer, with a copy to the
Trustee, all claims which may be made under the PMI Policy with respect to the
PMI Mortgage Loans. Consistent with all rights and obligations hereunder, the
Master Servicer shall take all actions required under the PMI Policy as a
condition to the payment of any such claim. Any amount received from the PMI
Insurer with respect to any such PMI Mortgage Loan shall be deposited by the
Master Servicer into the Collection Account in accordance with Section 3.04(b).

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

          SECTION 4.01. Distributions.

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

     (i) to Holders of REMIC I Regular Interest I-LTAA, REMIC Regular Interest
I-LTA1, REMIC Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I
Regular Interest I-LTM2, REMIC Regular Interest I-LTM3, REMIC Regular Interest
I-LTM4, REMIC I Regular Interest I-LTZZ and REMIC I Regular Interest I-LTP, PRO
RATA, in an amount equal to (A) the Uncertificated Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates. Amounts payable as Uncertificated Interest in
respect of REMIC I Regular Interest I-LTZZ shall be reduced and deferred when
the REMIC I Overcollateralized Amount is less than the REMIC I
Overcollateralization Target Amount, by the lesser of (x) the amount of such
difference and (y) the Maximum I-LTZZ Uncertificated Interest Deferral Amount
and such amount will be payable to the Holders of REMIC I Regular Interest
I-LTA1, REMIC I Regular Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC
I Regular Interest I-LTM2, REMIC I Regular Interest I-LTM3 and REMIC I Regular
Interest I-LTM4 in the same proportion as the Overcollateralization Increase
Amount is allocated to the Corresponding Certificates;

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

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

     (b) to the Holders of REMIC I Regular Interest I-LTA1, REMIC I Regular
Interest I-LTA2, REMIC I Regular Interest I-LTM1, REMIC I Regular Interest
I-LTM2, REMIC I Regular Interest I-LTM3 and REMIC I Regular Interest I-LTM4,
1.00% of such remainder (other than amounts payable under clause (d) below), in
the same proportion as principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Balances of such REMIC I Regular
Interests are reduced to zero;

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     (c) to the Holders of REMIC I Regular Interest I-LTZZ, 1.00% of such
remainder (other than amounts payable under clause (d) below), until the
Uncertificated Balance of such REMIC I Regular Interest is reduced to zero; then

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

provided, however, that (i) 98.00% and (ii) 2.00% of any principal payments that
are attributable to an Overcollateralization Reduction Amount shall be allocated
to Holders of (i) REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTP, in that order and (ii) REMIC I Regular Interest I-LTP, respectively;
provided that REMIC I Regular Interest I-LTP shall not be reduced until the
Distribution Date immediately following the expiration of the latest Prepayment
Charge as identified on the Prepayment Charge Schedule or any Distribution Date
thereafter, at which point such amount shall be distributed to REMIC I Regular
Interest I-LTP, until $100 has been distributed pursuant to this clause.

          On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
will be distributed by REMIC I to the Holders of REMIC I Regular Interest I-LTP.
The payment of the foregoing amounts to the Holders of REMIC I Regular Interest
I-LTP shall not reduce the Uncertificated Balance thereof.

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

          (i) to the Holders of the Class A-1 Certificates, an amount equal to
     the Senior Interest Distribution Amount allocable to such Class;

          (ii) to the Holders of the Class A-2 Certificates, an amount equal to
     the Senior Interest Distribution Amount allocable to such Certificates, to
     the extent remaining unpaid after the distribution of the Group II Interest
     Remittance Amount as set forth in Section 4.01(a)(2)(II) below;

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

          (i) to the Holders of the Class A-2 Certificates, an amount equal to
     the Senior Interest Distribution Amount allocable to such Class;

          (ii) to the Holders of the Class A-1 Certificates, an amount equal to
     the Senior Interest Distribution Amount allocable to such Certificates, to
     the extent remaining unpaid after the distribution of the Group I Interest
     Remittance Amount as set forth in Section 4.01(a)(2)(I) above;

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          (III) On each Distribution Date, following the distributions made
pursuant to Section 4.01(a)(2)(I) and (II) above, the Trustee shall withdraw
from the Distribution Account an amount equal to any remaining Group I Interest
Remittance Amount and Group II Interest Remittance Amount and distribute to the
Certificateholders the following amounts, in the following order of priority:

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

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

          (iii) to the Holders of the Class M-3 Certificates, an amount equal to
     the Interest Distribution Amount allocable to the Class M-3 Certificates;
     and

          (iv) to the Holders of the Class M-4 Certificates, an amount equal to
     the Interest Distribution Amount allocable to the Class M-4 Certificates.

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

          (i) to the holders of the Class A-1 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero; and

          (ii) to the holders of the Class A-2 Certificates, after taking into
     account the distribution of the Group II Principal Distribution Amount
     pursuant to Section 4.01(a)(3)(II), until the Certificate Principal Balance
     of the Class A-2 Certificates has been reduced to zero.

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

          (i) to the holders of the Class A-2 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero; and

          (ii) to the holders of the Class A-1 Certificates, after taking into
     account the distribution of the Group I Principal Distribution Amount
     pursuant to Section 4.01(a)(3)(I), until the Certificate Principal Balance
     of the Class A-1 Certificates has been reduced to zero.

          (III) On each Distribution Date (a) prior to the Stepdown Date or (b)
on which a Trigger Event is in effect, the Trustee shall withdraw from the
Distribution Account an amount equal to the sum of the Group I Principal
Distribution Amount and the Group II Principal Distribution

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Amount remaining undistributed for such Distribution Date and distribute to the
Certificateholders the following amounts, in the following order of priority:

          (i) to the holders of the Class M-1 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero;

          (ii) to the holders of the Class M-2 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero;

          (iii) to the holders of the Class M-3 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero; and

          (iv) to the holders of the Class M-4 Certificates, until the
     Certificate Principal Balance thereof has been reduced to zero.

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

          (i) to the holders of the Class A-1 Certificates, the Class A-1
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

          (ii) to the extent of the portion, if any, of the Class A-1 Principal
     Distribution Amount remaining undistributed pursuant to Section
     4.01(a)(3)(IV)(i) above, to the holders of the Class A-2 Certificates,
     after taking into account the distribution of the Group II Principal
     Distribution Amount as described in Section 4.01(a)(3)(V)(i) below, until
     the Certificate Principal Balance thereof has been reduced to zero; and

          (iii) to the holders of the Class A-2 Certificates, after taking into
     account the distribution of the Group II Principal Distribution Amount, in
     Section 4.01(a)(3)(V)(i) below, up to an amount equal to the Class A-2
     Principal Distribution Amount, until the Certificate Principal Balance of
     the Class A-2 Certificates has been reduced to zero.

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

          (i) to the holders of the Class A-2 Certificates, the Class A-2
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero;

          (ii) to the extent of the portion, if any, of the Class A-2 Principal
     Distribution Amount remaining undistributed pursuant to clause Section
     4.01(a)(3)(V)(i) above, to the

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     holders of the Class A-1 Certificates, after taking into account the
     distribution of the Group I Principal Distribution Amount Section
     4.01(a)(3)(IV)(i) above, until the Certificate Principal Balance thereof
     has been reduced to zero; and

          (iii) to the holders of the Class A-1 Certificates, after taking into
     account the distribution of the Group I Principal Distribution Amount, as
     described in Section 4.01(a)(3)(IV)(i) above, up to an amount equal to the
     Class A-1 Principal Distribution Amount, until the Certificate Principal
     Balance of thereof has been reduced to zero.

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

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

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

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

          (iv) to the holders of the Class M-4 Certificates, the Class M-4
     Principal Distribution Amount, until the Certificate Principal Balance
     thereof has been reduced to zero.

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

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

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

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

          (iv) to the Holders of the Class M-3 Certificates, in an amount equal
     to the Interest Carry Forward Amount allocable to such Class of
     Certificates;

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          (v) to the Holders of the Class M-4 Certificates, in an amount equal
     to the Interest Carry Forward Amount allocable to such Class of
     Certificates;

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

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

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

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

          FIRST, concurrently, to the Class A Certificates on a PRO RATA basis
based on the respective Net WAC Rate Carryover Amounts for such Classes of
Certificates, until each such amount has been paid in full, first, with respect
to the Class A-2 Certificates, from payments made under the related Cap Contract
and second, from amounts on deposit in the Net WAC Rate Carryover Reserve
Account, but only to the extent of amounts on deposit in the Net WAC Rate
Carryover Reserve Account other than amounts paid under the Cap Contracts;

          SECOND, to the Class M-1 Certificates, first, from payments made under
the related Cap Contract and second, from amounts on deposit in the Net WAC Rate
Carryover Reserve Account other than amounts paid under the Cap Contracts;

          THIRD, to the Class M-2 Certificates, first, from payments made under
the related Cap Contract and second, from amounts on deposit in the Net WAC Rate
Carryover Reserve Account other than amounts paid under the Cap Contracts,
FOURTH, to the Class M-3 Certificates; and

          FIFTH, to the Class M-4 Certificates, in each case to the extent the
Net WAC Carryover Amount is allocable to each such Class.

          On each Distribution Date, the Trustee shall withdraw any amounts then
on deposit in the Distribution Account that represent Prepayment Charges
collected by the Master Servicer, Prepayment Charges payable by the Master
Servicer pursuant to Section 2.03(b)(ii)(A) and Master Servicer Prepayment
Charge Payment Amounts payable by the Master servicer pursuant to Section

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2.03(b)(ii)(B), subject to Section 2.03(b)(iii), in each case to the extent not
related to Principal Prepayments occurring after the related Prepayment Period,
and the Trustee shall distribute such amounts to the Holders of the Class P
Certificates. Such distributions shall not be applied to reduce the Certificate
Principal Balance of the Class P Certificates.

          (c) All distributions made with respect to each Class of Certificates
on each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates on each Distribution Date will
be made to the Holders of the respective Class of record on the related Record
Date (except as otherwise provided in Section 4.01(e) or Section 9.01 respecting
the final distribution on such Class), based on the aggregate Percentage
Interest represented by their respective Certificates, and shall be made by wire
transfer of immediately available funds to the account of any such Holder at a
bank or other entity having appropriate facilities therefor, if such Holder
shall have so notified the Trustee in writing at least five Business Days prior
to the Record Date immediately prior to such Distribution Date, or otherwise by
check mailed by first class mail to the address of such Holder appearing in the
Certificate Register. The final distribution on each Certificate will be made in
like manner, but only upon presentment and surrender of such Certificate at the
office of the Trustee maintained for such purpose pursuant to Section 8.12 or
such other location specified in the notice to Certificateholders of such final
distribution.

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

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

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

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

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

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

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

          SECTION 4.02. Statements to Certificateholders.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (xxiii) the respective Pass-Through Rates applicable to the Class A
     Certificates, the Mezzanine Certificates and the Class CE Certificates for
     such Distribution Date and the Pass-Through Rate applicable to the Class A
     Certificates and the Mezzanine Certificates (other than the Class M-4
     Certificates) for the immediately succeeding Distribution Date;

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

          (xxv) [reserved];

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

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

          (xxviii) (A) the dollar amount of claims made under the PMI Policy
     that were denied (as identified by the Master Servicer) during the
     Prepayment Period (and the number of Mortgage Loans to which such denials
     related) and (B) the dollar amount of the cumulative claims made under the
     PMI Policy that were denied since the Closing Date (and the number of
     Mortgage Loans to which such denials related).

          The Trustee will make such statement (and, at its option, any
additional files containing the same information in an alternative format)
available each month to Certificateholders, the NIMS Insurer, the Master
Servicer and the Rating Agencies via the Trustee's internet website. The
Trustee's internet website shall initially be located at
https:\\www.corporatetrust.db.com and assistance in using the website can be
obtained by calling the Trustee's customer service desk at 1- 800-735-7777.
Parties that are unable to use the above distribution options are entitled to
have a paper copy mailed to them via first class mail by calling the customer
service desk and indicating such. The Trustee shall have the right to change the
way such statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Trustee shall
provide timely and adequate notification to all above parties regarding any such
changes.

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

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

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

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be prepared by the Trustee and furnished to such Holders pursuant to the rules
and regulations of the Code as are in force from time to time.

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

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

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

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

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

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

          On or before 3:00 p.m. New York time on the Master Servicer Remittance
Date, the Master Servicer shall remit in immediately available funds to the
Trustee for deposit in the Distribution Account an amount equal to the aggregate
amount of Advances, if any, to be made in respect of the Mortgage Loans and REO
Properties for the related Distribution Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
distribution (in which case, it will cause to be made an appropriate entry in
the records of Collection Account that amounts held for future distribution have
been, as permitted by this Section 4.03, used by the Master Servicer in
discharge of any such Advance) or (iii) in the form of any combination of (i)
and (ii) aggregating the total amount of Advances to be made by the Master
Servicer with respect to the Mortgage Loans and REO Properties. Any amounts held
for future distribution used by the Master Servicer to make a Advance as
permitted in the preceding sentence or withdrawn by the Master Servicer as
permitted in Section 3.05(a)(vii) in reimbursement of Advances previously made
shall be appropriately reflected in the Master Servicer's records and replaced
by the Master Servicer by deposit in the Collection Account on or before any
future Master Servicer Remittance Date to the extent that the Available Funds
for the related Distribution Date (determined without regard to Advances to be
made on the Master Servicer Remittance Date) shall be less than the total amount
that would be distributed to the Classes of Certificateholders pursuant to
Section 4.01 on such Distribution Date if such amounts held for future
distributions had not been so used to make Advances. The Trustee will provide
notice to the Master Servicer and the NIMS Insurer by telecopy by the close of
business on any Master Servicer Remittance Date in the event that the amount
remitted by the Master Servicer to the Trustee on such date is less than the
Advances required to be made by the Master Servicer for the related Distribution
Date.

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

          (d) Notwithstanding anything herein to the contrary, no Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such Advance or Servicing Advance would, if made, constitute a Nonrecoverable
Advance or Nonrecoverable Servicing Advance. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or a Nonrecoverable Servicing
Advance or that any proposed Advance or Servicing Advance, if made,

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would constitute a Nonrecoverable Advance or Nonrecoverable Servicing Advance,
respectively, shall be evidenced by an Officers' Certificate of the Master
Servicer delivered to the Trustee and the NIMS Insurer.

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

          SECTION 4.04. Allocation of Realized Losses.

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

          (b) All Realized Losses on the Mortgage Loans shall be allocated to
any REMIC II Regular Interest pursuant to Section 4.04(c), shall be allocated by
the Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class CE Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-4 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
fourth, to the Class M-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; fifth, to the Class M-2 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero; and sixth,
to the Class M-1 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero. All Realized Losses to be allocated to the Certificate
Principal Balances of all Classes on any Distribution Date shall be so allocated
after the actual distributions to be made on such date as provided above. All
references above to the Certificate Principal Balance of any Class of
Certificates shall be to the Certificate Principal Balance of such Class
immediately prior to the

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relevant Distribution Date, before reduction thereof by any Realized Losses, in
each case to be allocated to such Class of Certificates, on such Distribution
Date.

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

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

          (c) All Realized Losses on the Mortgage Loans shall be allocated by
the Trustee on each Distribution Date to the following REMIC I Regular Interests
in the specified percentages, as follows: first, to Uncertificated Interest
payable to the REMIC I Regular Interest I-LTAA and REMIC I Regular Interest
I-LTZZ up to an aggregate amount equal to the REMIC I Interest Loss Allocation
Amount, 98% and 2%, respectively; second, to the Uncertificated Balances of the
REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an
aggregate amount equal to the REMIC I Principal Loss Allocation Amount, 98% and
2%, respectively; third, to the Uncertificated Balances of REMIC I Regular
Interest I-LTAA, REMIC I Regular Interest I-LTM4 and REMIC I Regular Interest
I-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated Balance of REMIC
I Regular Interest I-LTM4 has been reduced to zero; fourth to the Uncertificated
Balances of REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM3 and
REMIC I Regular Interest I-LTZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Balance of REMIC I Regular Interest I-LTM3 has been reduced to
zero; fifth to the Uncertificated Balances of REMIC I Regular Interest I-LTAA,
REMIC I Regular Interest I-LTM2 and REMIC I Regular Interest I-LTZZ, 98%, 1% and
1%, respectively, until the Uncertificated Balance of REMIC I Regular Interest
I-LTM2 has been reduced to zero; and sixth to the Uncertificated Balances of
REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTM1 and REMIC I
Regular Interest II-LTZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Balance of REMIC I Regular Interest I-LTM1 has been reduced to zero.

          SECTION 4.05. Compliance with Withholding Requirements.

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

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

          SECTION 4.06. Commission Reporting.

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

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

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

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

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

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

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

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

          SECTION 4.07. [Reserved].

          SECTION 4.08. [Reserved].

          SECTION 4.09. [Reserved].

          SECTION 4.10 Net WAC Rate Carryover Reserve Account.

          (a) No later than the Closing Date, the Trustee shall establish and
maintain with itself, as agent for the Trustee, a separate, segregated trust
account titled, "Net WAC Rate Carryover Reserve Account, Deutsche Bank National
Trust Company, as Trustee, in trust for the registered holders of Ameriquest
Mortgage Securities Inc., Asset-Backed Pass-Through Certificates, Series
2003-AR1." On the Closing Date, the Depositor will deposit, or cause to be
deposited, into the Net WAC Rate Carryover Reserve Account $1,000. In addition,
the amount in the Net WAC Rate Carryover Reserve Account shall include any
payments received by the Trustee under the Cap

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Contracts and deposited into the Net WAC Rate Carryover Reserve Account for the
benefit of the Holders of the Class A-2 Certificates, the Class M-1 Certificates
and the Class M-2 Certificates.

          (b) On each Distribution Date as to which there is a Net WAC Rate
Carryover Amount payable to the Class A Certificates or the Mezzanine
Certificates, the Trustee has been directed by the Class CE Certificateholders
to, and therefore will, deposit into the Net WAC Rate Carryover Reserve Account
the amount of such Net WAC Rate Carryover Amount, rather than distributing such
amounts to the Class CE Certificateholders. On each such Distribution Date, the
Trustee shall hold all such amounts for the benefit of the Holders of the Class
A Certificates and the Mezzanine Certificates, and will distribute such amounts
to the Holders of the Class A Certificates and the Mezzanine Certificates in the
amounts and priorities set forth in Section 4.01(a). If no Net WAC Rate
Carryover Amounts are payable on a Distribution Date, the Trustee shall deposit
into the Net WAC Rate Carryover Reserve Account on behalf of the Class CE
Certificateholders, from amounts otherwise distributable to the Class CE
Certificateholders, an amount such that when added to other amounts already on
deposit in the Net WAC Rate Carryover Reserve Account, the aggregate amount on
deposit therein is equal to $1,000. Any amounts deposited into the Net WAC Rate
Carryover Reserve Account from payments received under each Cap Contract shall
be for the sole and exclusive benefit of the Holders of the Class A-2
Certificates, the Class M-1 Certificates and the Class M-2 Certificates until
the Distribution Date on which the Certificate Principal Balance of such related
Certificates has been reduced to zero and after such Distribution Date, payments
received under the related Cap Contract shall be made by the Trustee to the
Originator.

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

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

          (e) At the written direction of the Holders of a majority in
Percentage Interest in the Class CE Certificates, the Trustee shall direct any
depository institution maintaining the Net WAC Rate Carryover Reserve Account to
invest the funds in such account in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, (i) no

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later than the Business Day immediately preceding the date on which such funds
are required to be withdrawn from such account pursuant to this Agreement, if a
Person other than the Trustee or an Affiliate manages or advises such
investment, and (ii) no later than the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement, if the Trustee or an
Affiliate manages or advises such investment. If no investment direction of the
Holders of a majority in Percentage Interest in the Class CE Certificates with
respect to the Net WAC Rate Carryover Reserve Account is received by the
Trustee, the Trustee shall invest the funds in the Deutsche Bank Institutional
Cash Management Fund 16-79 so long as it is a Permitted Investment. Interest
earned on such investment shall be deposited into the Net WAC Rate Carryover
Reserve Account.

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

          SECTION 4.11. [Reserved].

          SECTION 4.12. Excess Net WAC Rate Reserve Account.

          No later than the Closing Date, the Trustee shall establish and
maintain with itself a separate, segregated trust account titled, "Excess Net
WAC Rate Reserve Account, Deutsche Bank National Trust Company, as Trustee, in
trust for registered Holders of Ameriquest Mortgage Securities Inc. Loan Trust
2003-AR1, Asset-Backed Certificates, Series 2003-AR1."

          On each Distribution Date as to which there is an Excess Group Net WAC
Pass- Through Rate Amount payable to the Class A Certificates or the Class CE
Certificates, the Trustee has been directed by the Class A Certificateholders
to, and therefore will, deposit into the Excess Net WAC Reserve Fund, the Excess
Pool Net WAC Pass-Through Rate Amount rather than distributing such amounts to
the applicable Class A Certificateholders. On each such Distribution Date, the
Trustee shall hold all such amounts for the benefit of the Holders of the
applicable Class A Certificates or the Class CE Certificates, and will
distribute such amounts to the Holders of the applicable Class A Certificates
and/or the Holders of the Class CE Certificates to the extent of the Excess Pool
Net WAC Pass-Through Rate Amount.

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

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          By accepting a Class A Certificate, such Certificateholders hereby
agree to direct the Trustee, and the Trustee hereby is directed, to deposit into
the Excess Net WAC Rate Reserve Account the amounts described above on each
Distribution Date as to which there is any Excess Pool Net WAC Pass-Through Rate
Amount rather than distributing such amounts to the Class A Certificates or
Mezzanine Certificates, as applicable. By accepting a Class A Certificate, each
such Certificateholder further agrees that such direction is given for good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
such acceptance.

          Amounts on deposit in the Excess Net WAC Rate Reserve Account shall
remain uninvested.

          For federal tax return and information reporting, the right of the
Class A Certificateholders and Holders of the Class CE Certificates to receive
payments from the Excess Net WAC Rate Reserve Account in respect of any Excess
Pool Net WAC Pass-Through Rate Amount shall be assigned a value of zero.

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                                    ARTICLE V

                                THE CERTIFICATES

          SECTION 5.01. The Certificates.

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

          The Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-9. The Certificates of each Class will be issuable in
registered form only, in denominations of authorized Percentage Interests as
described in the definition thereof. Each Certificate will share ratably in all
rights of the related Class.

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

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

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<PAGE>

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

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

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

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          SECTION 5.02. Registration of Transfer and Exchange of Certificates.

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

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

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

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

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

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

          (d)(i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Certificate Registrar or its designee under
clause (iii)(A) below to deliver payments to a Person other than such Person and
to negotiate the terms of any mandatory sale under clause (iii)(B) below and to
execute

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all instruments of Transfer and to do all other things necessary in connection
with any such sale. The rights of each Person acquiring any Ownership Interest
in a Residual Certificate are expressly subject to the following provisions:

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

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

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

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

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

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

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have received a representation letter from the Transferee of such Certificate to
the effect that such Transferee is a Permitted Transferee.

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

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

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

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

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

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

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

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

          (f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 8.12. Whenever any Certificates are so surrendered for
exchange the Trustee, shall execute and cause the Certificate Registrar to
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing. In addition, with respect to
each Residual Certificate, the Holder thereof may exchange, in the manner
described above, the Class R Certificate for three separate Certificates, each
representing such Holder's respective Percentage Interest in the Class R-I
Interest and the Class R-II Interest, respectively, in each case that was
evidenced by the Class R Certificate being exchanged.

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

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

          (i) The Trustee will cause the Certificate Registrar (unless the
Trustee is acting as Certificate Registrar) to provide notice to the Trustee of
each transfer of a Certificate and to

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provide the Trustee with an updated copy of the Certificate Register on the
first Business Day in March and August of each year, commencing in August 2003.

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

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

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

          SECTION 5.04. Persons Deemed Owners.

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

          SECTION 5.05. Certain Available Information.

          On or prior to the date of the first sale of any Class CE Certificate,
Class P Certificate or Residual Certificate to an Independent third party, the
Depositor shall provide to the Trustee ten copies of any private placement
memorandum or other disclosure document used by the Depositor in connection with
the offer and sale of the Class CE Certificates, the Class P Certificates or the
Residual Certificates. In addition, if any such private placement memorandum or
disclosure document is revised, amended or supplemented at any time following
the delivery thereof to the Trustee, the Depositor promptly shall inform the
Trustee of such event and shall deliver to the Trustee ten copies of the private
placement memorandum or disclosure document, as revised, amended or
supplemented. The Trustee shall maintain at its Corporate Trust Office and shall
make available free of charge during normal business hours for review by any
Holder of a Certificate or any Person identified to the Trustee as a prospective
transferee of a Certificate, originals or copies

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of the following items: (i) in the case of a Holder or prospective transferee of
a Class CE Certificate, a Class P Certificate or a Residual Certificate, the
private placement memorandum or other disclosure document relating to such
Certificates, if any, in the form most recently provided to the Trustee; and
(ii) in all cases, (A) this Agreement and any amendments hereof entered into
pursuant to Section 11.01, (B) all monthly statements required to be delivered
to Certificateholders of the relevant Class pursuant to Section 4.02 since the
Closing Date, and all other notices, reports, statements and written
communications delivered to the Certificateholders of the relevant Class
pursuant to this Agreement since the Closing Date, (C) all certifications
delivered by a Responsible Officer of the Trustee since the Closing Date
pursuant to Section 10.01(h), (D) any and all Officers' Certificates delivered
to the Trustee by the Master Servicer since the Closing Date to evidence the
Master Servicer's determination that any Advance or Servicing Advance was, or if
made, would be a Nonrecoverable Advance or Nonrecoverable Servicing Advance,
respectively, and (E) any and all Officers' Certificates delivered to the
Trustee by the Master Servicer since the Closing Date pursuant to Section
4.04(a). Copies and mailing of any and all of the foregoing items will be
available from the Trustee upon request at the expense of the person requesting
the same.

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                                   ARTICLE VI

                      THE DEPOSITOR AND THE MASTER SERVICER

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

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

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

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

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

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

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

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

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

          SECTION 6.04. Limitation on Resignation of the Master Servicer.

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

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

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

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

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

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

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

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

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

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          SECTION 6.07. Successor Sub-Servicers.

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

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

          SECTION 6.08. Liability of the Master Servicer.

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

          SECTION 6.09. No Contractual Relationship Between Sub-Servicers and
                        the NIMS Insurer, the Trustee or Certificateholders.

          Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such shall be deemed to be between the Sub-Servicer and the
Master Servicer alone, and the NIMS Insurer, the Trustee and Certificateholders
shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Sub-Servicer except as
set forth in Section 6.10. The Master Servicer shall be solely liable for all
fees owed by it to any Sub-Servicer, irrespective of whether the Master
Servicer's compensation pursuant to this Agreement is sufficient to pay such
fees.

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          SECTION 6.10. Assumption or Termination of Sub-Servicing Agreements by
                        Trustee.

          In the event the Master Servicer shall for any reason no longer be the
master servicer (including termination due to a Master Servicer Event of
Default), the Trustee or its designee shall thereupon assume (or cause its
designee or the successor master servicer for the Trustee appointed pursuant to
Section 7.02 to assume) all of the rights and obligations of the Master Servicer
under each Sub-Servicing Agreement that the Master Servicer may have entered
into, unless the Trustee elects to terminate any Sub-Servicing Agreement in
accordance with its terms as provided in Section 6.07. Upon such assumption, the
Trustee, its designee or the successor servicer for the Trustee appointed
pursuant to Section 7.02 shall be deemed, subject to Section 6.07, to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to each Sub-Servicing Agreement to the same extent as
if each Sub-Servicing Agreement had been assigned to the assuming party, except
that (i) the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its
designee or any successor Master Servicer shall be deemed to have assumed any
liability or obligation of the Master Servicer that arose before it ceased to be
the Master Servicer.

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

          SECTION 6.11. Sub-Servicing Accounts.

          In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account. The
Sub-Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Sub-Servicer's
receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer
less its servicing compensation to the extent permitted by the Sub-Servicing
Agreement, and shall thereafter deposit such amounts in the Sub-Servicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Sub- Servicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Master Servicer
for deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Sub-Servicing Account. For purposes of this
Agreement, the Master Servicer shall be deemed to have received payments on the
Mortgage Loans when the Sub-Servicer receives such payments.

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                                   ARTICLE VII

                                     DEFAULT

          SECTION 7.01. Master Servicer Events of Default.

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

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

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

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

          (iv) the Master Servicer shall consent to the appointment of a
     conservator or receiver or liquidator in any insolvency, readjustment of
     debt, marshalling of assets and liabilities or similar proceedings of or
     relating to the Master Servicer or of or relating to all or substantially
     all of its property; or

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

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

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

          If a Master Servicer Event of Default described in clauses (i) through
(vi) of this Section shall occur, then, and in each and every such case, so long
as such Master Servicer Event of Default shall not have been remedied, the
Depositor, the NIMS Insurer or the Trustee may, and at the written direction of
the Holders of Certificates entitled to at least 51% of Voting Rights, or at the
direction of the NIMS Insurer, the Trustee shall, by notice in writing to the
Master Servicer and the Depositor, terminate all of the rights and obligations
of the Master Servicer in its capacity as Master Servicer under this Agreement,
to the extent permitted by law, and in and to the Mortgage Loans and the
proceeds thereof. If a Master Servicer Event of Default described in clause
(vii) hereof shall occur, the Trustee shall, by notice in writing to the Master
Servicer and the Depositor, terminate all of the rights and obligations of the
Master Servicer in its capacity as Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof and the Trustee or a
successor Master Servicer appointed in accordance with Section 7.02, shall
immediately make such Advance and assume, pursuant to Section 7.02, the duties
of a successor Master Servicer. On or after the receipt by the Master Servicer
of such written notice, all authority and power of the Master Servicer under
this Agreement, whether with respect to the Certificates (other than as a Holder
of any Certificate) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section and, without
limitation, the Trustee is hereby authorized and empowered, as attorney-in-fact
or otherwise, to execute and deliver on behalf of and at the expense of the
Master Servicer, any and all documents and other instruments and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees, at its sole cost and expense, promptly
(and in any event no later than ten Business Days subsequent to such notice) to
provide the Trustee with all documents and records requested by it to enable it
to assume the Master Servicer's functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Agreement, including, without limitation,
the transfer within one Business Day to the Trustee for administration by it of
all cash amounts which at the time shall be or should have been credited by the
Master Servicer to the Collection Account held by or on behalf of the Master
Servicer, the Distribution Account or any REO Account or Servicing Account held
by or on behalf of the Master Servicer or thereafter be received with respect to
the Mortgage Loans or any REO Property serviced by the Master Servicer
(provided, however, that the Master Servicer shall continue to be entitled to
receive all amounts accrued or owing to it under this Agreement on or prior to
the date of such termination, whether in respect of Advances or otherwise, and
shall continue to be entitled to the benefits of Section 6.03, notwithstanding
any such

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

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

          SECTION 7.02. Trustee to Act; Appointment of Successor.

          (a) On and after the time the Master Servicer receives a notice of
termination, the Trustee shall be the successor in all respects to the Master
Servicer in its capacity as Master Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto and arising thereafter
placed on the Master Servicer (except for any representations or warranties of
the Master Servicer under this Agreement, the responsibilities, duties and
liabilities contained in Section 2.03(c) and its obligation to deposit amounts
in respect of losses pursuant to Section 3.06) by the terms and provisions
hereof including, without limitation, the Master Servicer's obligations to make
Advances pursuant to Section 4.03; provided, however, that if the Trustee is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated to
make Advances pursuant to Section 4.03; and provided further, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by Section 7.01 shall not be considered
a default by the Trustee as successor to the Master Servicer hereunder;
provided, however, it is understood and acknowledged by the parties that there
will be a period of transition (not to exceed 90 days) before the servicing
transfer is fully effected. As compensation therefor, effective from and after
the time the Master Servicer receives a notice of termination or immediately
upon assumption of the obligations to make Advances, the Trustee shall be
entitled to the Servicing Fee and all funds relating to the Mortgage Loans to
which the Master Servicer would have been entitled if it had continued to act
hereunder (other than amounts which were due or would become due to the Master
Servicer prior to its termination or resignation). Notwithstanding the above and
subject to the next paragraph, the Trustee may, if it shall be unwilling to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans, or if the Holders of
Certificates entitled to at least 51% of the Voting Rights or the NIMS Insurer
so request in writing to the Trustee promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency and the NIMS Insurer and having a
net worth of not less than $15,000,000 as the successor to the Master Servicer
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement. No appointment of a successor to the Master Servicer under this
Agreement shall be effective until the assumption by the successor of all of the
Master Servicer's responsibilities, duties and liabilities hereunder. In
connection with such appointment and assumption described herein, the Trustee
may make such

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arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the Master Servicer as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer under this
Agreement, the Trustee shall act in such capacity as hereinabove provided.

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

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

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advance, without interest, by withdrawing from the Distribution Account, out of
amounts on deposit therein, an amount equal to the portion of such advance
attributable to the Stayed Funds.

          (c) If the Master Servicer is terminated pursuant to Section 7.01,
then the successor Master Servicer shall not be permitted to reimburse itself
directly for Advances or Servicing Advances under Section 3.05(a)(ii), Section
3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii) if the Master Servicer
has not been fully reimbursed for its Advances and Servicing Advances, but
instead the successor Master Servicer shall include such amounts in the
applicable remittance to the Trustee made pursuant to Section 3.04(g) to the
extent of amounts on deposit in the Collection Account on the related Master
Servicer Remittance Date. The Trustee is hereby authorized to pay to the
terminated Master Servicer (or the related Advancing Person in accordance with
Section 3.23) and the successor Master Servicer, as applicable, reimbursements
for Advances and Servicing Advances from the Distribution Account to the same
extent each such Master Servicer would have been permitted to reimburse itself
for such Advances and/or Servicing Advances in accordance with Section
3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or Section 3.05(a)(vii),
as the case may be. All Advances and Servicing Advances made pursuant to the
terms of this Agreement shall be deemed made and shall be reimbursed on a "first
in-first out" (FIFO) basis. At such time as the Master Servicer (or related
Advancing Person) has been reimbursed for all Advances and Servicing Advances
made by it, the successor Master Servicer shall no longer be required to remit
in accordance with the first sentence of this Section 7.02(c) and shall then be
permitted to reimburse itself directly for Advances and Servicing Advances in
accordance with Section 3.05(a)(ii), Section 3.05(a)(iii), Section 3.05(a)(v) or
Section 3.05(a)(vii).

          SECTION 7.03. Notification to Certificateholders.

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

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

          SECTION 7.04. Waiver of Master Servicer Events of Default.

          The Holders representing at least 66% of the Voting Rights (with the
consent of the NIMS Insurer) evidenced by all Classes of Certificates affected
by any default or Master Servicer Event of Default hereunder may waive such
default or Master Servicer Event of Default; PROVIDED, HOWEVER, that a default
or Master Servicer Event of Default under clause (i) or (vii) of Section 7.01
may be waived only by all of the Holders of the Regular Certificates (with the
consent of the NIMS Insurer). Upon any such waiver of a default or Master
Servicer Event of Default, such default or Master Servicer Event of Default
shall cease to exist and shall be deemed to have been remedied for

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every purpose hereunder. No such waiver shall extend to any subsequent or other
default or Master Servicer Event of Default or impair any right consequent
thereon except to the extent expressly so waived.

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

          SECTION 8.01. Duties of Trustee.

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

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

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

          (i) Prior to the occurrence of a Master Servicer Event of Default, and
     after the curing of all such Master Servicer Events of Default which may
     have occurred, the duties and obligations of the Trustee shall be
     determined solely by the express provisions of this Agreement, the Trustee
     shall not be liable except for the performance of such duties and
     obligations as are specifically set forth in this Agreement, no implied
     covenants or obligations shall be read into this Agreement against the
     Trustee and, in the absence of bad faith on the part of the Trustee, the
     Trustee may conclusively rely, as to the truth of the statements and the
     correctness of the opinions expressed therein, upon any certificates or
     opinions furnished to the Trustee that conform to the requirements of this
     Agreement;

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

          (iii) The Trustee shall not be personally liable with respect to any
     action taken, suffered or omitted to be taken by it in good faith in
     accordance with the direction of the NIMS Insurer or the Holders of
     Certificates entitled to at least 25% of the Voting Rights relating to the
     time, method and place of conducting any proceeding for any remedy
     available to the Trustee or exercising any trust or power conferred upon
     it, under this Agreement.

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          The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it, and
none of the provisions contained in this Agreement shall in any event require it
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer under this Agreement, except during such
time, if any, as the Trustee shall be the successor to, and be vested with the
rights, duties, powers and privileges of, the Master Servicer in accordance with
the terms of this Agreement.

          SECTION 8.02. Certain Matters Affecting the Trustee.

          (a) Except as otherwise provided in Section 8.01:

          (i) The Trustee may request and rely upon and shall be protected in
     acting or refraining from acting upon any resolution, Officers'
     Certificate, certificate of auditors or any other certificate, statement,
     instrument, opinion, report, notice, request, consent, order, appraisal,
     bond or other paper or document reasonably believed by it to be genuine and
     to have been signed or presented by the proper party or parties;

          (ii) The Trustee may consult with counsel and any Opinion of Counsel
     shall be full and complete authorization and protection in respect of any
     action taken or suffered or omitted by it hereunder in good faith and in
     accordance with such Opinion of Counsel;

          (iii) The Trustee shall not be under any obligation to exercise any of
     the trusts or powers vested in it by this Agreement or to institute,
     conduct or defend any litigation hereunder or in relation hereto at the
     request, order or direction of any of the Certificateholders or the NIMS
     Insurer, pursuant to the provisions of this Agreement, unless such
     Certificateholders or the NIMS Insurer, as applicable, shall have offered
     to the Trustee security or indemnity reasonably satisfactory to it against
     the costs, expenses and liabilities which may be incurred therein or
     thereby; nothing contained herein shall, however, relieve the Trustee of
     the obligation, upon the occurrence of a Master Servicer Event of Default
     (which has not been cured or waived), to exercise such of the rights and
     powers vested in it by this Agreement, and to use the same degree of care
     and skill in their exercise as a prudent person would exercise or use under
     the circumstances in the conduct of such person's own affairs;

          (iv) The Trustee shall not be personally liable for any action taken,
     suffered or omitted by it in good faith and believed by it to be authorized
     or within the discretion or rights or powers conferred upon it by this
     Agreement;

          (v) Prior to the occurrence of a Master Servicer Event of Default
     hereunder and after the curing of all Master Servicer Events of Default
     which may have occurred, the Trustee shall not be bound to make any
     investigation into the facts or matters stated in any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     consent, order, approval, bond or other paper or document, unless requested
     in writing to do so by the NIMS Insurer or the Holders of Certificates
     entitled to at least 25% of the Voting Rights; provided, however, that if
     the payment within a reasonable time to the Trustee of the costs, expenses

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     or liabilities likely to be incurred by it in the making of such
     investigation is, in the opinion of the Trustee not reasonably assured to
     the Trustee by such Certificateholders, the Trustee may require reasonable
     indemnity against such expense, or liability from such Certificateholders
     or the NIMS Insurer as a condition to taking any such action;

          (vi) The Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents or
     attorneys; and

          (vii) The Trustee shall not be personally liable for any loss
     resulting from the investment of funds held in the Collection Account, the
     Escrow Account or the REO Account made at the direction of the Master
     Servicer pursuant to Section 3.06.

          (b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in the name of the Trustee for the
benefit of all the Holders of such Certificates, subject to the provisions of
this Agreement.

          (c) The Trustee is hereby directed by the Depositor to execute and
deliver the PMI Policy and the Cap Contracts on behalf of the Trust Fund in the
respective forms presented to it by the Depositor. Every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall apply to the Trustee's execution of the Cap
Contracts, and the performance of its duties and satisfaction of its obligations
thereunder.

          SECTION 8.03. The Trustee Not Liable for Certificates or Mortgage
                        Loans.

          The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Certificate Registrar on the
Certificates, the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 8.13) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement (other than as specifically set forth
with respect to such party in Section 8.13) or of the Certificates (other than
the signature of the Trustee and authentication of the Certificate Registrar on
the Certificates) or of any Mortgage Loan or related document. The Trustee shall
not be accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Collection Account
by the Master Servicer, other than any funds held by or on behalf of the Trustee
in accordance with Section 3.04.

          SECTION 8.04. Trustee May Own Certificates.

          The Trustee in its individual capacity or any other capacity may
become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.

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          SECTION 8.05. Trustee's Fees and Expenses.

          (a) The Trustee shall withdraw from the Distribution Account on each
Distribution Date and pay to itself the Trustee Fee and, to the extent that the
funds therein are at any time insufficient for such purpose, the Depositor shall
pay such fees. The Trustee, or any director, officer, employee or agent of the
Trustee shall be indemnified by REMIC I and held harmless against any loss,
liability or expense (not including expenses, disbursements and advances
incurred or made by the Trustee including the compensation and the expenses and
disbursements of its agents and counsel, in the ordinary course of the Trustee's
performance in accordance with the provisions of this Agreement) incurred by the
Trustee in connection with any claim or legal action or any pending or
threatened claim or legal action arising out of or in connection with the
acceptance or administration of its obligations and duties under this Agreement,
other than any loss, liability or expense (i) resulting from a breach of the
Master Servicer's obligations and duties under this Agreement and the Mortgage
Loans (for which the Master Servicer shall indemnify pursuant to Section
8.05(b)), (ii) that constitutes a specific liability of the Trustee pursuant to
Section 10.01(c) or (iii) any loss, liability or expense incurred by reason of
its willful misfeasance, bad faith or negligence in the performance of its
duties hereunder or by reason of reckless disregard of its obligations and
duties hereunder or as a result of a breach of its obligations under Article X
hereof. Any amounts payable to the Trustee, or any director, officer, employee
or agent of the Trustee in respect of the indemnification provided by this
paragraph (a), or pursuant to any other right of reimbursement from the Trust
Fund that the Trustee, or any director, officer, employee or agent of the
Trustee may have hereunder in its capacity as such, may be withdrawn by the
Trustee from the Distribution Account at any time.

          (b) The Master Servicer agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense resulting from a breach of
the Master Servicer's obligations and duties under this Agreement. Such
indemnity shall survive the termination or discharge of this Agreement and the
resignation or removal of the Trustee. Any payment hereunder made by the Master
Servicer to the Trustee shall be from the Master Servicer's own funds, without
reimbursement from the Trust Fund therefor.

          (c) The Master Servicer shall pay any annual rating agency fees of the
Rating Agencies for ongoing surveillance from its own funds without right of
reimbursement.

          SECTION 8.06. Eligibility Requirements for Trustee.

          The Trustee hereunder shall at all times be a corporation or an
association (other than the Depositor, the Originator, the Master Servicer or
any Affiliate of the foregoing) organized and doing business under the laws of
any state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this

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Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.07.

          SECTION 8.07. Resignation and Removal of the Trustee.

          The Trustee may at any time resign and be discharged from the trust
hereby created by giving written notice thereof to the Depositor, the NIMS
Insurer, the Master Servicer and the Certificateholders. Upon receiving such
notice of resignation of the Trustee, the Depositor shall promptly appoint a
successor trustee acceptable to the NIMS Insurer by written instrument, in
duplicate, which instrument shall be delivered to the resigning Trustee and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee and the Master Servicer by the Depositor. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.

          If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor or the NIMS Insurer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its respective property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its respective property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or the NIMS Insurer may remove
the Trustee and appoint a successor trustee acceptable to the NIMS Insurer by
written instrument, in duplicate, which instrument shall be delivered to the
Trustee so removed and to the successor trustee. A copy of such instrument shall
be delivered to the Certificateholders and the Master Servicer by the Depositor.

          The Holders of Certificates entitled to at least 51% of the Voting
Rights (or the NIMS Insurer upon failure of the Trustee to perform its
obligations hereunder) may at any time remove the Trustee and appoint a
successor trustee acceptable to the NIMS Insurer by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Depositor, one complete set to the Trustee so removed and one complete set to
the successor so appointed. A copy of such instrument shall be delivered to the
Certificateholders and the Master Servicer by the Depositor.

          Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

          SECTION 8.08. Successor Trustee.

          Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor, the NIMS Insurer and to its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Mortgage Files and related documents and statements,

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as well as all moneys, held by it hereunder (other than any Mortgage Files at
the time held by a Custodian, which Custodian shall become the agent of any
successor trustee hereunder), and the Depositor and the predecessor trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor trustee all such rights, powers, duties and obligations.

          No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by either Rating Agency, as evidenced by a letter from each Rating Agency.

          Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.

          SECTION 8.09. Merger or Consolidation of Trustee.

          Any corporation or association into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation or association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or association succeeding to the business
of the Trustee shall be the successor of the Trustee hereunder, provided such
corporation or association shall be eligible under the provisions of Section
8.06, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.

          SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.

          Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of REMIC I or property securing the same may at the time be located, the Master
Servicer and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the NIMS Insurer to act as co-trustee or co-trustees, jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of
REMIC I, and to vest in such Person or Persons, in such capacity, such title to
REMIC I, or any part thereof, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. Any such
co-trustee or separate trustee shall be subject to the written approval of the
Master Servicer and the NIMS Insurer. If the Master Servicer and the NIMS
Insurer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Master Servicer Event of
Default shall have occurred and be continuing, the Trustee alone shall have the
power to make such appointment. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.

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          In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee (whether as
Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of title to
REMIC I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.

          Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trust conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Depositor, the Master Servicer and the NIMS Insurer.

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

          SECTION 8.11. Appointment of Custodians.

          The Trustee may, with the consent of the Depositor and the Master
Servicer appoint one or more Custodians to hold all or a portion of the Mortgage
Files as agent for the Trustee, by entering into a Custodial Agreement. The
appointment of any Custodian may at any time be terminated and a substitute
Custodian appointed therefor upon the reasonable request of the Master Servicer
to the Trustee, the consent to which shall not be unreasonably withheld. The
Trustee shall pay any and all fees and expenses of any Custodian in accordance
with each Custodial Agreement (provided that if expenses of the kind that would
be reimbursable to the Trustee pursuant to Section 8.05 if incurred by the
Trustee are incurred by the Custodian, the Trustee shall be entitled to
reimbursement under Section 8.05 for such kind of expenses to the extent the
Trustee has paid such expenses on behalf of the Custodian or for which the
Trustee has reimbursed the Custodian). The Trustee initially appoints the
Custodian as Custodian, and the Depositor and the Master Servicer consent to
such appointment. Subject to Article VIII hereof, the Trustee agrees to comply
with the terms of each Custodial Agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders having an interest in any Mortgage File held by such
Custodian. Each Custodian shall be a depository institution or trust company
subject to supervision by federal or state authority, shall have combined
capital and surplus of at least $10,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage

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File. Each Custodial Agreement may be amended only as provided in Section 11.01.
In no event shall the appointment of any Custodian pursuant to a Custodial
Agreement diminish the obligations of the Trustee hereunder.

          SECTION 8.12. Appointment of Office or Agency.

          The Trustee will designate an office or agency in the City of New York
where the Certificates may be surrendered for registration of transfer or
exchange, and presented for final distribution, and where notices and demands to
or upon the Trustee in respect of the Certificates and this Agreement may be
delivered. As of the Closing Date, the Trustee designates the office of its
agent located c/o DTC Transfer Agent Services, 55 Water Street, Jeanette Park
Entrance, New York, NY 10041 for such purposes.

          SECTION 8.13. Representations and Warranties of the Trustee.

          The Trustee hereby represents and warrants, to the Master Servicer and
the Depositor, as of the Closing Date, that:

          (i) It is a national banking association duly organized, validly
     existing and in good standing under the laws of the United States.

          (ii) The execution and delivery of this Agreement by it, and the
     performance and compliance with the terms of this Agreement by it, will not
     violate its charter or bylaws or constitute a default (or an event which,
     with notice or lapse of time, or both, would constitute a default) under,
     or result in the breach of, any material agreement or other instrument to
     which it is a party or which is applicable to it or any of its assets.

          (iii) It has the full power and authority to enter into and consummate
     all transactions contemplated by this Agreement, has duly authorized the
     execution, delivery and performance of this Agreement, and has duly
     executed and delivered this Agreement.

          (iv) This Agreement, assuming due authorization, execution and
     delivery by the other parties hereto, constitutes a valid, legal and
     binding obligation of it, enforceable against it in accordance with the
     terms hereof, subject to (A) applicable bankruptcy, insolvency,
     receivership, reorganization, moratorium and other laws affecting the
     enforcement of creditors' rights generally, and (B) general principles of
     equity, regardless of whether such enforcement is considered in a
     proceeding in equity or at law.

          (v) It is not in violation of, and its execution and delivery of this
     Agreement and its performance and compliance with the terms of this
     Agreement will not constitute a violation of, any law, any order or decree
     of any court or arbiter, or any order, regulation or demand of any federal,
     state or local governmental or regulatory authority, which violation, in
     its good faith and reasonable judgment, is likely to affect materially and
     adversely either the ability of it to perform its obligations under this
     Agreement or its financial condition.

          (vi) No litigation is pending or, to the best knowledge, threatened
     against it which would prohibit it from entering into this Agreement or, in
     its good faith reasonable judgment,

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     is likely to materially and adversely affect either its ability to perform
     its obligations under this Agreement or its financial condition.

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                                   ARTICLE IX

                                   TERMINATION

          SECTION 9.01 Termination Upon Repurchase or Liquidation of All
                       Mortgage Loans.

          (a) Subject to Section 9.02, the respective obligations and
responsibilities under this Agreement of the Depositor, the Master Servicer and
the Trustee (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments in respect of the REMIC I Regular Interests, the REMIC
II Regular Interests or the Classes of Certificates as hereinafter set forth)
shall terminate upon payment to the Certificateholders and the deposit of all
amounts held by or on behalf of the Trustee and required hereunder to be so paid
or deposited on the Distribution Date coinciding with or following the earlier
to occur of (i) the purchase by the Terminator (as defined below) of all
Mortgage Loans and each REO Property remaining in REMIC I and (ii) the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or REO Property remaining in REMIC I; provided, however, that in
no event shall the trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. The purchase by the Terminator of all Mortgage Loans
and each REO Property remaining in REMIC I shall be at a price (the "Termination
Price") equal to the aggregate fair market value of all of the assets of REMIC I
(as determined by the Terminator and the Trustee, as of the close of business on
the third Business Day next preceding the date upon which notice of any such
termination is furnished to Certificateholders pursuant to the third paragraph
of this Section 9.01); provided, however, such option may only be exercised if
(a) the Termination Price is sufficient to pay all interest accrued on, as well
as amounts necessary to retire the Principal Balance of, each class of notes
issued pursuant to the Indenture and any amounts owed to the NIMS Insurer at the
time the option is exercised, and (b) the fair market value of the assets of
REMIC I described above is at least equal to the Stated Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period) and the appraised value of the REO Properties.

          (b) The Master Servicer (or if the Master Servicer fails to exercise
such right, the NIMS Insurer) shall have the right (the party exercising such
right, the "Terminator"), to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) of the preceding paragraph
no later than the Determination Date in the month immediately preceding the
Distribution Date on which the Certificates will be retired; provided, however,
that the Terminator may elect to purchase all of the Mortgage Loans and each REO
Property remaining in REMIC I pursuant to clause (i) above only (A) if the
aggregate Stated Principal Balance of the Mortgage Loans and each REO Property
remaining in the Trust Fund at the time of such election is less than 10% of the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date
and (B) if the Terminator is the Master Servicer and is an affiliate of the
Originator, the Master Servicer shall have delivered to the Trustee and the NIMS
Insurer a written certification that the burdens of servicing the Mortgage Loans
and REO Properties remaining in REMIC I exceed the benefits of the Servicing
Fees that would be realized by the Master Servicer if it continued to service

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such assets on behalf of the Trust Fund. By acceptance of the Residual
Certificates, the Holders of the Residual Certificates agree, in connection with
any termination hereunder, to assign and transfer any amounts in excess of par,
and to the extent received in respect of such termination, to pay any such
amounts to the Holders of the Class CE Certificates.

          (c) Notice of the liquidation of the REMIC I Regular Interests shall
be given promptly by the Trustee by letter to Certificateholders mailed (a) in
the event such notice is given in connection with the purchase of the Mortgage
Loans and each REO Property by the Terminator, not earlier than the 15th day and
not later than the 25th day of the month next preceding the month of the final
distribution on the Certificates or (b) otherwise during the month of such final
distribution on or before the Determination Date in such month, in each case
specifying (i) the Distribution Date upon which the Trust Fund will terminate
and final payment in respect of the REMIC I Regular Interests, the REMIC II
Regular Interests and the Certificates will be made upon presentation and
surrender of the related Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment, (iii) that no interest
shall accrue in respect of the REMIC I Regular Interests, the REMIC II Regular
Interests or the Certificates from and after the Interest Accrual Period
relating to the final Distribution Date therefor and (iv) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Trustee. The Trustee shall give such notice to the Certificate Registrar at
the time such notice is given to Certificateholders. In the event such notice is
given in connection with the purchase of all of the Mortgage Loans and each REO
Property remaining in REMIC I by the Terminator, the Terminator shall deliver to
the Trustee for deposit in the Distribution Account not later than the last
Business Day preceding the final Distribution Date on the Certificates an amount
in immediately available funds equal to the above-described purchase price. Upon
certification to the Trustee by a Servicing Officer of the making of such final
deposit, the Trustee shall promptly release or cause to be released to the
Terminator the Mortgage Files for the remaining Mortgage Loans, and the Trustee
shall execute all assignments, endorsements and other instruments necessary to
effectuate such transfer.

          (d) Upon presentation of the Certificates by the Certificateholders on
the final Distribution Date, the Trustee shall distribute to each
Certificateholder so presenting and surrendering its Certificates the amount
otherwise distributable on such Distribution Date in accordance with Section
4.01 in respect of the Certificates so presented and surrendered. Any funds not
distributed to any Holder or Holders of Certificates being retired on such
Distribution Date because of the failure of such Holder or Holders to tender
their Certificates shall, on such date, be set aside and held in trust by the
Trustee and credited to the account of the appropriate non-tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 9.01 shall not have been surrendered for cancellation within six months
after the time specified in such notice, the Trustee shall mail a second notice
to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final distribution with
respect thereto. If within one year after the second notice all such
Certificates shall not have been surrendered for cancellation, the Trustee
shall, directly or through an agent, mail a final notice to remaining related
non-tendering Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the trust funds.
If within one year after the final notice any such Certificates shall not have
been surrendered for cancellation, the Trustee shall pay to UBS Warburg LLC all
such amounts, and all rights of non-tendering Certificateholders in or to such

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amounts shall thereupon cease. No interest shall accrue or be payable to any
Certificateholder on any amount held in trust by the Trustee as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01.

          Immediately following the deposit of funds in trust hereunder in
respect of the Certificates, the Trust Fund shall terminate.

          SECTION 9.02 Additional Termination Requirements.

          (a) In the event that the Terminator purchases all the Mortgage Loans
and each REO Property or the final payment on or other liquidation of the last
Mortgage Loan or REO Property remaining in REMIC I pursuant to Section 9.01, the
Trust Fund shall be terminated in accordance with the following additional
requirements:

          (i) The Trustee shall specify the first day in the 90-day liquidation
     period in a statement attached to each Trust REMIC's final Tax Return
     pursuant to Treasury regulation Section 1.860F-1 and shall satisfy all
     requirements of a qualified liquidation under Section 860F of the Code and
     any regulations thereunder, as evidenced by an Opinion of Counsel obtained
     at the expense of the Terminator;

          (ii) During such 90-day liquidation period, and at or prior to the
     time of making of the final payment on the Certificates, the Trustee shall
     sell all of the assets of REMIC I to the Terminator for cash; and

          (iii) At the time of the making of the final payment on the
     Certificates, the Trustee shall distribute or credit, or cause to be
     distributed or credited, to the Holders of the Residual Certificates all
     cash on hand in the Trust Fund (other than cash retained to meet claims),
     and the Trust Fund shall terminate at that time.

          (b) At the expense of the applicable Terminator (or in the event of
termination under Section 9.01(a)(ii), at the expense of the Trustee), the
Trustee shall prepare or cause to be prepared the documentation required in
connection with the adoption of a plan of liquidation of each Trust REMIC
pursuant to this Section 9.02.

          (c) By their acceptance of Certificates, the Holders thereof hereby
agree to authorize the Trustee to specify the 90-day liquidation period for each
Trust REMIC which authorization shall be binding upon all successor
Certificateholders.

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                                    ARTICLE X

                                REMIC PROVISIONS

          SECTION 10.01. REMIC Administration.

          (a) The Trustee shall elect to treat each Trust REMIC as a REMIC under
the Code and, if necessary, under applicable state law. Each such election will
be made by the Trustee on Form 1066 or other appropriate federal tax or
information return or any appropriate state return for the taxable year ending
on the last day of the calendar year in which the Certificates are issued. For
the purposes of the REMIC election in respect of REMIC I, the REMIC I Regular
Interests shall be designated as the Regular Interests in REMIC I and the Class
R-I Interest shall be designated as the Residual Interest in REMIC I. The Class
A Certificates, the Mezzanine Certificates, the Class CE Certificates and the
Class P Certificates shall be designated as the Regular Interests in REMIC II
and the Class R-II Interest shall be designated as the Residual Interest in
REMIC II. The Trustee shall permit the creation of any "interests" in any Trust
REMIC (within the meaning of Section 860G of the Code) other than the REMIC I
Regular Interests and the interests represented by the Certificates.

          (b) The Closing Date is hereby designated as the "Startup Day" of each
Trust REMIC within the meaning of Section 860G(a)(9) of the Code.

          (c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
caused by the Trustee (including, but not limited to, any professional fees or
any administrative or judicial proceedings with respect to any Trust REMIC that
involve the Internal Revenue Service or state tax authorities), other than the
expense of obtaining any tax related Opinion of Counsel except as specified
herein. The Trustee, as agent for each Trust REMIC's tax matters person, shall
(i) act on behalf of the Trust Fund in relation to any tax matter or controversy
involving any Trust REMIC and (ii) represent the Trust Fund in any
administrative or judicial proceeding relating to an examination or audit by any
governmental taxing authority with respect thereto. The holder of the largest
Percentage Interest of each Class of Residual Certificates shall be designated,
in the manner provided under Treasury regulations section 1.860F-4(d) and
Treasury regulations section 301.6231(a)(7)-1, as the tax matters person of the
related REMIC created hereunder. By their acceptance thereof, the holder of the
largest Percentage Interest of the Residual Certificates hereby agrees to
irrevocably appoint the Trustee or an Affiliate as its agent to perform all of
the duties of the tax matters person for the Trust Fund.

          (d) The Trustee shall prepare, sign and file all of the Tax Returns in
respect of each REMIC created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the Trust Fund as is
in its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article.

          (e) The Trustee shall perform on behalf of each Trust REMIC all
reporting and other tax compliance duties that are the responsibility of such
REMIC under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local

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taxing authority. Among its other duties, as required by the Code, the REMIC
Provisions or other such compliance guidance, the Trustee shall provide (i) to
any Transferor of a Residual Certificate such information as is necessary for
the application of any tax relating to the transfer of a Residual Certificate to
any Person who is not a Permitted Transferee, (ii) to the Certificateholders
such information or reports as are required by the Code or the REMIC Provisions
including reports relating to interest, original issue discount and market
discount or premium (using the Prepayment Assumption as required) and (iii) to
the Internal Revenue Service the name, title, address and telephone number of
the person who will serve as the representative of each Trust REMIC. The Master
Servicer shall provide on a timely basis to the Trustee such information with
respect to the assets of the Trust Fund, including, without limitation, the
Mortgage Loans, as is in its possession and reasonably required by the Trustee
to enable each of them to perform their respective obligations under this
subsection. In addition, the Depositor shall provide or cause to be provided to
the Trustee, within ten (10) days after the Closing Date, all information or
data that the Trustee reasonably determines to be relevant for tax purposes as
to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.

          (f) The Trustee shall take such action and shall cause each REMIC
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions (and the
Master Servicer shall assist it, to the extent reasonably requested by it). The
Trustee shall not take any action, cause the Trust Fund to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of any Trust REMIC as a REMIC or (ii) result in the imposition of a tax
upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "Adverse REMIC Event") unless the Trustee and the NIMS Insurer have
received an Opinion of Counsel, addressed to the Trustee (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee)
to the effect that the contemplated action will not, with respect to any Trust
REMIC, endanger such status or result in the imposition of such a tax, nor shall
the Master Servicer take or fail to take any action (whether or not authorized
hereunder) as to which the Trustee and the NIMS Insurer has advised it in
writing that it has received an Opinion of Counsel to the effect that an Adverse
REMIC Event could occur with respect to such action. In addition, prior to
taking any action with respect to any Trust REMIC or the respective assets of
each, or causing any Trust REMIC to take any action, which is not contemplated
under the terms of this Agreement, the Master Servicer will consult with the
Trustee, the NIMS Insurer or its designee, in writing, with respect to whether
such action could cause an Adverse REMIC Event to occur with respect to any
Trust REMIC, and the Master Servicer shall not take any such action or cause any
Trust REMIC to take any such action as to which the Trustee or the NIMS Insurer
has advised it in writing that an Adverse REMIC Event could occur. The Trustee
or the NIMS Insurer may consult with counsel to make such written advice, and
the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee. At all times as may be required by the Code, the Master Servicer
(in its capacity as Originator) on behalf of the Trustee will ensure that
substantially all of the assets of any Trust REMIC will consist of "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.

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<PAGE>

          (g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Trustee pursuant to Section 10.03 hereof,
if such tax arises out of or results from a breach by the Trustee of any of its
obligations under this Article X, (ii) to the Master Servicer pursuant to
Section 10.03 hereof, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article III or this Article X,
or otherwise (iii) against amounts on deposit in the Distribution Account and
shall be paid by withdrawal therefrom.

          (h) On or before April 15th of each calendar year, commencing April
15, 2004, the Trustee shall deliver to the Master Servicer, the NIMS Insurer and
each Rating Agency a Certificate from a Responsible Officer of the Trustee
stating, without regard to any action taken by any party other than the Trustee,
the Trustee's compliance with this Article X.

          (i) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to each Trust REMIC on a calendar year and on an
accrual basis. The Trustee will apply for an Employer Identification Number for
the Trust Fund from the Internal Revenue Service via a Form SS-4 or such other
form as is appropriate.

          (j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any Trust REMIC other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the Trust Fund will not cause the related REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding or
subject such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.

          (k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which any Trust REMIC will receive a fee or other compensation
for services nor permit any such REMIC to receive any income from assets other
than the Mortgage Pool which are deemed to constitute "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code.

          SECTION 10.02. Prohibited Transactions and Activities.

          None of the Depositor, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of REMIC I, (iii) the termination of REMIC I
pursuant to Article IX of this Agreement, (iv) a substitution pursuant to
Article II of this Agreement or (v) a purchase of Mortgage Loans pursuant to
Article II or III of this Agreement), nor acquire any assets for any Trust REMIC
(other than REO Property acquired in respect of a defaulted Mortgage Loan), nor
sell or dispose of any investments in the Collection Account or the Distribution
Account for gain, nor accept any contributions to any Trust REMIC after the
Closing Date (other than a Qualified Substitute Mortgage Loan delivered in
accordance with Section 2.03), unless it has received an

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Opinion of Counsel, addressed to the Trustee and the NIMS Insurer (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution will not (a)
affect adversely the status of any Trust REMIC as a REMIC or (b) cause any Trust
REMIC to be subject to a tax on "prohibited transactions" or "contributions"
pursuant to the REMIC Provisions.

          SECTION 10.03. Master Servicer and Trustee Indemnification.

          (a) The Trustee agrees to indemnify the Trust Fund, the NIMS Insurer,
the Depositor and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Depositor or the Master Servicer, caused solely by the Trustee's
failure to act in accordance with its standard of care set forth in this Article
X or any state, local or franchise taxes imposed upon the Trust as a result of
the location of the Trustee.

          (b) The Master Servicer agrees to indemnify the Trust Fund, the NIMS
Insurer, the Depositor and the Trustee for any taxes and costs including,
without limitation, any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor or the Trustee, as a result of a breach of the Master
Servicer's covenants set forth in Article III or this Article X or any state,
local or franchise taxes imposed upon the Trust as a result of the location of
the Master Servicer or any subservicer.

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<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

          SECTION 11.01. Amendment.

          This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Master Servicer, the Trustee and, if applicable, the
Custodian with the consent of the NIMS Insurer and without the consent of any of
the Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct,
modify or supplement any provisions herein (including to give effect to the
expectations of Certificateholders), or in any Custodial Agreement, or (iii) to
make any other provisions with respect to matters or questions arising under
this Agreement or in any Custodial Agreement which shall not be inconsistent
with the provisions of this Agreement or such Custodial Agreement, provided that
such action shall not adversely affect in any material respect the interests of
any Certificateholder, as evidenced by either (i) an Opinion of Counsel
delivered to the Master Servicer and the Trustee to such effect or (ii)
confirmation from the Rating Agencies that such amendment will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates.
No amendment shall be deemed to adversely affect in any material respect the
interests of any Certificateholder who shall have consented thereto, and no
Opinion of Counsel shall be required to address the effect of any such amendment
on any such consenting Certificateholder.

          This Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the NIMS Insurer and the
Trustee with the consent of the NIMS Insurer and the Holders of Certificates
entitled to at least 66% of the Voting Rights for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or any Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments
received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates (as evidenced by either (i) an Opinion of Counsel
delivered to the Trustee or (ii) written notice to the Depositor, the Servicer
and the Trustee from the Rating Agencies that such action will not result in the
reduction or withdrawal of the rating of any outstanding Class of Certificates
with respect to which it is a Rating Agency) in a manner other than as described
in (i), or (iii) modify the consents required by the immediately preceding
clauses (i) and (ii) without the consent of the Holders of all Certificates then
outstanding. Notwithstanding any other provision of this Agreement, for purposes
of the giving or withholding of consents pursuant to this Section 11.01,
Certificates registered in the name of the Depositor or the Master Servicer or
any Affiliate thereof shall be entitled to Voting Rights with respect to matters
affecting such Certificates.

          Notwithstanding any contrary provision of this Agreement, neither the
Trustee nor the NIMS Insurer shall consent to any amendment to this Agreement
unless it shall have first received an Opinion of Counsel satisfactory to the
NIMS Insurer to the effect that such amendment will not result in the imposition
of any tax on any Trust REMIC pursuant to the REMIC Provisions or cause any
Trust REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding.

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<PAGE>

          Notwithstanding any of the other provisions of this Section 11.01,
none of the Depositor, the Master Servicer or the Trustee shall enter into any
amendment of this Agreement that would significantly change the permitted
activities of the Trust Fund without the consent of the NIMS Insurer and the
holders of Certificates that represent more than 50.00% of the aggregate
Certificate Principal Balance of all Certificates.

          Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder.

          It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

          The cost of any Opinion of Counsel to be delivered pursuant to this
Section 11.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee.

          The Trustee may, but shall not be obligated to enter into any
amendment pursuant to this Section that affects its respective rights, duties
and immunities under this Agreement or otherwise.

          SECTION 11.02. Recordation of Agreement; Counterparts.

          To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Trustee accompanied by an Opinion of Counsel to the effect that
such recordation materially and beneficially affects the interests of the
Certificateholders.

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

          SECTION 11.03. Limitation on Rights of Certificateholders.

          The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

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<PAGE>

          No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of any of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision hereof.

          No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless (i) such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and (ii) the Holders of
Certificates entitled to at least 25% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
the name of the Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 15 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

          SECTION 11.04. Governing Law.

          This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws excluding the choice
of laws provisions therein.

          SECTION 11.05. Notices.

          All directions, demands, requests, authorizations and notices
hereunder shall be in writing and shall be deemed to have been duly given when
received if personally delivered at or mailed by first class mail, postage
prepaid, or by express delivery service, facsimile, electronic mail or delivered
in any other manner specified herein, to (a) in the case of the Depositor, 1100
Town & Country Road, Suite 1100, Orange, California 92868, Attention: Capital
Markets (telecopy number (714) 245-0198), or such other address or telecopy
number as may hereafter be furnished to the Master Servicer, the NIMS Insurer
and the Trustee in writing by the Depositor, (b) in the case of the Master
Servicer, 1100 Town & Country Road, 11th Floor, Orange, California 92868,
Attention: General Counsel (telecopy number: (714) 564-9639), or such other
address or telecopy number as may hereafter be furnished to the Trustee, the
NIMS Insurer and the Depositor in writing by the Master Servicer, (c) in the
case of the Trustee, Deutsche Bank National Trust Company, 1761 East St. Andrew
Place, Santa Ana, CA 92705-4934, Attention: Trust Administration-AQ03A1
(telecopy

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<PAGE>

number: (714) 247-6009), or such other address or telecopy number as may
hereafter be furnished to the Master Servicer, the NIMS Insurer and the
Depositor in writing by the Trustee and (d) in the case of the NIMS Insurer,
such address furnished to the Depositor, the Master Servicer and the Trustee in
writing by the NIMS Insurer. Any notice required or permitted to be given to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given when mailed, whether or not the
Certificateholder receives such notice. A copy of any notice required to be
telecopied hereunder also shall be mailed to the appropriate party in the manner
set forth above.

          SECTION 11.06. Severability of Provisions.

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

          SECTION 11.07. Notice to Rating Agencies and the NIMS Insurer.

          The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies and the NIMS Insurer with respect to each of the following
of which it has actual knowledge:

          1. Any material change or amendment to this Agreement;

          2. The occurrence of any Master Servicer Event of Default that has not
     been cured or waived;

          3. The resignation or termination of the Master Servicer or the
     Trustee;

          4. The repurchase or substitution of Mortgage Loans pursuant to or as
     contemplated by Section 2.03;

          5. The final payment to the Holders of any Class of Certificates;

          6. Any change in the location of the Collection Account or the
     Distribution Account;

          7. Any event that would result in the inability of the Trustee, were
     it to succeed as Master Servicer, to make advances regarding delinquent
     Mortgage Loans; and

          8. The filing of any claim under the Master Servicer's blanket bond
     and errors and omissions insurance policy required by Section 3.09 or the
     cancellation or material modification of coverage under any such
     instrument.

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<PAGE>

          In addition, the Trustee shall promptly furnish to each Rating Agency
and the NIMS Insurer copies of each report to Certificateholders described in
Section 4.02 and the Master Servicer, as required pursuant to Section 3.19 and
Section 3.20, shall promptly furnish to each Rating Agency copies of the
following:

          1. Each annual statement as to compliance described in Section 3.19;
     and

          2. Each annual independent public accountants' servicing report
     described in Section 3.20.

          Any such notice pursuant to this Section 11.07 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service to Moody's
Investors Service, 99 Church Street, New York, New York 10007, to Fitch Ratings,
1 State Street Plaza, New York, New York 10004 and to Standard & Poor's, a
division of the McGraw-Hill Companies, Inc., 25 Broadway, New York, New York
10004, or such other addresses as the Rating Agencies may designate in writing
to the parties hereto.

          SECTION 11.08. Article and Section References.

          All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.

          SECTION 11.09. Grant of Security Interest.

          It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Depositor to the Trustee be, and be construed as, a
sale of the Mortgage Loans by the Depositor and not a pledge of the Mortgage
Loans by the Depositor to secure a debt or other obligation of the Depositor or
the Originator. However, in the event that, notwithstanding the aforementioned
intent of the parties, the Mortgage Loans are held to be property of the
Depositor or the Originator, then, (a) it is the express intent of the parties
that such conveyance be deemed a pledge of the Mortgage Loans by the Depositor
to the Trustee to secure a debt or other obligation of the Depositor or the
Originator and (b)(1) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
as in effect from time to time in the State of New York; (2) the conveyance
provided for in Section 2.01 hereof shall be deemed to be a grant by the
Originator and the Depositor to the Trustee of a security interest in all of the
Originator's and the Depositor's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account and the
Distribution Account, whether in the form of cash, instruments, securities or
other property; (3) the obligations secured by such security agreement shall be
deemed to be all of the Depositor's obligations under this Agreement, including
the obligation to provide to the Certificateholders the benefits of this
Agreement relating to the Mortgage Loans and the Trust Fund; and (4)
notifications to persons holding such property, and acknowledgments, receipts or
confirmations from persons holding such property, shall be deemed notifications
to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such

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<PAGE>

security interest under applicable law. Accordingly, the Depositor hereby grants
to the Trustee a security interest in the Mortgage Loans and all other property
described in clause (2) of the preceding sentence, for the purpose of securing
to the Trustee the performance by the Depositor of the obliga tions described in
clause (3) of the preceding sentence. Notwithstanding the foregoing, the parties
hereto intend the conveyance pursuant to Section 2.01 and the transfer pursuant
to the Mortgage Loan Purchase Agreement to be a true, absolute and unconditional
sale of the Mortgage Loans and assets constituting the Trust Fund by the
Depositor to the Trustee.

          SECTION 11.10 Third Party Rights.

          The NIMS Insurer shall be deemed a third-party beneficiary of this
Agreement to the same extent as if it were a party hereto, and shall have the
right to enforce the provisions of this Agreement.

          SECTION 11.11 NIMS Insurer's Rights.

          Notwithstanding anything to the contrary anywhere in this Agreement,
all rights of the NIMS Insurer hereunder (i) shall not be operable whenever an
Insurer Default or an Insurer Insolvency Event and a Backup Insurer Default (as
defined in the Indenture) shall have occurred and be continuing and (ii) except
in the case of any right to indemnification hereunder shall permanently cease to
be operable upon the later to occur of (A) the payment in full of the NIM Notes
as provided in the Indenture and (B) the payment in full to the NIMS Insurer of
any amounts owed to the NIMS Insurer as provided in the Indenture.

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<PAGE>

          IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized, in each case as of the day and year first above
written.

                                       AMERIQUEST MORTGAGE SECURITIES INC.,
                                        as Depositor

                                       By:      /s/ John P. Grazer
                                            -----------------------------------
                                       Name:        John P. Grazer
                                       Title:       CFO

                                       AMERIQUEST MORTGAGE COMPANY,
                                         as Master Servicer

                                       By:      /s/ John P. Grazer
                                            -----------------------------------
                                       Name:        John P. Grazer
                                       Title:       CFO/EVP

                                       DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                        as Trustee

                                       By:      /s/ Ronaldo Reyes
                                            -----------------------------------
                                       Name:        Ronaldo Reyes
                                       Title:       Associate

                                       By:      /s/ James F. Noriega
                                            -----------------------------------
                                       Name:        James F. Noriega
                                       Title:       Associate

                                       147

<PAGE>

STATE OF CALIFORNIA          )
                             ) ss.:
COUNTY OF ORANGE             )

          On the ___ day of January 2003, before me, a notary public in and for
said State, personally appeared ____________, known to me to be an
________________ of Ameriquest Mortgage Securities Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ___________________________________
                                                       Notary Public

[Notarial Seal]

                                       148

<PAGE>

STATE OF CALIFORNIA          )
                             ) ss.:
COUNTY OF ORANGE             )

          On the __th day of January 2003, before me, a notary public in and for
said State, personally appeared __________________, known to me to be a
_________________ of Ameriquest Mortgage Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                              __________________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>

STATE OF CALIFORNIA              )
                                 ) ss.:
COUNTY OF                        )

          On the ___ day of January 2003, before me, a notary public in and for
said State, personally appeared _________________, known to me to be an
____________________ of Deutsche Bank National Trust Company, one of the
entities that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such entity executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                              __________________________________
                                                         Notary Public

[Notarial Seal]

<PAGE>
                                   EXHIBIT A-1

                          FORM OF CLASS A-1 CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

Series 2003-AR1, Class A-1
                                              Aggregate Certificate Principal
                                              Balance of the Class A-1
                                              Certificates as of the Issue Date:
Pass-Through Rate: Variable                   $________________

Date of Pooling and Servicing Agreement       Denomination:  $_________________
and Cut-off Date: January 1, 2003
                                              Master Servicer:  Ameriquest
First Distribution Date: February 25, 2003    Mortgage Company

No. 1                                         Trustee:  Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                              CUSIP: [__________]

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                      A-1-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class A-1 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class A-1 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-1-2

<PAGE>

          The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall be the
lesser of (x) the Formula Rate for such Distribution Date and (y) the Net WAC
Pass-Through Rate for such Distribution Date. For any Distribution Date and this
Certificate, the Formula Rate is the lesser of (i) One-Month LIBOR plus the
Certificate Margin and (ii) the Maximum Cap Rate. The Certificate Margin for
this Certificate is with respect to this Certificate [______]% in the case of
each Distribution Date through and including the Distribution Date on which the
aggregate principal balance of the Mortgage Loans (and properties acquired in
respect thereof) remaining in the Trust is reduced to less than 10% of the
aggregate principal balance of the Mortgage Loans as of the Cut-off Date, or
[____]% in the case of any Distribution Date thereafter.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer, the Trustee with the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new

                                      A-1-3

<PAGE>

Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-1-4

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                DEUTSCHE BANK NATIONAL
                                                TRUST COMPANY
                                                as Trustee

                                                By:__________________________
                                                      Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                DEUTSCHE BANK NATIONAL
                                                TRUST COMPANY
                                                as Certificate Registrar

                                                By:__________________________
                                                      Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
________________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                                       A-1-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-1-7

<PAGE>

                                   EXHIBIT A-2

                          FORM OF CLASS A-2 CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

Series 2003-AR1, Class A-2                    Aggregate Certificate Principal
                                              Balance of the Class A-2
                                              Certificates as of the Issue Date:
Pass-Through Rate: Variable                   $__________________

Date of Pooling and Servicing Agreement       Denomination:  $_________________
and Cut-off Date: January 1, 2003
                                              Master Servicer:  Ameriquest
First Distribution Date: February 25, 2003    Mortgage Company

No. 1                                         Trustee:  Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                              CUSIP: [__________]

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                      A-1-8

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class A-2 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class A-2 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class A-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

          The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall be the
lesser of (x) the Formula Rate for such

                                      A-1-9

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [____]% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust is reduced to less than 10% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, or [____]% in the case of any
Distribution Date thereafter.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer, the Trustee with the consent of the Holders of Certificates entitled
to at least 66% of the Voting Rights. Any such consent by the Holder of this
Certificate shall be conclusive and binding on such Holder and upon all future
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders of
any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                     A-1-10

<PAGE>

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-1-11

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Trustee

                                                   By:__________________________
                                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Certificate Registrar

                                                   By:__________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:_________________________
_______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                     A-1-13

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                     A-1-14

<PAGE>

                                   EXHIBIT A-3

                          FORM OF CLASS M-1 CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES AND
     THE CLASS A-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING
     AND SERVICING AGREEMENT REFERRED TO HEREIN.

Series 2003-AR1, Class M-1                    Aggregate Certificate Principal
                                              Balance of the Class M-1
                                              Certificates as of the Issue Date:
Pass-Through Rate:  Variable                  $_____________________

Date of Pooling and Servicing Agreement       Denomination:  $__________________
and Cut-off Date: January 1, 2003
                                              Master Servicer:  Ameriquest
First Distribution Date: February 25, 2003    Mortgage Company

No. 1                                         Trustee:  Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                              CUSIP: [__________]

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                     A-1-15

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-1 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-1 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-1 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

          The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall be the
lesser of (x) the Formula Rate for such

                                     A-1-16

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [____]% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust is reduced to less than 10% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, or [____]% in the case of any
Distribution Date thereafter.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                     A-1-17

<PAGE>

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-1-18

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY
                                                  as Trustee

                                                  By:__________________________
                                                         Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY
                                                  as Certificate Registrar

                                                  By:__________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:_________________________
_______________________________________________________________________________

Dated:

                                          _____________________________________
                                          Signature by or on behalf of assignor

                                          _____________________________________
                                          Signature Guaranteed

                                     A-1-20

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                     A-1-21

<PAGE>

                                   EXHIBIT A-4

                          FORM OF CLASS M-2 CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
     CLASS A-2 CERTIFICATES AND THE CLASS M-1 CERTIFICATES TO THE EXTENT
     DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
     HEREIN.

Series 2003-AR1, Class M-2                    Aggregate Certificate Principal
                                              Balance of the Class M-2
                                              Certificates as of the Issue Date:
Pass-Through Rate:  Variable                  $__________________

Date of Pooling and Servicing Agreement       Denomination:  $_________________
and Cut-off Date: January 1, 2003
                                              Master Servicer:  Ameriquest
First Distribution Date: February 25, 2003    Mortgage Company

No. 1                                         Trustee:  Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                              CUSIP: [__________]

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                      A-3-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-2 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-2 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-2 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

          The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall be the
lesser of (x) the Formula Rate for such

                                      A-3-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [____]% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust is reduced to less than 10% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, or [____]% in the case of any
Distribution Date thereafter.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                      A-3-3

<PAGE>

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-3-4

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Trustee

                                                   By:__________________________
                                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Certificate Registrar

                                                   By:__________________________
                                                         Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:_________________________
_______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-3-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-3-7

<PAGE>

                                   EXHIBIT A-5

                          FORM OF CLASS M-3 CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
     CLASS A-2 CERTIFICATES, THE CLASS M-1 CERTIFICATES AND THE CLASS
     M-2 CERTIFICATES TO THE EXTENT DESCRIBED IN THE POOLING AND
     SERVICING AGREEMENT REFERRED TO HEREIN.

Series 2003-AR1, Class M-3                    Aggregate Certificate Principal
                                              Balance of the Class M-3
                                              Certificates as of the Issue Date:
Pass-Through Rate:  Variable                  $__________________

Date of Pooling and Servicing Agreement       Denomination:  $__________________
and Cut-off Date: January 1, 2003
                                              Master Servicer:  Ameriquest
First Distribution Date: February 25, 2003    Mortgage Company

No. 1                                         Trustee:  Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                              CUSIP: [__________]

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                      A-4-1

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                                        AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-3 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-3 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-3 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

          The Pass-Through Rate applicable to the calculation of interest
payable with respect to this Certificate on any Distribution Date shall be the
lesser of (x) the Formula Rate for such

                                      A-4-2

<PAGE>

Distribution Date and (y) the Net WAC Pass-Through Rate for such Distribution
Date. For any Distribution Date and this Certificate, the Formula Rate is the
lesser of (i) One-Month LIBOR plus the Certificate Margin and (ii) the Maximum
Cap Rate. The Certificate Margin for this Certificate is with respect to this
Certificate is [____]% in the case of each Distribution Date through and
including the Distribution Date on which the aggregate principal balance of the
Mortgage Loans (and properties acquired in respect thereof) remaining in the
Trust is reduced to less than 10% of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, or [____]% in the case of any
Distribution Date thereafter.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

                                      A-4-3

<PAGE>

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-4-4

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Trustee

                                                   By:__________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Certificate Registrar

                                                   By:__________________________
                                                         Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-4-6

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-4-7

<PAGE>

                                   EXHIBIT A-6

                          FORM OF CLASS M-4 CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE IS SUBORDINATE TO THE CLASS A-1 CERTIFICATES, THE
     CLASS A-2 CERTIFICATES, THE CLASS M-1 CERTIFICATES, THE CLASS M-2
     CERTIFICATES AND THE CLASS M-3 CERTIFICATES TO THE EXTENT DESCRIBED
     IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

Series 2003-AR1, Class M-4                    Aggregate Certificate Principal
                                              Balance of the Class M-4
                                              Certificates as of the Issue Date:
Pass-Through Rate: [_____]%                   $_________________

Date of Pooling and Servicing Agreement       Denomination:  $__________________
and Cut-off Date: January 1, 2003
                                              Master Servicer:  Ameriquest
First Distribution Date: February 25, 2003    Mortgage Company

No. 1                                         Trustee:  Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                              CUSIP: [__________]

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                      A-4-8

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Cede & Co. is the registered owner of a Percentage
Interest (obtained by dividing the denomination of this Certificate by the
aggregate Certificate Principal Balance of the Class M-4 Certificates as of the
Issue Date) in that certain beneficial ownership interest evidenced by all the
Class M-4 Certificates in REMIC II created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Ameriquest Mortgage
Securities Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Master Servicer and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class M-4 Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

          The Pass-Through Rate with respect to the Class M-4 Certificates and
any Distribution Date shall be the lesser of (x) [_____]% per annum in the case
of each Distribution Date

                                      A-4-9

<PAGE>

through and including the Distribution Date on which the aggregate principal
balance of the Mortgage Loans (and properties acquired in respect thereof)
remaining in the Trust is reduced to less than 10% of the aggregate principal
balance of the Mortgage Loans as of the Cut-off Date, or [____]% in the case of
any Distribution Date thereafter and (y) the Net WAC Pass-Through Rate for such
class for such Distribution Date.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other

                                     A-4-10

<PAGE>

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

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                     A-4-11

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY
                                                  as Trustee

                                                  By:___________________________
                                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY
                                                  as Certificate Registrar

                                                  By:___________________________
                                                       Authorized Signatory

                                     A-4-12

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                     A-4-13

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                     A-4-14

<PAGE>

                                   EXHIBIT A-7

                          FORM OF CLASS CE CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT",
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE IS SUBORDINATE TO THE A-1 CERTIFICATES, THE CLASS
     A-2 CERTIFICATES AND THE MEZZANINE CERTIFICATES TO THE EXTENT
     DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO
     HEREIN.

     THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
     PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
     TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
     THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
     OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
     EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
     ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
     THE PROCEDURES DESCRIBED HEREIN.

                                      A-5-1

<PAGE>

Series 2003-AR1, Class CE                     Aggregate Certificate Principal
                                              Balance of the Class CE
                                              Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement       $____________________
and Cut-off Date: January 1, 2003
                                              Denomination:  $__________________
First Distribution Date: February 25, 2003
                                              Master Servicer:  Ameriquest
No. 1                                         Mortgage Company

Aggregate Notional Amount of the Class        Trustee: Deutsche Bank National
CE Certificates as of the Issue Date:         Trust Company
$___________________
                                              Issue Date: January [__], 2003
Notional Amount:  $__________________

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                                      A-5-2

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Ameriquest Mortgage Company is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class CE
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class CE Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class CE Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

                                      A-5-3

<PAGE>

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the

                                      A-5-4

<PAGE>

Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee or the Master Servicer in their respective
capacities as such), together with copies of the written certification(s) of the
Holder of the Certificate desiring to effect the transfer and/or such Holder's
prospective transferee upon which such Opinion of Counsel is based. None of the
Depositor, the Certificate Registrar, the Trustee is obligated to register or
qualify the Class of Certificates specified on the face hereof under the 1933
Act or any other securities law or to take any action not otherwise required
under the Agreement to permit the transfer of such Certificates without
registration or qualification. Any Holder desiring to effect a transfer of this
Certificate shall be required to indemnify the Trustee, the Depositor, the
Certificate Registrar and the Master Servicer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

                                      A-5-5

<PAGE>

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-5-6

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                DEUTSCHE BANK NATIONAL
                                                TRUST COMPANY
                                                as Trustee

                                                By:_____________________________
                                                        Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                DEUTSCHE BANK NATIONAL
                                                TRUST COMPANY
                                                as Certificate Registrar

                                                By:_____________________________
                                                       Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-5-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-5-9

<PAGE>

                                   EXHIBIT A-8

                           FORM OF CLASS P CERTIFICATE

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT",
     AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
     OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
     PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
     TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
     THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
     OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
     EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
     ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
     THE PROCEDURES DESCRIBED HEREIN.

Series 2003-AR1, Class P                      Aggregate Certificate Principal
                                              Balance of the Class P
                                              Certificates as of the Issue Date:
Date of Pooling and Servicing Agreement       $100.00
and Cut-off Date: January 1, 2003
                                              Denomination:  $100.00
First Distribution Date: February 25, 2003
                                              Master Servicer:  Ameriquest
No. 1                                         Mortgage Company

                                              Trustee: Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                      A-6-1

<PAGE>

     DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF
     THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.
     ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF
     AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE
     DENOMINATION OF THIS CERTIFICATE.

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Ameriquest Mortgage Company is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate Certificate Principal Balance of the Class P
Certificates as of the Issue Date) in that certain beneficial ownership interest
evidenced by all the Class P Certificates in REMIC II created pursuant to a
Pooling and Servicing Agreement, dated as specified above (the "Agreement"),
among Ameriquest Mortgage Securities Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement), the Master
Servicer and the Trustee, a summary of certain of the pertinent provisions of
which is set forth hereafter. To the extent not defined herein, the capitalized
terms used herein have the meanings assigned in the Agreement. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class P Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution

                                      A-6-2

<PAGE>

Date or otherwise by check mailed by first class mail to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Trustee for that purpose as provided in the
Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face hereof equal to the
denomination specified on the face hereof divided by the aggregate Certificate
Principal Balance of the Class of Certificates specified on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"),

                                      A-6-3

<PAGE>

and an effective registration or qualification under applicable state securities
laws, or is made in a transaction that does not require such registration or
qualification. In the event that such a transfer of this Certificate is to be
made without registration or qualification, the Trustee and the Certificate
Registrar shall require receipt of (i) if such transfer is purportedly being
made in reliance upon Rule 144A under the 1933 Act, written certifications from
the Holder of the Certificate desiring to effect the transfer, and from such
Holder's prospective transferee, substantially in the forms attached to the
Agreement as Exhibit F-1, and (ii) in all other cases, an Opinion of Counsel
satisfactory to it that such transfer may be made without such registration or
qualification (which Opinion of Counsel shall not be an expense of the Trust
Fund or of the Depositor, the Trustee, or the Master Servicer in their
respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Certificate Registrar may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the

                                      A-6-4

<PAGE>

aggregate Stated Principal Balance of the Mortgage Loans at the time of purchase
being less than 10% of the sum of the aggregate Stated Principal Balance of the
Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-6-5

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Trustee

                                                   By:__________________________
                                                          Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                   DEUTSCHE BANK NATIONAL
                                                   TRUST COMPANY
                                                   as Certificate Registrar

                                                   By:__________________________
                                                        Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed Pass-
Through Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address:_________________________________________________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-6-7

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

     This information is provided by _____________________________________, the
assignee named above, or ____________________________________, as its agent.

                                     A-6-8

<PAGE>

                                   EXHIBIT A-9

                           FORM OF CLASS R CERTIFICATE

     THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON- UNITED STATES
     PERSON.

     SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
     "RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT"
     ("REMIC"), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS
     860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE").

     THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
     STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED
     PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
     TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND
     UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
     THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.

     ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
     BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
     THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

     NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR
     OTHER RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE
     EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
     ("ERISA"), OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH
     THE PROCEDURES DESCRIBED HEREIN.

     ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY
     BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT
     TO THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT (1) THE UNITED
     STATES OR ANY POSSESSION THEREOF, ANY STATE OR POLITICAL
     SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
     ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
     FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
     IN SECTION 521 OF THE CODE) THAT IS EXEMPT FROM THE TAX IMPOSED BY
     CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE
     TAX IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION
     DESCRIBED IN SECTION

                                      A-8-1

<PAGE>

     1381(A)(2)(C) OF THE CODE (ANY SUCHPERSON DESCRIBED IN THE
     FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO
     AS A "DISQUALIFIED ORGANIZATION") OR (4) AN AGENT OF A DISQUALIFIED
     ORGANIZATION AND (B) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
     ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES
     CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION
     OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
     CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF
     THIS CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
     DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE
     OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE
     DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER,
     INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
     CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE HEREOF
     SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
     PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE POOLING AND
     SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
     DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
     OWNERSHIP OF THIS CERTIFICATE.

Series 2003-AR1, Class R                      Aggregate Percentage Interest of
                                              the Class R Certificates as of the
                                              Issue Date: 100.00%
Date of Pooling and Servicing Agreement       Percentage Interest
and Cut-off Date: January 1, 2003
                                              Denomination: 100% Percentage
First Distribution Date: February 25, 2003    Interest

No. 1                                         Master Servicer:  Ameriquest
                                              Mortgage Company

                                              Trustee: Deutsche Bank National
                                              Trust Company

                                              Issue Date: January [__], 2003

                                      A-8-2

<PAGE>

                      ASSET-BACKED PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the "Trust Fund")
consisting primarily of a pool of conventional one- to four-family
adjustable-rate and fixed-rate first lien mortgage loans (the "Mortgage Loans")
formed and sold by

                       AMERIQUEST MORTGAGE SECURITIES INC.

     THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
     AMERIQUEST MORTGAGE SECURITIES INC., THE MASTER SERVICER, THE
     TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THIS
     CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY
     AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

          This certifies that Ameriquest Mortgage Company is the registered
owner of a Percentage Interest specified above in that certain beneficial
ownership interest evidenced by all the Class R Certificates in REMIC II created
pursuant to a Pooling and Servicing Agreement, dated as specified above (the
"Agreement"), among Ameriquest Mortgage Securities Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement), the
Master Servicer and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.

          Pursuant to the terms of the Agreement, distributions will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (a "Distribution Date"), commencing on the
First Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, in an amount equal to the product
of the Percentage Interest evidenced by this Certificate and the amount required
to be distributed to the Holders of Class R Certificates on such Distribution
Date pursuant to the Agreement.

          All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the Record Date immediately prior to such
Distribution Date or otherwise by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency appointed by the Trustee for that purpose as provided in
the Agreement.

          This Certificate is one of a duly authorized issue of Certificates
designated as Asset- Backed Pass-Through Certificates of the Series specified on
the face hereof (herein called the "Certificates") and representing a Percentage
Interest in the Class of Certificates specified on the face

                                      A-8-3

<PAGE>

hereof equal to the denomination specified on the face hereof divided by the
aggregate Certificate Principal Balance of the Class of Certificates specified
on the face hereof.

          The Certificates are limited in right of payment to certain
collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.

          The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Master Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
entitled to at least 66% of the Voting Rights. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of the
Holders of any of the Certificates.

          As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.

          The Certificates are issuable in fully registered form only without
coupons in Classes and denominations representing Percentage Interests specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.

          No transfer of this Certificate shall be made unless the transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and an effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar shall
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the Holder of the
Certificate desiring to effect the transfer, and from such Holder's prospective
transferee, substantially in the forms attached to the Agreement as Exhibit F-1,
and (ii) in all other cases, an Opinion of Counsel satisfactory to it that such
transfer may be made without such registration or qualification (which Opinion
of Counsel shall not be an expense of the Trust Fund or of the Depositor, the
Trustee or the Master Servicer in their

                                      A-8-4

<PAGE>

respective capacities as such), together with copies of the written
certification(s) of the Holder of the Certificate desiring to effect the
transfer and/or such Holder's prospective transferee upon which such Opinion of
Counsel is based. None of the Depositor, the Certificate Registrar or the
Trustee is obligated to register or qualify the Class of Certificates specified
on the face hereof under the 1933 Act or any other securities law or to take any
action not otherwise required under the Agreement to permit the transfer of such
Certificates without registration or qualification. Any Holder desiring to
effect a transfer of this Certificate shall be required to indemnify the
Trustee, the Depositor, the Certificate Registrar and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization, and (ii) a certificate that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in a REMIC, (B) it will include in its income a PRO RATA share
of the net income of the Trust Fund and that such income may be an "excess
inclusion," as defined in the Code, that, with certain exceptions, cannot be
offset by other losses or benefits from any tax exemption, and (C) it expects to
have the financial means to satisfy all of its tax obligations including those
relating to holding the Class R Certificates. Notwithstanding the registration
in the Certificate Register of any transfer, sale or other disposition of this
Certificate to a Disqualified Organization or an agent (including a broker,
nominee or middleman) of a Disqualified Organization, such registration shall be
deemed to be of no legal force or effect whatsoever and such Person shall not be
deemed to be a Certificateholder for any purpose, including, but not limited to,
the receipt of distributions in respect of this Certificate.

          The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 5.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.

          No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any Person using "Plan Assets" to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

          No service charge will be made for any such registration of transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

                                      A-8-5

<PAGE>

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

          The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment to the Certificateholders of all amounts
held by the Trustee and required to be paid to them pursuant to the Agreement
following the earlier of (i) the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan remaining in REMIC I,
and (ii) the purchase by the party designated in the Agreement at a price
determined as provided in the Agreement from REMIC I of all the Mortgage Loans
and all property acquired in respect of such Mortgage Loans. The Agreement
permits, but does not require, the party designated in the Agreement to purchase
from REMIC I all the Mortgage Loans and all property acquired in respect of any
Mortgage Loan at a price determined as provided in the Agreement. The exercise
of such right will effect early retirement of the Certificates; however, such
right to purchase is subject to the aggregate Stated Principal Balance of the
Mortgage Loans at the time of purchase being less than 10% of the sum of the
aggregate Stated Principal Balance of the Mortgage Loans at the Cut-off Date.

          The recitals contained herein shall be taken as statements of the
Depositor and the Trustee does not assume any responsibility for their
correctness.

          Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.

                                      A-8-6

<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated: January __, 2003

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY
                                                  as Trustee

                                                  By:___________________________
                                                         Authorized Officer

                          CERTIFICATE OF AUTHENTICATION

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

                                                  DEUTSCHE BANK NATIONAL
                                                  TRUST COMPANY
                                                  as Certificate Registrar

                                                  By:___________________________
                                                         Authorized Signatory

<PAGE>

                                  ABBREVIATIONS

          The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common           UNIF GIFT MIN ACT -     CUSTODIAN
                                                             -------------------
TEN ENT - as tenants by the entireties                         (Cust)   (Minor)
                                                             under Uniform Gifts
JT TEN -  as joint tenants with right if                     to Minors Act
          survivorship and not as tenants                    ___________________
          in common                                                (State)

          Additional abbreviations may also be used though not in the above
list.

                                   ASSIGNMENT

          FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)

a Percentage Interest equal to____% evidenced by the within Asset-Backed
Pass-Through Certificate and hereby authorize(s) the registration of transfer of
such interest to assignee on the Certificate Register of the Trust Fund.

          I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following
address:_________________________________________________________________
______________________________________________________________________________

Dated:

                                           _____________________________________
                                           Signature by or on behalf of assignor

                                           _____________________________________
                                           Signature Guaranteed

                                      A-8-8

<PAGE>

                            DISTRIBUTION INSTRUCTIONS

          The assignee should include the following for purposes of
distribution:

          Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________
________________________________ for the account of ___________________________
_______________________________, account number______________ or, if mailed by
check, to _____________________________________________________________________
_______________________________________________________________________________.
Applicable statements should be mailed to______________________________________
_______________________________________________________________________________
_______________________________________________________________________________.

          This information is provided by _____________________________________,
the assignee named above, or ____________________________________, as its agent.

                                      A-8-9

<PAGE>

                                    EXHIBIT B

                           FORM OF LOST NOTE AFFIDAVIT

Loan #: ____________
Borrower: _____________

                               LOST NOTE AFFIDAVIT

          I, as ___________________ of ______________________, a _______________
corporation am authorized to make this Affidavit on behalf of __________________
_____________________ (the "Seller"). In connection with the administration of
the Mortgage Loans held by ____________________, a _________________ corporation
as Seller on behalf of Ameriquest Mortgage Securities Inc. (the "Purchaser"),
_____________________ (the "Deponent"), being duly sworn, deposes and says that:

     1.    The Seller's address is:           _____________________
                                              _____________________
                                              _____________________

     2.   The Seller previously delivered to the Purchaser a signed Initial
          Certification with respect to such Mortgage and/or Assignment of
          Mortgage;

     3.   Such Mortgage Note and/or Assignment of Mortgage was assigned or sold
          to the Purchaser by ________________________, a ____________
          corporation pursuant to the terms and provisions of a Mortgage Loan
          Purchase Agreement dated as of __________ __, _____;

     4.   Such Mortgage Note and/or Assignment of Mortgage is not outstanding
          pursuant to a request for release of Documents;

     5.   Aforesaid Mortgage Note and/or Assignment of Mortgage (the "Original")
          has been lost;

     6.   Deponent has made or caused to be made a diligent search for the
          Original and has been unable to find or recover same;

     7.   The Seller was the Seller of the Original at the time of the loss; and

     8.   Deponent agrees that, if said Original should ever come into Seller's
          possession, custody or power, Seller will immediately and without
          consideration surrender the Original to the Purchaser.

     9.   Attached hereto is a true and correct copy of (i) the Note, endorsed
          in blank by the Mortgagee and (ii) the Mortgage or Deed of Trust
          (strike one) which

                                       B-1

<PAGE>

          secures the Note, which Mortgage or Deed of Trust is recorded in the
          county where the property is located.

     10.  Deponent hereby agrees that the Seller (a) shall indemnify and hold
          harmless the Purchaser, its successors and assigns, against any loss,
          liability or damage, including reasonable attorney's fees, resulting
          from the unavailability of any Notes, including but not limited to any
          loss, liability or damage arising from (i) any false statement
          contained in this Affidavit, (ii) any claim of any party that has
          already purchased a mortgage loan evidenced by the Lost Note or any
          interest in such mortgage loan, (iii) any claim of any borrower with
          respect to the existence of terms of a mortgage loan evidenced by the
          Lost Note on the related property to the fact that the mortgage loan
          is not evidenced by an original note and (iv) the issuance of a new
          instrument in lieu thereof (items (i) through (iv) above hereinafter
          referred to as the "Losses") and (b) if required by any Rating Agency
          in connection with placing such Lost Note into a Pass-Through
          Transfer, shall obtain a surety from an insurer acceptable to the
          applicable Rating Agency to cover any Losses with respect to such Lost
          Note.

     11.  This Affidavit is intended to be relied upon by the Purchaser, its
          successors and assigns. _____________________, a ______________
          corporation represents and warrants that it has the authority to
          perform its obligations under this Affidavit of Lost Note.

Executed this ____ day, of ___________ ______.

                                                      SELLER

                                                      By:______________________
                                                      Name:
                                                      Title:

          On this _____ day of ________, _____, before me appeared
_________________ to me personally known, who being duly sworn did say that he
is the _____________________ of ____________________ a ______________
corporation and that said Affidavit of Lost Note was signed and sealed on behalf
of such corporation and said acknowledged this instrument to be the free act and
deed of said corporation.

                                              Signature:

                                              [Seal]

                                       B-2

<PAGE>

                                   EXHIBIT C-1

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                    [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

         Re:  Pooling and Servicing Agreement, dated as of January 1, 2003,
              among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
              Company and Deutsche Bank National Trust Company, Asset-Backed
              Pass-Through Certificates, Series 2003-AR1
              --------------------------------------------------------------

Ladies and Gentlemen:

          Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated
as of January 1, 2003, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company, as master servicer and Deutsche Bank National Trust
Company as trustee, we hereby acknowledge that as to each Mortgage Loan listed
in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents constituting part of
such Mortgage File (other than such documents described in Section 2.01(v))
required to be delivered to it pursuant to this Agreement are in its possession,
(ii) such documents have been reviewed by it or such Custodian and are not
mutilated, torn or defaced unless initialed by the related borrower and relate
to such Mortgage Loan, (iii) based on its or the Custodian's examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule that corresponds to items (1) through (3), (6), (9), (10), (13), (15)
and (19) of the definition of "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File.

          The Trustee was under no duty or obligation (i) to inspect, review or
examine any such documents, instruments, certificates or other papers to
determine whether they are genuine, enforceable, or appropriate for the
represented purpose or whether they have actually been recorded or that they are
other than what they purport to be on their face or (ii) to determine whether
any Mortgage File should include any of the documents specified in clause (v) of
Section 2.01.

                                      C-1-1

<PAGE>

          Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement.

                                              DEUTSCHE BANK NATIONAL TRUST
                                              COMPANY, as Trustee

                                              By:______________________________
                                              Name:
                                              Title:

                                      C-2-1

<PAGE>

                                   EXHIBIT C-2

                      FORM OF TRUSTEE'S FINAL CERTIFICATION

                                                       [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

       Re:   Pooling and Servicing Agreement, dated as of January 1, 2003,
             among Ameriquest Mortgage Securities Inc., Ameriquest Mortgage
             Company and Deutsche Bank National Trust Company, Asset-Backed
             Mortgage Pass-Through Certificates, Series 2003-AR1
             --------------------------------------------------------------

Ladies and Gentlemen:

          In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto), it or a Custodian on its
behalf has received each of the documents listed in Section 2.01.

          The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in the Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan.

          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                              DEUTSCHE BANK NATIONAL TRUST
                                              COMPANY, as Trustee

                                              By:______________________________
                                              Name:
                                              Title:

                                      C-3-1

<PAGE>

                                   EXHIBIT C-3

                   FORM OF TRUSTEE'S RECEIPT OF MORTGAGE NOTES

                                                  [Date]

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road
Orange, California 92868

Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

          Re: Pooling and Servicing Agreement, dated as of January 1,
          2003, among Ameriquest Mortgage Securities Inc., Ameriquest
          Mortgage Company and Deutsche Bank National Trust Company,
          Asset-Backed Mortgage Pass-Through Certificates, Series 2003-AR1
          ----------------------------------------------------------------

Ladies and Gentlemen:

     Pursuant to Section 2.01 of the Pooling and Servicing Agreement, dated as
of January 1, 2003, among Ameriquest Mortgage Securities Inc. as Depositor,
Ameriquest Mortgage Company, as master servicer and Deutsche Bank National Trust
Company as trustee, we hereby acknowledge the receipt of the original Mortgage
Note for each Mortgage Loan with any exceptions thereto listed on Exhibit 1.

     Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement.

                                              DEUTSCHE BANK NATIONAL TRUST
                                              COMPANY, as Trustee

                                              By:______________________________
                                              Name:
                                              Title:

                                      C-3-2

<PAGE>

                                    EXHIBIT D

                    FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

                                       D-1

<PAGE>

                        MORTGAGE LOAN PURCHASE AGREEMENT

          This is a Mortgage Loan Purchase Agreement (this "Agreement"), dated
January 15, 2003 between Ameriquest Mortgage Company, a Delaware corporation
(the "Originator") and Ameriquest Mortgage Securities Inc., a Delaware
corporation (the "Purchaser").

                              Preliminary Statement
                              ---------------------

          The Originator intends to sell the Mortgage Loans (as hereinafter
defined) to the Purchaser on the terms and subject to the conditions set forth
in this Agreement. The Purchaser shall deposit the Mortgage Loans into a
mortgage pool constituting of the Trust Fund. The Trust Fund will be evidenced
by a single series of asset-backed pass-through certificates designated as
Series 2003-AR1 (the "Certificates"). The Certificates will consist of nine
classes of certificates. The Class CE Certificates, the Class P Certificates and
the Class R Certificates (collectively, the "Non- offered Certificates") will be
delivered to the Originator as partial consideration for the Mortgage Loans as
further described below.

          The Certificates will be issued pursuant to a Pooling and Servicing
Agreement for Series 2003-AR1, dated as of January 1, 2003 (the "Pooling and
Servicing Agreement"), among the Purchaser as depositor (in such capacity, the
"Depositor"), the Originator as master servicer (in such capacity, the "Master
Servicer") and Deutsche Bank National Trust Company as trustee (the "Trustee").
Pursuant to the Pooling and Servicing Agreement, the Depositor will assign all
of its right, title and interest in and to the Mortgage Loans, together with its
rights under this Agreement, to the Trustee for the benefit of the
Certificateholders. Capitalized terms used but not defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.

          The parties hereto agree as follows:

          SECTION 1. AGREEMENT TO PURCHASE. The Originator agrees to sell, and
the Purchaser agrees to purchase, on or before January 17, 2003 (the "Closing
Date"), certain adjustable-rate and fixed-rate conventional, one- to
four-family, residential mortgage loans (the "Mortgage Loans"), having an
aggregate principal balance as of the close of business on January 1, 2003 (the
"Cut-off Date"), of $400,005,198.88, after giving effect to all payments due on
the Mortgage Loans on or before the Cut-off Date (the "Closing Balance"),
whether or not received including the right to any Prepayment Charges collected
after the Cut-off Date from the Mortgagors in connection with any Principal
Prepayments on the Mortgage Loans. Any payments (including Prepayment Charges)
collected on or before the Cut-off Date, including all scheduled payments of
principal and interest due on or before the Cut-off Date and collected after the
Cut-off Date, shall belong to the Originator. In addition to the sale of the
Mortgage Loans, the Originator will cause Swiss Re Financial Products
Corporation ("Swiss Re") to enter into the Cap Contracts and will cause Swiss Re
to transfer the Cap Contracts to the Purchaser.

          SECTION 2. MORTGAGE LOAN SCHEDULE. The Purchaser and the Originator
have agreed upon which of the mortgage loans owned by the Originator are to be
purchased by the Purchaser pursuant to this Agreement, and the Originator shall
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the "Closing Schedule") describing such Mortgage

<PAGE>

Loans and setting forth all of the Mortgage Loans to be purchased under this
Agreement, including the related Prepayment Charges. The Closing Schedule shall
conform to the requirements set forth in this Agreement and to the definition of
"Mortgage Loan Schedule" under the Pooling and Servicing Agreement. The Closing
Schedule shall be used as the Mortgage Loan Schedule under the Pooling and
Servicing Agreement.

          SECTION 3. CONSIDERATION.

          In consideration for the Mortgage Loans to be purchased hereunder, the
Purchaser shall, as described in Section 8, (i) pay to or upon the order of the
Originator in immediately available funds an amount (the "Purchase Price") equal
to the net sale proceeds of the Class A-1 Certificates, the Class A-2
Certificates, the Class M-1 Certificates, the Class M-2 Certificates, the Class
M-3 Certificates, the Class M-4 Certificates and (ii) deliver to the Originator
or its designee, the Non-offered Certificates.

          SECTION 4. TRANSFER OF THE MORTGAGE LOANS.

          (a) POSSESSION OF MORTGAGE FILES. The Originator does hereby sell to
the Purchaser, without recourse but subject to the terms of this Agreement, all
of its right, title and interest in, to and under the Mortgage Loans, including
the related Prepayment Charges collected after the Cut-off Date. The contents of
each Mortgage File not delivered to the Purchaser or to any assignee, transferee
or designee of the Purchaser on or prior to the Closing Date are and shall be
held in trust by the Originator for the benefit of the Purchaser or any
assignee, transferee or designee of the Purchaser. Upon the sale and
contribution of the Mortgage Loans the ownership of each Mortgage Note, the
related Mortgage and the other contents of the related Mortgage File is vested
in the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or that come into the possession of the
Originator on or after the Closing Date shall immediately vest in the Purchaser
and shall be delivered immediately to the Purchaser or as otherwise directed by
the Purchaser.

          (b) DELIVERY OF MORTGAGE LOAN DOCUMENTS. The Originator will, on or
prior to the Closing Date, deliver or cause to be delivered to the Purchaser or
any assignee, transferee or designee of the Purchaser each of the following
documents for each Mortgage Loan:

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

                                       -2-

<PAGE>

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

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

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

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

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

          If any document referred to in Section 4(b)(ii), 4(b)(iii) or 4(b)(iv)
above has been submitted for recording but either (x) has not been returned from
the applicable public recording office or (y) has been lost or such public
recording office has retained the original of such document, the obligations of
the Originator hereunder shall be deemed to have been satisfied upon (1)
delivery by or on behalf of the Originator promptly upon receipt thereof to the
Purchaser or any assignee, transferee or designee of the Purchaser of either the
original or a copy of such document certified by the Originator in the case of
(x) above or the public recording office in the case of (y) above to be a true
and complete copy of the recorded original thereof and (2) if such delivered
copy is certified by the Originator then in addition thereto delivery promptly
upon receipt thereof of either the original or a copy of such document certified
by the public recording office to be a true and complete copy of the original.
In the event that the original lender's title insurance policy has not yet been
issued, the Originator shall deliver to the Purchaser or any assignee,
transferee or designee of the Purchaser a written commitment or interim binder
or preliminary report of title issued by the title insurance or escrow company.
Promptly upon receipt by the Originator of any such original title insurance
policy the Originator shall deliver such to the Purchaser or any assignee,
transferee or designee of the Purchaser.

          The Originator shall promptly (and in no event later than thirty (30)
Business Days, subject to extension upon mutual agreement between the Originator
and the Trustee, following the later of (i) the Closing Date, (ii) the date on
which the Originator receives the Assignment from the Trustee and (iii) the date
of receipt by the Originator of the recording information for a Mortgage) submit
or cause to be submitted for recording, at no expense to the Trust Fund or the
Trustee, in the appropriate public office for real property records, each
Assignment referred to in (iii) and (iv) above

                                       -3-

<PAGE>

and shall execute each original Assignment referred to in (iii) in the following
form: "Deutsche Bank National Trust Company, as Trustee under the applicable
agreement without recourse". In the event that any such Assignment is lost or
returned unrecorded because of a defect therein, the Originator shall promptly
prepare or cause to be prepared a substitute Assignment or cure or cause to be
cured such defect, as the case may be, and thereafter cause each such Assignment
to be duly recorded. Notwithstanding the foregoing, however, for administrative
convenience and facilitation of servicing and to reduce closing costs, the
Assignments of Mortgage shall not be required to be submitted for recording
(except with respect to any Mortgage Loan located in Maryland) unless such
failure to record would result in a withdrawal or a downgrading by any Rating
Agency of the rating on any Class of Certificates; provided further, however,
each Assignment of Mortgage shall be submitted for recording by the Originator
in the manner described above, at no expense to the Trust Fund or the Trustee,
upon the earliest to occur of: (i) reasonable direction by Holders of
Certificates entitled to at least 25% of the Voting Rights, (ii) failure of the
Master Servicer Termination Test, (iii) the occurrence of the bankruptcy or
insolvency of the Originator, (iv) the occurrence of a servicing transfer as
described in Section 7.02 of the Pooling and Servicing Agreement, and (v) if the
Originator is not the Master Servicer and with respect to any one Assignment of
Mortgage, the occurrence of a bankruptcy of the mortgagor under the related
Mortgage or a foreclosure of related Mortgage.

          Each original document relating to a Mortgage Loan which is not
delivered to the Purchaser or its assignee, transferee or designee, if held by
the Originator, shall be so held for the benefit of the Purchaser or its
assignee, transferee or designee.

          (c) ACCEPTANCE OF MORTGAGE LOANS. The documents delivered pursuant to
Section 4(b) hereof shall be reviewed by the Purchaser or any assignee,
transferee or designee of the Purchaser at any time before or after the Closing
Date (and with respect to each document permitted to be delivered after the
Closing Date within seven days of its delivery) to ascertain that all required
documents have been executed and received and that such documents relate to the
Mortgage Loans identified on the Mortgage Loan Schedule.

          (d) RESERVED.

          (e) TRANSFER OF INTEREST IN AGREEMENTS. The Purchaser has the right to
assign its interest under this Agreement, in whole or in part, to the Trustee,
as may be required to effect the purposes of the Pooling and Servicing
Agreement, without the consent of the Originator, and the assignee shall succeed
to the rights and obligations hereunder of the Purchaser. Any expense reasonably
incurred by or on behalf of the Purchaser or the Trustee in connection with
enforcing any obligations of the Originator under this Agreement will be
promptly reimbursed by the Originator.

          (f) EXAMINATION OF MORTGAGE FILES. Prior to the Closing Date, the
Originator shall either (i) deliver in escrow to the Purchaser or to any
assignee, transferee or designee of the Purchaser, for examination, the Mortgage
File pertaining to each Mortgage Loan or (ii) make such Mortgage Files available
to the Purchaser or to any assignee, transferee or designee of the Purchaser for
examination at the Trustee's offices in Santa Ana, California. Such examination
may be made by the Purchaser, and its respective designees, upon reasonable
notice to the Originator and the

                                       -4-

<PAGE>

Trustee during normal business hours before the Closing Date and within 60 days
after the Closing Date. If any such person makes such examination prior to the
Closing Date and identifies any Mortgage Loans that do not conform to the
requirements of the Purchaser as described in this Agreement, such Mortgage
Loans shall be deleted from the Closing Schedule. The Purchaser may, at its
option and without notice to the Originator, purchase all or part of the
Mortgage Loans without conducting any partial or complete examination. The fact
that the Purchaser or any person has conducted or has failed to conduct any
partial or complete examination of the Mortgage Files shall not affect the
rights of the Purchaser or any assignee, transferee or designee of the Purchaser
to demand repurchase or other relief as provided herein or under the Pooling and
Servicing Agreement.

          SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                     ORIGINATOR.

          The Originator hereby represents and warrants to the Purchaser, as of
the date hereof and as of the Closing Date, and covenants, that:

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

          (ii) The Originator had the full corporate power and authority to
     originate, hold and sell each Mortgage Loan and has the full corporate
     power and authority to service each Mortgage Loan, and to execute, deliver
     and perform, and to enter into and consummate the transactions contemplated
     by this Agreement and has duly authorized by all necessary corporate action
     on the part of the Originator the execution, delivery and performance of
     this Agreement; and this Agreement, assuming the due authorization,
     execution and delivery thereof by the Purchaser, constitutes a legal, valid
     and binding obligation of the Originator, enforceable against the
     Originator in accordance with its terms, except to the extent that (a) the
     enforceability thereof may be limited by bankruptcy, insolvency,
     moratorium, receivership and other similar laws relating to creditors'
     rights generally and (b) the remedy of specific performance and injunctive
     and other forms of equitable relief may be subject to the equitable
     defenses and to the discretion of the court before which any proceeding
     therefor may be brought;

          (iii) The execution and delivery of this Agreement by the Originator,
     the servicing of the Mortgage Loans by the Originator under the Pooling and
     Servicing Agreement, the consummation of any other of the transactions
     herein contemplated, and the fulfillment of or compliance with the terms
     hereof are in the ordinary course of business of the Originator and will
     not (A) result in a breach of any term or provision of the charter or
     by-laws of the Originator or (B) conflict with, result in a breach,
     violation or acceleration of, or result in a default under, the terms of
     any other material agreement or instrument to which the Originator is a
     party or by which it may be bound, or any statute, order or regulation

                                       -5-

<PAGE>

     applicable to the Originator of any court, regulatory body, administrative
     agency or governmental body having jurisdiction over the Originator; and
     the Originator is not a party to, bound by, or in breach or violation of
     any indenture or other agreement or instrument, or subject to or in
     violation of any statute, order or regulation of any court, regulatory
     body, administrative agency or governmental body having jurisdiction over
     it, which materially and adversely affects or, to the Originator's
     knowledge, would in the future materially and adversely affect, (x) the
     ability of the Originator to perform its obligations under this Agreement
     or (y) the business, operations, financial condition, properties or assets
     of the Originator taken as a whole;

          (iv) No consent, approval, authorization or order of any court or
     governmental agency or body is required for the execution, delivery and
     performance by the Originator of, or compliance by the Originator with,
     this Agreement or the consummation of the transactions contemplated hereby,
     or if any such consent, approval, authorization or order is required, the
     Originator has obtained the same;

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

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

          SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR RELATING
                     TO THE MORTGAGE LOANS.

          (I) The Originator hereby represents and warrants to the Purchaser
that as of the Closing Date:

          (a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects;

          (b) No Monthly Payment required to be made under any Mortgage Loan
will be contractually delinquent in excess of one month. No Mortgage Loan has
been contractually delinquent in excess of one month on more than one occasion
(excluding a "rolling" delinquency) at any time preceding the Closing Date. For
purposes of this Agreement, a Monthly Payment is considered "contractually
delinquent in excess of one month" (measured under the OTS method of delinquency
measurement) if the Monthly Payment is not made prior to the close of business
on the first day of the month immediately succeeding the month in which the
payment obligation arose;

          (c) The Originator has not advanced any Monthly Payment or portion
thereof required under the terms of the Mortgage Note; provided however, the
Originator's acceptance of

                                       -6-

<PAGE>

a "short" Monthly Payment in its capacity as the Master Servicer shall not be
deemed a violation of this Section 6(I)(c);

          (d) There are no delinquent taxes or assessments affecting the related
Mortgaged Property that could become a lien prior to the related Mortgage;

          (e) The terms of the Mortgage Note and the Mortgage have not been
materially impaired, waived, altered or modified in any respect, except by
written instruments, recorded in the applicable public recording office if
necessary to maintain the lien priority of the Mortgage. The substance of any
such waiver, alteration or modification has been approved by the title insurer,
to the extent required by the related policy and its terms are reflected on the
Mortgage Loan Schedule. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement (approved by the title insurer
to the extent required by the policy) and which assumption agreement is
reflected on the Mortgage Loan Schedule, is part of the Mortgage Loan File, and
has been delivered to the Trustee;

          (f) The Mortgaged Property is insured against loss by fire and hazards
of extended coverage (excluding earthquake insurance) in an amount which is at
least equal to the lesser of (i) the amount necessary to compensate for any
damage or loss to the improvements which are a part of such property on a
replacement cost basis or (ii) the outstanding principal balance of the Mortgage
Loan. If the Mortgaged Property is in an area identified on a Flood Hazard Map
or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available),
a flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration is in effect. All such insurance policies
contain a standard mortgagee clause naming the Originator, its successors and
assigns as mortgagee, all premiums thereupon previously coming due have been
paid and the Originator has not engaged in any act or omission which would
impair the coverage of any such insurance policies. Except as may be limited by
applicable law, the Mortgage obligates the Mortgagor thereunder to maintain all
such insurance at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to maintain such
insurance at Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required hazard and (if
applicable) flood insurance;

          (g) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity, fair housing
or disclosure laws applicable to the origination and servicing of the Mortgage
Loans have been complied with in all material respects;

          (h) The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not been released
from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such satisfaction, cancellation, subordination,
rescission or release;

          (i) Each Mortgage is a valid, existing and enforceable first lien on
the Mortgaged Property including all improvements on the Mortgaged Property;

                                       -7-

<PAGE>

          (j) The Mortgage Note and the related Mortgage are genuine and each is
the legal, valid and binding obligation of the maker thereof, insured under the
related title insurance policy referenced in (l), and enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by a bankruptcy, insolvency or reorganization;

          (k) Immediately preceding the sale of the Mortgage Loans from the
Originator to the Purchaser, the Originator shall be the sole legal, beneficial
and equitable owner of the Mortgage Note and the Mortgage and have the full
right to transfer and sell the Mortgage Loan to the Purchaser free and clear of
any encumbrance, equity, lien, pledge, charge, claim or security interest and
immediately upon the sale, assignment and endorsement of the Mortgage Loans from
the Originator to the Purchaser, the Purchaser will have good and indefeasible
title to and be the sole legal owner of the Mortgage Loans subject only to any
encumbrance, equity, lien, pledge, charge, claim or security interest arising
out of the Purchaser's actions;

          (l) Each Mortgage Loan is covered by a valid and binding ALTA lender's
title insurance policy issued by a title insurer qualified to do business in the
jurisdiction where the Mortgaged Property is located insuring the Originator,
its successors and assigns, as to the first priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, and with respect to
adjustable-rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Rate and Monthly Payment. No claims
have been filed under such lender's title insurance policy, and the Originator
has not done, by act or omission, anything that would impair the coverage of the
lender's title insurance policy. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance;

          (m) There is no material default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a material default, breach, violation or event
of acceleration, and neither the Originator nor its predecessors have waived any
material default, breach, violation or event of acceleration;

          (n) There are no mechanics' or similar liens or claims which have been
filed (and no rights are outstanding that under the law could give rise to such
liens) for work, labor or material provided to the related Mortgaged Property
prior to the origination of the Mortgage Loan which are or may be liens prior
to, or equal or coordinate with, the lien of the related Mortgage, except as may
be disclosed in the related title policy referenced in (l);

          (o) Each Mortgage Loan was originated or purchased by the Originator,
its agents, affiliates and/or subsidiaries and was originated by a savings and
loan association, savings bank, commercial bank, credit union, insurance
company, or mortgage banker or broker which is supervised and examined by a
federal or state authority, or by a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act;

          (p) Each Mortgage Loan is payable on the first day of each month in
monthly installments of principal and interest, which installments of interest
are subject to change with respect to adjustable-rate Mortgage Loans due to the
adjustments to the Mortgage Rate on each

                                       -8-

<PAGE>

Adjustment Date, with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty years from commencement of amortization. With
respect to adjustable-rate Mortgage Loans, all Mortgage Rate adjustments have
been made in strict compliance with state and federal law and the terms of the
related Mortgage Note. There is no negative amortization;

          (q) The origination and servicing practices (including collection
practices) used by the Originator with respect to each Mortgage Loan have been
in all respects in compliance with all applicable laws and regulations;

          (r) At the time of origination of the Mortgage Loan there was no
proceeding pending for the total or partial condemnation of the Mortgaged
Property and there is no proceeding pending for the total or partial
condemnation of the Mortgaged Property;

          (s) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure;

          (t) The Mortgage Note is not and has not been secured by any
collateral except the lien of the related Mortgage referred to in (i) above;

          (u) In the event the Mortgage constitutes a deed of trust, a trustee,
duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;

          (v) The Mortgage Loan is not subject to any valid right of rescission,
set-off, counterclaim or defense, including without limitation the defense of
usury, nor will the operation of any of the terms of the Mortgage Note or the
Mortgage, or the exercise of any right thereunder, render either the Mortgage
Note or the Mortgage unenforceable, in whole or in part, or subject to any such
right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;

          (w) The Mortgage Loans were underwritten in accordance with the
Originator's underwriting guidelines;

          (x) The Mortgaged Property is free of material damage and in good
repair (except any Mortgage Loan subject to a Withhold Escrow (as defined in the
Originator's underwriting guidelines) as shown on the Mortgage Loan Schedule;
provided that the Mortgage Loans subject to a Withhold Escrow shall not exceed
1% of the aggregate principal balance of all Mortgage Loans as of the Cut-off
Date);

                                       -9-

<PAGE>

          (y) All of the improvements which were included in determining the
Value of the Mortgaged Property lie wholly within the Mortgaged Property's
boundary lines and no improvements on adjoining properties encroach upon the
Mortgaged Property, except: (i) any encroachment insured against in the lender's
title insurance policy identified in (l), (ii) any encroachment generally
acceptable to sub prime mortgage loan originators doing business in the same
jurisdiction as the Mortgaged Property, and (iii) any encroachment which does
not materially interfere with the benefits of the security intended to be
provided by such Mortgage;

          (z) All parties to the Mortgage Note had the legal capacity to execute
and deliver the Mortgage Note, the Mortgage and any related agreement. The
Mortgage Note, the Mortgage and any related agreement have been duly and
properly executed by such parties;

          (aa) The Mortgage Loan has been fully disbursed and there is no
requirement for any future advances under the terms of the Mortgage Loan and the
proceeds of the Mortgage Loan have been fully disbursed (excepting therefrom any
Mortgage Loan subject to a Withhold Escrow as shown on the Mortgage Loan
Schedule);

          (bb) At the time of origination of the Mortgage Loan, no appraised
improvement located on or being part of the Mortgaged Property was in violation
of any applicable zoning law or regulation and all inspections, licenses and
certificates required in connection with the origination of any Mortgage Loan
with respect to the occupancy of the Mortgaged Property, have been made or
obtained from the appropriate authorities;

          (cc) No Mortgagor has notified the Originator of any relief requested
or allowed under the Soldiers and Sailors Civil Relief Act of 1940;

          (dd) All parties which have held an interest in the Mortgage Loan are
(or during the period in which they held and disposed of such interest, were)
(1) in compliance with any and all applicable licensing requirements of the
state where the Mortgaged Property is located, (2) organized under the laws of
such state, (3) qualified to do business in such state, (4) a federal savings
and loan association or national bank, (5) not doing business in such state, or
(6) exempt from the applicable licensing requirements of such state;

          (ee) No fraud was committed by the Originator or any broker acting on
its behalf, in connection with the origination of any Mortgage Loan;

          (ff) Except as may otherwise be limited by applicable law, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee thereunder;

          (gg) The Mortgage Loan does not contain any provision which would
constitute a "buydown" provision and pursuant to which Monthly Payments are paid
or partially paid with funds deposited in a separate account established by the
Originator, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor. The Mortgage Loan is not a "graduated payment
mortgage loan" and the Mortgage loan does not have a shared appreciation

                                      -10-

<PAGE>

or other contingent interest feature. With respect to each adjustable-rate
Mortgage Loan, the Mortgage Loan does not contain a provision permitting or
requiring conversion to a fixed-rate Mortgage Loan;

          (hh) There is no action or proceeding directly involving the Mortgaged
Property presently pending in which compliance with any environmental law, rule
or regulation is at issue and the Originator has received no notice of any
condition at the Mortgaged Property which is reasonably likely to give rise to
an action or proceeding in which compliance with any environmental law, rule or
regulation is at issue;

          (ii) The Mortgaged Property is a ground lease or a fee simple property
located in the state identified in the Mortgage Loan Schedule and consists of
real property with a single family residence erected thereon, or a two- to
four-family dwelling, or an individual condominium unit in a condominium
project, or an individual unit in a planned unit development or a residential
manufactured home as defined in section 603(6) of the National Manufactured
Housing Construction and Safety Standards Act of 1974 which is treated as real
estate under the applicable state law. Any unit in a planned unit development or
condominium project shall conform with the Originator's underwriting guidelines
regarding such dwellings. Mortgaged Properties which contain a home office shall
not be considered as being used for commercial purposes as long as the Mortgaged
Property has not been altered for commercial purposes and is not storing any
chemicals or raw materials other than those commonly used for homeowner repair,
maintenance and/or household purposes;

          (jj) No Mortgage Loan was made in connection with the construction of
a Mortgaged Property or to facilitate the sale of an Originator REO Property;

          (kk) The Mortgagor is one or more natural persons and/or trustees for
an Illinois land trust;

          (ll) None of the Mortgage Loans are classified as "high cost" loans
under the Home Ownership and Equity Protection Act of 1994 as amended ("HOEPA")
and/or under any comparable state or local statutes or regulations;

          (mm) The Originator has obtained a life of loan, transferable real
estate tax service contract (a "Tax Service Contract") with an Approved Tax
Service Contract Provider on each Mortgage Loan and such contract is assignable
without penalty, premium or cost to the Purchaser;

          (nn) None of the Mortgage Loans carry a credit life mortgage insurance
policy sold in conjunction with the origination of such Mortgage Loan;

          (oo) No Mortgage Loan was originated prior to June 24, 2002;

          (pp) The Originator has obtained a life of loan, transferable flood
certification contract for each Mortgage Loan and such contract is assignable
without penalty, premium or cost to the Purchaser;

                                      -11-

<PAGE>

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

          (rr) With respect to each Mortgage Loan that has a Prepayment Charge,
each such Prepayment Charge is enforceable and will be enforced by the
Originator for the benefit of the Purchaser, and each Prepayment Charge is
permitted pursuant to applicable federal, state and local law;

          (ss) At the time of origination of the Mortgage Loan, no Mortgagor was
a debtor in a state or federal bankruptcy or insolvency proceeding unless such
proceeding was dismissed or discharged in conjunction with the origination of
the Mortgage Loan;

          (tt) Each Assignment of Mortgage is in a recordable form and upon
inclusion of the name of the assignee and the mortgage recordation information
will be acceptable for recording under the laws of the jurisdiction where the
Mortgaged Property is located;

          (uu) All Escrow Payments previously coming due but not yet disbursed
by the Originator, are in the possession of the Originator and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and any interest accrued to the
Mortgagor has been properly paid or credited. An escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient to
pay for every item subject to the escrow agreement which remains unpaid and
which has been assessed but is not yet due and payable. No Escrow Payments or
other charges or payments due the Originator have been capitalized under the
Mortgage or the Mortgage Note;

          (vv) No Mortgage Loan is currently the subject of pending litigation;

          (ww) Each appraiser retained to perform the origination appraisal was
duly licensed or otherwise qualified under the laws of the state of the related
Mortgaged Property to perform real property appraisals;

          (xx) No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan;

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

          (zz) No Mortgage Loan originated on or after October 1, 2002 will
impose a Prepayment Charge for a term in excess of three years. No other
Mortgage Loan will impose a Prepayment Charge for a term in excess of five
years; and

                                      -12-

<PAGE>

          (aaa) No Mortgage Loan secured by a Mortgaged Property located in
Georgia was originated on or after October 1, 2002.

          SECTION 7. REPURCHASE OBLIGATION FOR DEFECTIVE DOCUMENTATION AND FOR
                     BREACH OF REPRESENTATION AND WARRANTY.

          (a) The representations and warranties contained in Section 6 shall
not be materially impaired by any review and examination of loan files or other
documents evidencing or relating to the Mortgage Loans or any failure on the
part of the Originator or the Purchaser to review or examine such documents and
shall inure to the benefit of any assignee, transferee or designee of the
Purchaser, including the Trustee for the benefit of the Certificateholders.

          Upon discovery by the Originator, the Purchaser or any assignee,
transferee or designee of the Purchaser of any materially defective document in,
or that any material document was not transferred by the Originator (as listed
on the Trustee's Preliminary Exception Report), as part of, any Mortgage File or
of a breach of any of the representations and warranties contained in Section 5
or Section 6 that materially and adversely affects the value of a Mortgage Loan
or the interest therein of the Purchaser (it being understood that with respect
to the representations and warranties set forth in (ll), (xx), (yy), (zz) and
(aaa) of Section 6 herein, a breach of any such representation or warranty shall
in and of itself be deemed to materially adversely affect the interest therein
of the Purchaser and the Purchaser's assignees, designees and transferees), the
party discovering the breach shall give prompt written notice to the other.
Within ninety (90) days of its discovery or its receipt of notice of any such
missing documentation which was not transferred to the Purchaser as described
above or materially defective documentation or any such breach of a
representation and warranty (it being understood that with respect to the
representations and warranties set forth in (ll), (xx), (yy), (zz), (aaa) of
Section 6 herein, a breach of any such representation or warranty shall in and
of itself be deemed to materially adversely affect the interest therein of the
Purchaser and the Purchaser's assignees, designees and transferees), the
Originator promptly shall deliver such missing document or cure such defect or
breach in all material respects, or in the event the Originator cannot deliver
such missing document or such defect or breach cannot be cured, the Originator,
shall, within ninety (90) days of its discovery or receipt of notice, either (i)
repurchase the affected Mortgage Loan at a price equal to the Purchase Price or
(ii) pursuant to the provisions of the Pooling and Servicing Agreement, cause
the removal of such Mortgage Loan from the Trust Fund and substitute one or more
Qualified Substitute Mortgage Loans. In the event that any Mortgage Loan is
subject to a breach of the representation and warranty in Section 6(I)(rr)
resulting in the Master Servicer's inability to collect all or part of the
Prepayment Charge from the Mortgagor, in lieu of repurchase, the Originator
shall be obligated to remit to the Master Servicer (for deposit in the
Collection Account) any shortfall in the Prepayment Charge collected upon the
Mortgagor's voluntary and full principal prepayment.

          The Originator shall amend the Closing Schedule to reflect the
withdrawal of such Mortgage Loan from the terms of this Agreement and the
Pooling and Servicing Agreement and the addition, if any, of a Qualified
Substitute Mortgage Loan. The Originator shall deliver to the Purchaser such
amended Closing Schedule and shall deliver such other documents as are required
by this Agreement or the Pooling and Servicing Agreement within five (5) days of
any such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by deposit in the

                                      -13-

<PAGE>

Collection Account of the amount of the Purchase Price in accordance with
Section 2.03 of the Pooling and Servicing Agreement. Any repurchase or
substitution required by this Section shall be made in a manner consistent with
Section 2.03 of the Pooling and Servicing Agreement.

          In addition, upon discovery by the Originator, the Purchaser, or any
assignee, transferee or designee of the Purchaser that any Mortgage Loan does
not constitute a "qualified mortgage" within the meaning of Section 860G(a)(3)
of the Code, the party discovering the breach shall give prompt written notice
within five Business Days to the others. Within ninety (90) days of its
discovery or its receipt of notice, the Originator promptly shall either (i)
repurchase the affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) pursuant to the
provisions of the Pooling and Servicing Agreement, cause the removal of such
Mortgage Loan from the Trust Fund and substitute one or more Qualified
Substitute Mortgage Loans.

          (b) It is understood and agreed that the obligations of the Originator
set forth in this Section 7 to cure, remit a Prepayment Charge shortfall,
repurchase or substitute for a defective Mortgage Loan constitute the sole
remedies of the Purchaser against the Originator respecting a missing or
defective material document or a breach of the representations and warranties
contained in Section 5 or Section 6.

          (c) Notwithstanding anything contained herein to the contrary, the
Originator shall be solely responsible for the repurchase or removal, as set
forth in Section 7(a), to the extent that any breach of any of the
representations and warranties contained in Section 5(a) or Section 6(I) herein
materially and adversely affect the value of any Mortgage Loan or the interest
of the Certificateholders therein. Further, the Originator shall be solely
responsible for the repurchase or removal, as set forth in Section 7(a), to the
extent that any breach of any of the representations and warranties contained in
Section 5(b) or Section 6(II) herein materially and adversely affect the value
of any Mortgage Loan or the interest of the Certificateholders therein. To the
extent that the same representation and warranty is breached by both the
Originator and the Purchaser, the Originator shall be solely responsible for the
repurchase or removal of such Mortgage Loan, as set forth in Section 7(a).

          SECTION 8. CLOSING; PAYMENT FOR THE MORTGAGE LOANS. The closing of the
purchase and sale of the Mortgage Loans shall be held at the New York City
office of Thacher Proffitt & Wood at 10:00 AM New York City time on the Closing
Date.

          The closing shall be subject to each of the following conditions:

          (a)  All of the representations and warranties of the Originator under
               this Agreement shall be true and correct in all material respects
               as of the date as of which they are made and no event shall have
               occurred which, with notice or the passage of time, would
               constitute a default under this Agreement;

          (b)  The Purchaser shall have received, or the attorneys of the
               Purchaser shall have received in escrow (to be released from
               escrow at the time of closing), all Closing Documents as
               specified in Section 9 of this Agreement, in such

                                      -14-

<PAGE>

               forms as are agreed upon and acceptable to the Purchaser, duly
               executed by all signatories other than the Purchaser as required
               pursuant to the respective terms thereof;

          (c)  The Originator shall have delivered or caused to be delivered and
               released to the Purchaser or to its designee, all documents
               (including without limitation, the Mortgage Loans) required to be
               so delivered by the Purchaser pursuant to Section 2.01 of the
               Pooling and Servicing Agreement; and

          (d)  All other terms and conditions of this Agreement shall have been
               complied with.

          Subject to the foregoing conditions, the Purchaser shall deliver or
cause to be delivered to the Originator on the Closing Date, against delivery
and release by the Originator to the Trustee of all documents required pursuant
to the Pooling and Servicing Agreement, the consideration for the Mortgage Loans
as specified in Section 3 of this Agreement, by delivery to the Originator of
the Purchase Price.

          SECTION 9. CLOSING DOCUMENTS. Without limiting the generality of
Section 8 hereof, the closing shall be subject to delivery of each of the
following documents:

          (a)  An Officer's Certificate of the Originator, dated the Closing
               Date, in form satisfactory to and upon which the Purchaser and
               the Underwriter may rely, and attached thereto copies of the
               certificate of incorporation, by-laws and certificate of good
               standing of the Originator under the laws of Delaware and stating
               that the information contained in the Prospectus Supplement,
               relating to the Mortgage Loans, the Originator, and its loan
               portfolio, is true and accurate in all material respects and does
               not contain any untrue statement of a material fact or omit to
               state a material fact required to be stated therein or necessary
               to make the statements therein , in light of the circumstances
               under which they were made, not misleading and (ii) if the Class
               CE Certificates and Class P Certificates are offered on the
               Closing Date pursuant to a Private Placement Memorandum, the
               Originator shall deliver an Officer's Certificate stating that
               the same information contained in such Private Placement
               Memorandum is true and accurate in all material respects;

          (b)  An Officer's Certificate of the Originator, dated the Closing
               Date, in form satisfactory to and upon which the Purchaser and
               the Underwriters may rely, with respect to certain facts
               regarding the sale of the Mortgage Loans by the Originator to the
               Purchaser;

          (c)  An Opinion of Counsel of the Originator, dated the Closing Date,
               in form satisfactory to and addressed to the Purchaser and the
               Underwriters;

          (d)  Such opinions of counsel from the Purchaser's or Originator's
               counsel as the Rating Agencies may request in connection with the
               sale of the Mortgage

                                      -15-

<PAGE>

               Loans by the Originator to the Purchaser or the Originator's
               execution and delivery of, or performance under, this Agreement
               and upon which the Underwriter may rely;

          (e)  A letter from Deloitte & Touche L.L.P., certified public
               accountants, dated the date hereof and to the effect that they
               have performed certain specified procedures as a result of which
               they determined that certain information of an accounting,
               financial or statistical nature set forth in the Prospectus
               Supplement, under the captions "Summary of Prospectus
               Supplement", "Risk Factors", "The Mortgage Pool", "Yield on the
               Certificates", "Description of the Certificates", and "Pooling
               and Servicing Agreement--The Originator and Master Servicer",
               agrees with the records of the Originator;

          (f)  The Originator shall deliver for inclusion in the Prospectus
               Supplement under the captions "The Mortgage Pool--Underwriting
               Standards; Representations" and "Pooling and Servicing
               Agreement--The Originator and Master Servicer", or for inclusion
               in other offering material such publicly available information
               regarding its financial condition and its mortgage loan
               delinquency, foreclosure and loss experience, underwriting
               standards, lending activities and loan sales, production, and
               servicing and collection practices, and any similar nonpublic,
               unaudited financial information; and

          (g)  Such further information, certificates, opinions and documents as
               the Purchaser or the Underwriters may reasonably request.

          SECTION 10. COSTS. The Originator shall pay (or shall reimburse the
Purchaser or any other Person to the extent that the Purchaser or such other
Person shall pay) all costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including without limitation,
assignment of mortgage recording costs and/or fees for title policy endorsements
and continuations, the fees and expenses of the Originator's in-house
accountants and in-house attorneys, the costs and expenses incurred in
connection with producing the Originator's loan loss, foreclosure and
delinquency experience, and the costs and expenses incurred in connection with
obtaining the documents referred to in Sections 9(d) and 9(e) to the extent such
costs and expenses were not previously paid by the Originator. The Originator
shall pay (or shall reimburse the Purchaser or any other Person to the extent
that the Purchaser or such other Person shall pay) the costs and expenses of
printing (or otherwise reproducing) and delivering this Agreement, the Pooling
and Servicing Agreement, the Certificates, the prospectus, the prospectus
supplement, and the private placement memorandum relating to the Certificates
and other related documents, the initial fees, costs and expenses of the Trustee
relating to the issuance of the initial certification of the Trustee under
Section 2.02 of the Pooling and Servicing Agreement, the fees and expenses of
the Purchaser's counsel in connection with the preparation of all documents
relating to the securitization of the Mortgage Loans, the filing fee charged by
the Securities and Exchange Commission for registration of the Certificates, the
cost of outside special counsel that may be required for the Purchaser, the cost
of obtaining the documents referred to in Section 9(g) and the fees charged by
any rating agency to rate the Certificates. All other costs and expenses in
connection with the transactions contemplated hereunder shall be borne by the
party incurring such expense.

                                      -16-

<PAGE>

          SECTION 11. [RESERVED].

          SECTION 12. [RESERVED].

          SECTION 13. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST. The sale
and delivery on the Closing Date of the Mortgage Loans described on the Mortgage
Loan Schedule in accordance with the terms and conditions of this Agreement is
mandatory. It is specifically understood and agreed that each Mortgage Loan is
unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser in the event of the Originator's failure to deliver
the Mortgage Loans on or before the Closing Date. The Originator hereby grants
to the Purchaser a lien on and a continuing security interest in the
Originator's interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Originator
of its obligation hereunder, and the Originator agrees that it holds such
Mortgage Loans in custody for the Purchaser, subject to the Purchaser's (i)
right, prior to the Closing Date, to reject any Mortgage Loan to the extent
permitted by this Agreement, and (ii) obligation to deliver or cause to be
delivered the consideration for the Mortgage Loans pursuant to Section 8 hereof.
Any Mortgage Loans rejected by the Purchaser shall concurrently therewith be
released from the security interest created hereby. The Originator agrees that,
upon acceptance of the Mortgage Loans by the Purchaser or its designee and
delivery of payment to the Originator, that its security interest in the
Mortgage Loans shall be released. All rights and remedies of the Purchaser under
this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.

          Notwithstanding the foregoing, if on the Closing Date, each of the
conditions set forth in Section 8 hereof shall have been satisfied and the
Purchaser shall not have paid or caused to be paid the Purchase Price, or any
such condition shall not have been waived or satisfied and the Purchaser
determines not to pay or cause to be paid the Purchase Price, the Purchaser
shall immediately effect the redelivery of the Mortgage Loans, if delivery to
the Purchaser has occurred and the security interest created by this Section 13
shall be deemed to have been released.

          SECTION 14. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered to or mailed by registered mail, postage prepaid, or transmitted by
telex or telegraph and confirmed by a similar mailed writing, if to the
Purchaser, addressed to the Purchaser at 1100 Town & Country Road, Suite 1100,
Orange, California 92868, Facsimile: (714) 564-9639, Attention: General Counsel,
or such other address as may hereafter be furnished to the Originator in writing
by the Purchaser; if to the Originator, addressed to the Originator at 1100 Town
& Country Road, Suite 1100, Orange, California 92868, Facsimile: (714) 564-9639,
Attention: General Counsel, or to such other address as the Originator may
designate in writing to the Purchaser.

          SECTION 15. SEVERABILITY OF PROVISIONS. Any part, provision,
representation or warranty of this Agreement which is prohibited or which is
held to be void or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof. Any part, provision, representation or warranty of this Agreement which
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall, as to such

                                      -17-

<PAGE>

jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof.

          SECTION 16. AGREEMENT OF PARTIES. The Originator and the Purchaser
agree to execute and deliver such instruments and take such actions as either of
the others may, from time to time, reasonably request in order to effectuate the
purpose and to carry out the terms of this Agreement and the Pooling and
Servicing Agreement.

          SECTION 17. SURVIVAL. The Originator agrees that the representations,
warranties and agreements made by it herein and in any certificate or other
instrument delivered pursuant hereto shall be deemed to be relied upon by the
Purchaser, notwithstanding any investigation heretofore or hereafter made by the
Purchaser or on its behalf, and that the representations, warranties and
agreements made by the Originator herein or in any such certificate or other
instrument shall survive the delivery of and payment for the Mortgage Loans and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Pooling and Servicing Agreement or the Trust
Fund.

          SECTION 18. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS, DUTIES,
OBLIGATIONS AND RESPONSIBILITIES OF THE PARTIES HERETO SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS (EXCLUDING THE CHOICE OF LAW PROVISIONS)
AND DECISIONS OF THE STATE OF NEW YORK. THE PARTIES HERETO INTEND THAT THE
PROVISIONS OF SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY
TO THIS AGREEMENT.

          SECTION 19. MISCELLANEOUS. This Agreement may be executed in two or
more counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns. This Agreement
supersedes all prior agreements and understandings relating to the subject
matter hereof. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against whom enforcement of the change, waiver, discharge or
termination is sought. The headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.

          It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Originator to the Purchaser as provided in Section 4
hereof be, and be construed as, a sale of the Mortgage Loans by the Originator
to the Purchaser and not as a pledge of the Mortgage Loans by the Originator to
the Purchaser to secure a debt or other obligation of the Originator. However,
in the event that, notwithstanding the aforementioned intent of the parties, the
Mortgage Loans are held to be property of the Originator, then, (a) it is the
express intent of the parties that such conveyance be deemed a pledge of the
Mortgage Loans by the Originator to the Purchaser to secure a debt or other
obligation of the Originator and (b) (1) this Agreement shall also be deemed to
be a

                                      -18-

<PAGE>

security agreement within the meaning of Articles 8 and 9 of the New York
Uniform Commercial Code; (2) the conveyance provided for in Section 4 hereof
shall be deemed to be a grant by the Originator to the Purchaser of a security
interest in all of the Originator's right, title and interest in and to the
Mortgage Loans and all amounts payable to the holders of the Mortgage Loans in
accordance with the terms thereof and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts, other than investment
earnings, from time to time held or invested in the Collection Account whether
in the form of cash, instruments, securities or other property; (3) the
possession by the Purchaser or its agent of Mortgage Notes, the related
Mortgages and such other items of property that constitute instruments, money,
negotiable documents or chattel paper shall be deemed to be "possession" for
purposes of perfecting the security interest pursuant to the New York Uniform
Commercial Code; and (4) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, financial intermediaries, bailees or agents (as applicable) of the
Purchaser for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Purchaser pursuant to Section 4(d)
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Originator and the Purchaser shall, to the extent consistent with
this Agreement, take such actions as may be necessary to ensure that, if this
Agreement were deemed to create a security interest in the Mortgage Loans, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement and the Pooling and Servicing Agreement.

                                      -19-

<PAGE>

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

                                            AMERIQUEST MORTGAGE SECURITIES INC.

                                            By:________________________________
                                            Name:
                                            Title:

                                            AMERIQUEST MORTGAGE COMPANY

                                            By:________________________________
                                            Name:
                                            Title:

<PAGE>

                                   EXHIBIT E-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

         Name of Mortgagor:  ______________________________

         Master Servicer
         Loan No.:           ______________________________

TRUSTEE

         Name:               ______________________________

         Address:            ______________________________
                             ______________________________

         Trustee Mortgage
         File No.:           ______________________________

DEPOSITOR

         Name:               AMERIQUEST MORTGAGE SECURITIES INC.

         Address:            ______________________________

         Certificates:       Asset-Backed Pass-Through
                             Certificates, Series 2003-AR1.

          The undersigned Master Servicer hereby acknowledges that it has
received from _______________________, as Trustee for the Holders of
Asset-Backed Pass-Through Certificates, Series 2003-AR1, the documents referred
to below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement, dated as of January 1, 2003, among the Trustee, the
Depositor and the Master Servicer (the "Pooling and Servicing Agreement").

( )    Promissory Note dated _______________, 20__, in the original principal
       sum of $__________, made by _____________________, payable to, or
       endorsed to the order of, the Trustee.

                                      E-1-1

<PAGE>

( )    Mortgage recorded on _________________________ as instrument no.
       ____________________ in the County Recorder's Office of the County of
       _______________, State of __________________ in book/reel/docket
       _________________ of official records at page/image _____________.

( )    Deed of Trust recorded on ___________________ as instrument no.
       ________________ in the County Recorder's Office of the County of
       _________________, State of ____________________ in book/reel/docket
       _________________ of official records at page/image ______________.

( )    Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
       __________________ as instrument no. _________ in the County Recorder's
       Office of the County of _______________, State of _______________________
       in book/reel/docket ____________ of official records at page/image
       ____________.

( )    Other documents, including any amendments, assignments or other
       assumptions of the Mortgage Note or Mortgage.

( )    ___________________________________________

( )    ___________________________________________

( )    ___________________________________________

( )    ___________________________________________

               The undersigned Master Servicer hereby acknowledges and agrees as
follows:

               (1) The Master Servicer shall hold and retain possession of the
Documents in trust for the benefit of the Trustee, solely for the purposes
provided in the Agreement.

               (2) The Master Servicer shall not cause or permit the Documents
to become subject to, or encumbered by, any claim, liens, security interest,
charges, writs of attachment or other impositions nor shall the Master Servicer
assert or seek to assert any claims or rights of setoff to or against the
Documents or any proceeds thereof.

               (3) The Master Servicer shall return each and every Document
previously requested from the Mortgage File to the Trustee when the need
therefor no longer exists, unless the Mortgage Loan relating to the Documents
has been liquidated and the proceeds thereof have been remitted to the
Collection Account and except as expressly provided in the Agreement.

               (4) The Documents and any proceeds thereof, including any
proceeds of proceeds, coming into the possession or control of the Master
Servicer shall at all times be earmarked for the account of the Trustee, and the
Master Servicer shall keep the Documents and any proceeds separate and distinct
from all other property in the Master Servicer's possession, custody or control.

                                      E-1-2

<PAGE>

Dated:

                                             [MASTER SERVICER]

                                             By:    ____________________________
                                             Name:
                                             Title:

                                      E-1-3

<PAGE>

                                   EXHIBIT E-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

        OFFICERS' CERTIFICATE AND TRUST RECEIPT ASSET-BACKED PASS-THROUGH
                          CERTIFICATES SERIES 2003-AR1

____________________________________________________ HEREBY CERTIFIES THAT
HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH
BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN
MADE.

LOAN NUMBER:  _______________                   BORROWER'S NAME: _______________

COUNTY: _____________________

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

________________________________                DATED:  ________________________

/ / VICE PRESIDENT

/ / ASSISTANT VICE PRESIDENT

                                      E-2-1

<PAGE>

                                   EXHIBIT F-1

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                                                                  [DATED]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

       Re:   Ameriquest Mortgage Securities Inc., Asset-Backed
             Pass-Through Certificates, Series 2003-AR1, Class ___, representing
             a ___% Class ___ Percentage Interest
             -------------------------------------------------------------------

Ladies and Gentlemen:

     In connection with the transfer by ________________ (the "Transferor") to
________________ (the "Transferee") of the captioned mortgage pass-through
certificates (the "Certificates"), the Transferor hereby certifies as follows:

     Neither the Transferor nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, (e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Pooling and Servicing Agreement, dated as of January 1, 2003, among
Ameriquest Mortgage Securities Inc. as Depositor, Ameriquest Mortgage Company as
Master Servicer and Deutsche Bank National Trust Company as Trustee (the
"Pooling and Servicing Agreement"), pursuant to which Pooling and Servicing
Agreement the Certificates were issued.

                                      F-1-1

<PAGE>

     Capitalized terms used but not defined herein shall have the meanings
assigned thereto in the Pooling and Servicing Agreement.

                                           Very truly yours,

                                           [Transferor]

                                           By:   ______________________________
                                           Name:
                                           Title:

                                      F-1-2

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

                                                   [Date]

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705-4934

         Re:      Ameriquest Mortgage Securities Inc., Asset-Backed
                  Pass-Through Certificates, Series 2003-AR1, Class ___,
                  Representing a ___% Class ___ Percentage Interest
                  ------------------------------------------------------

Ladies and Gentlemen:

In connection with the purchase from ______________________ (the "Transferor")
on the date hereof of the captioned trust certificates (the "Certificates"),
_______________ (the "Transferee") hereby certifies as follows:

          1. The Transferee is a "qualified institutional buyer" as that term is
     defined in Rule 144A ("Rule 144A") under the Securities Act of 1933 (the
     "1933 Act") and has completed either of the forms of certification to that
     effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that
     the sale to it is being made in reliance on Rule 144A. The Transferee is
     acquiring the Certificates for its own account or for the account of a
     qualified institutional buyer, and understands that such Certificate may be
     resold, pledged or transferred only (i) to a person reasonably believed to
     be a qualified institutional buyer that purchases for its own account or
     for the account of a qualified institutional buyer to whom notice is given
     that the resale, pledge or transfer is being made in reliance on Rule 144A,
     or (ii) pursuant to another exemption from registration under the 1933 Act.

          2. The Transferee has been furnished with all information regarding
     (a) the Certificates and distributions thereon, (b) the nature, performance
     and servicing of the Mortgage Loans, (c) the Pooling and Servicing
     Agreement referred to below, and (d) any credit enhancement mechanism
     associated with the Certificates, that it has requested.

                                      F-1-3

<PAGE>

          All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Pooling and Servicing Agreement,
dated as of January 1, 2003, among Ameriquest Mortgage Securities Inc. as
Depositor, Ameriquest Mortgage Company as Master Servicer and Deutsche Bank
National Trust Company as Trustee, pursuant to which the Certificates were
issued.

                                                [TRANSFEREE]

                                                By: ____________________________
                                                Name:
                                                Title:

                                      F-1-4

<PAGE>

                                                          ANNEX 1 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Deutsche Bank National Trust Company as Trustee, with
respect to the mortgage pass-through certificates (the "Certificates") described
in the Transferee Certificate to which this certification relates and to which
this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Transferee owned and/or
invested on a discretionary basis $______________________1 in securities (except
for the excluded securities referred to below) as of the end of the Transferee's
most recent fiscal year (such amount being calculated in accordance with Rule
144A) and (ii) the Transferee satisfies the criteria in the category marked
below.

   ___    CORPORATION, ETC. The Transferee is a corporation (other than a bank,
          savings and loan association or similar institution), Massachusetts or
          similar business trust, partnership, or any organization described in
          Section 501(c)(3) of the Internal Revenue Code of 1986.

   ___    BANK. The Transferee (a) is a national bank or banking institution
          organized under the laws of any State, territory or the District of
          Columbia, the business of which is substantially confined to banking
          and is supervised by the State or territorial banking commission or
          similar official or is a foreign bank or equivalent institution, and
          (b) has an audited net worth of at least $25,000,000 as demonstrated
          in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
          HERETO.

   ___    SAVINGS AND LOAN. The Transferee (a) is a savings and loan
          association, building and loan association, cooperative bank,
          homestead association or similar institution, which is supervised and
          examined by a State or Federal authority having supervision over any
          such institutions or is a foreign savings and loan association or
          equivalent institution and (b) has an audited net worth of at least
          1Transferee must own and/or invest on a discretionary basis at least
          $100,000,000 in securities unless Transferee is a dealer, and, in that
          case, Transferee must own and/or invest on a discretionary basis at
          least $10,000,000 in securities. $25,000,000 as demonstrated in its
          latest annual financial statements, A COPY OF WHICH IS ATTACHED
          HERETO.

                                      F-1-5

<PAGE>

   ___    BROKER-DEALER. The Transferee is a dealer registered pursuant to
          Section 15 of the Securities Exchange Act of 1934.

   ___    INSURANCE COMPANY. The Transferee is an insurance company whose
          primary and predominant business activity is the writing of insurance
          or the reinsuring of risks underwritten by insurance companies and
          which is subject to supervision by the insurance commissioner or a
          similar official or agency of a State, territory or the District of
          Columbia.

   ___    STATE OR LOCAL PLAN. The Transferee is a plan established and
          maintained by a State, its political subdivisions, or any agency or
          instrumentality of the State or its political subdivisions, for the
          benefit of its employees.

   ___    ERISA PLAN. The Transferee is an employee benefit plan within the
          meaning of Title I of the Employee Retirement Income Security Act of
          1974.

   ___    INVESTMENT ADVISOR. The Transferee is an investment advisor registered
          under the Investment Advisers Act of 1940.

          3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.

          4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Transferee, the Transferee
used the cost of such securities to the Transferee and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Transferee may have included securities owned by
subsidiaries of the Transferee, but only if such subsidiaries are consolidated
with the Transferee in its financial statements prepared in accordance with
generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Transferee's direction. However, such
securities were not included if the Transferee is a majority-owned, consolidated
subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.

          5. The Transferee acknowledges that it is familiar with Rule 144A and
understands that the Transferor and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Transferee may be in reliance on Rule 144A.

     _____     _____     Will the Transferee be purchasing the Certificates
     Yes      No         only for the Transferee's own account?

                                      F-1-6

<PAGE>

          6. If the answer to the foregoing question is "no", the Transferee
agrees that, in connection with any purchase of securities sold to the
Transferee for the account of a third party (including any separate account) in
reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.

          7. The Transferee will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification as of the date of such
purchase. In addition, if the Transferee is a bank or savings and loan as
provided above, the Transferee agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.

Dated:

                                            Print Name of Transferee

                                            By:    _____________________________
                                            Name:
                                            Title:

                                      F-1-7

<PAGE>

                                                          ANNEX 2 TO EXHIBIT F-1
                                                          ----------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That Are Registered Investment Companies]

          The undersigned hereby certifies as follows to [name of Transferor]
(the "Transferor") and Deutsche Bank National Trust Company, as Trustee, with
respect to the mortgage pass-through certificates (the "Certificates") described
in the Transferee Certificate to which this certification relates and to which
this certification is an Annex:

          1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").

          2. In connection with purchases by the Transferee, the Transferee is a
"qualified institutional buyer" as defined in Rule 144A because (i) the
Transferee is an investment company registered under the Investment Company Act
of 1940, and (ii) as marked below, the Transferee alone, or the Transferee's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year. For purposes of determining the amount of
securities owned by the Transferee or the Transferee's Family of Investment
Companies, the cost of such securities was used.

   ____   The Transferee owned $___________________ in securities (other than
          the excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

   ____   The Transferee is part of a Family of Investment Companies which owned
          in the aggregate $______________ in securities (other than the
          excluded securities referred to below) as of the end of the
          Transferee's most recent fiscal year (such amount being calculated in
          accordance with Rule 144A).

          3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

          4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.

                                      F-1-8

<PAGE>

          5. The Transferee is familiar with Rule 144A and understands that the
parties to which this certification is being made are relying and will continue
to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.

          6. The undersigned will notify the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice, the Transferee's purchase of the Certificates will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.

Dated:

                                            Print Name of Transferee or Advisor

                                            By:      ___________________________
                                            Name:
                                            Title:

                                            IF AN ADVISER:

                                            ____________________________________
                                            Print Name of Transferee

                                      F-1-9

<PAGE>

                    FORM OF TRANSFEREE REPRESENTATION LETTER

          The undersigned hereby certifies on behalf of the purchaser named
below (the "Purchaser") as follows:

          1. I am an executive officer of the Purchaser.

          2. The Purchaser is a "qualified institutional buyer", as defined in
     Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.

     3.   As of the date specified below (which is not earlier than the last day
     of the Purchaser's most recent fiscal year), the amount of "securities",
     computed for purposes of Rule 144A, owned and invested on a discretionary
     basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser        _______________________________________________________

By:      (Signature)     _______________________________________________________

Name of Signatory        _______________________________________________________

Title    _______________________________________________________________________

Date of this certificate _______________________________________________________

Date of information provided in paragraph 3 ____________________________________

                                     F-1-10

<PAGE>

                                   EXHIBIT F-2

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF NEW YORK             )
                              : ss.:
COUNTY OF NEW YORK            )

          ____________________________, being duly sworn, deposes, represents
and warrants as follows:

          1. I am a ______________________ of ____________________________ (the
"Owner") a corporation duly organized and existing under the laws of
______________, the record owner of Ameriquest Mortgage Securities Inc.,
Asset-Backed Pass-Through Certificates, Series 2003-AR1, [Class R] (the "Class R
Certificates"), on behalf of whom I make this affidavit and agreement.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Pooling and Servicing Agreement pursuant to which the
Class R Certificates were issued.

          2. The Owner (i) is and will be a "Permitted Transferee" as of
____________________, 2003 and (ii) is acquiring the Class R Certificates for
its own account or for the account of another Owner from which it has received
an affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.

          3. The Owner is aware (i) of the tax that would be imposed on
transfers of the Class R Certificates to disqualified organizations under the
Internal Revenue Code of 1986 that applies to all transfers of the Class R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
or, if such transfer is through an agent (which person includes a broker,
nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that
the person otherwise liable for the tax shall be relieved of liability for the
tax if the transferee furnishes to such person an affidavit that the transferee
is a Permitted Transferee and, at the time of transfer, such person does not
have actual knowledge that the affidavit is false; and (iv) that each of the
Class R Certificates may be a "noneconomic residual interest" within the meaning
of proposed Treasury regulations promulgated under the Code and that the
transferor of a "noneconomic residual interest" will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer is to impede the assessment or collection of tax.

                                      F-2-1

<PAGE>

          4. The Owner is aware of the tax imposed on a "pass-through entity"
holding the Class R Certificates if, at any time during the taxable year of the
pass-through entity, a non-Permitted Transferee is the record holder of an
interest in such entity. (For this purpose, a "pass-through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

          5. The Owner is aware that the Certificate Registrar will not register
the transfer of any Class R Certificate unless the transferee, or the
transferee's agent, delivers to the Certificate Registrar, among other things,
an affidavit in substantially the same form as this affidavit. The Owner
expressly agrees that it will not consummate any such transfer if it knows or
believes that any of the representations contained in such affidavit and
agreement are false.

          6. The Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R Certificates will only be owned, directly
or indirectly, by an Owner that is a Permitted Transferee.

          7. The Owner's taxpayer identification number is ____________.

          8. The Owner has reviewed the restrictions set forth on the face of
the Class R Certificates and the provisions of Section 5.02(d) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clauses (iii)(A) and (iii)(B) of Section 5.02(d) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 5.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.

          9. The Owner is not acquiring and will not transfer the Class R
Certificates in order to impede the assessment or collection of any tax.

          10. The Owner anticipates that it will, so long as it holds the Class
R Certificates, have sufficient assets to pay any taxes owed by the holder of
such Class R Certificates, and hereby represents to and for the benefit of the
person from whom it acquired the Class R Certificates that the Owner intends to
pay taxes associated with holding such Class R Certificates as they become due,
fully understanding that it may incur tax liabilities in excess of any cash
flows generated by the Class R Certificates.

          11. The Owner has no present knowledge that it may become insolvent or
subject to a bankruptcy proceeding for so long as it holds the Class R
Certificates.

          12. The Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding.

          13. The Owner is not acquiring the Class R Certificates with the
intent to transfer the Class R Certificates to any person or entity that will
not have sufficient assets to pay any taxes

                                      F-2-2

<PAGE>

owed by the holder of such Class R Certificates, or that may become insolvent or
subject to a bankruptcy proceeding, for so long as the Class R Certificates
remain outstanding.

          14. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, obtain from its transferee the representations
required by Section 5.02(d) of the Pooling and Servicing Agreement under which
the Class R Certificate were issued and will not consummate any such transfer if
it knows, or knows facts that should lead it to believe, that any such
representations are false.

          15. The Owner will, in connection with any transfer that it makes of
the Class R Certificates, deliver to the Certificate Registrar an affidavit,
which represents and warrants that it is not transferring the Class R
Certificates to impede the assessment or collection of any tax and that it has
no actual knowledge that the proposed transferee: (i) has insufficient assets to
pay any taxes owed by such transferee as holder of the Class R Certificates;
(ii) may become insolvent or subject to a bankruptcy proceeding for so long as
the Class R Certificates remains outstanding; and (iii) is not a "Permitted
Transferee".

          16. The Owner is a citizen or resident of the United States, a
corporation or partnership (or other entity treated as a corporation or
partnership for federal income tax purposes) created or organized in, or under
the laws of, the United States, any state thereof or the District of Columbia
(except, in the case of a partnership or entity treated as a partnership, to the
extent provided in regulations), an estate the income of which is subject to
United States federal income taxation regardless of its source or a trust other
than a "foreign trust" described in section 7701(a)(31) of the Code.

                                      F-2-3

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
__________, 200__.

                                                [OWNER]

                                                By:    _________________________
                                                Name:
                                                Title: [Vice] President

ATTEST:

By:    _______________________
Name:
Title: [Assistant] Secretary

          Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.

          Subscribed and sworn before me this ____ day of __________, 200__.

                                                ______________________________
                                                         Notary Public

                                                County of _____________________
                                                State of ______________________

                                                My Commission expires:

                                      F-2-4

<PAGE>

                          FORM OF TRANSFEROR AFFIDAVIT

STATE OF NEW YORK         )
                          : ss. :
COUNTY OF NEW YORK        )

          _______________________________________, being duly sworn, deposes,
represents and warrants _____________________________ as follows:

          1. I am a ____________________ of (the "Owner"), a corporation duly
organized and existing under the laws of ______________, on behalf of whom I
make this affidavit.

          2. The Owner is not transferring the [Class R] (the "Residual
Certificates") to impede the assessment or collection of any tax.

          3. The Owner has no actual knowledge that the Person that is the
proposed transferee (the "Purchaser") of the Residual Certificates: (i) has
insufficient assets to pay any taxes owed by such proposed transferee as holder
of the Residual Certificates; (ii) may become insolvent or subject to a
bankruptcy proceeding for so long as the Residual Certificates remain
outstanding and (iii) is not a Permitted Transferee.

          4. The Owner understands that the Purchaser has delivered to the
Certificate Registrar a transfer affidavit and agreement in the form attached to
the Pooling and Servicing Agreement as Exhibit F-2. The Owner does not know or
believe that any representation contained therein is false.

          5. At the time of transfer, the Owner has conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E- 1(c)(4)(i) and, as a result of that
investigation, the Owner has determined that the Purchaser has historically paid
its debts as they became due and has found no significant evidence to indicate
that the Purchaser will not continue to pay its debts as they become due in the
future. The Owner understands that the transfer of a Residual Certificate may
not be respected for United States income tax purposes (and the Owner may
continue to be liable for United States income taxes associated therewith)
unless the Owner has conducted such an investigation.

          6. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Pooling and Servicing Agreement.

                                      F-2-5

<PAGE>

          IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Vice] President, attested by its [Assistant] Secretary, this ____ day of
___________, 200__.

                                                [OWNER]

                                                By:    _________________________
                                                Name:
                                                Title: [Vice] President

ATTEST:

By:      _________________________
Name:
Title:   [Assistant] Secretary

          Personally appeared before me the above-named , known or proved to me
to be the same person who executed the foregoing instrument and to be a [Vice]
President of the Owner, and acknowledged to me that [he/she] executed the same
as [his/her] free act and deed and the free act and deed of the Owner.

          Subscribed and sworn before me this ____ day of __________, 200__.

                                                ______________________________
                                                          Notary Public

                                                County of  _____________________
                                                State of _______________________

                                                My Commission expires:

                                      F-2-6

<PAGE>

                                    EXHIBIT G

            FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE

                                                         _____________, 200__

Ameriquest Mortgage Securities Inc.         Deutsche Bank National Trust Company
1100 Town & Country Road                    1761 East St. Andrew Place
Orange, California 92868                    Santa Ana, California 92705-4934
Ameriquest Mortgage Company
1100 Town & Country Road
Orange, California 92868

                    Re:   Ameriquest Mortgage Securities Inc.
                          Asset-Backed Pass-Through Certificates,
                          Series 2003-AR1, Class [CE], [P], [R]
                          ---------------------------------------

Dear Ladies and Gentlemen:

          __________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") $____________ Initial
Certificate Principal Balance of Ameriquest Mortgage Securities Inc.,
Asset-Backed Pass-Through Certificates, Series 2003-AR1, Class ___ (the
"Certificates"), issued pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement") dated as of January 1, 2003 among Ameriquest
Mortgage Securities Inc. as depositor (the "Depositor"), Ameriquest Mortgage
Company as master servicer (the "Master Servicer") and Deutsche Bank National
Trust Company as trustee (the "Trustee"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned thereto in the Pooling and
Servicing Agreement. The Transferee hereby certifies, represents and warrants
to, and covenants with the Depositor, the Trustee and the Master Servicer that
the following statements in either (1) or (2) are accurate:

          The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a
"Plan"), (ii) are not being acquired with "plan assets" of a Plan within the
meaning of the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be investing
in plan assets within the meaning of the DOL regulation at 29
C.F.R.ss.2510.3-101.

                                                Very truly yours,

                                                By: ___________________________
                                                Name:
                                                Title:

                                       G-1

<PAGE>

                                    EXHIBIT H

                              FORM OF CAP CONTRACTS

                             Available Upon Request

                                       H-1

<PAGE>

                                    EXHIBIT I

                           LOSS MITIGATION ACTION PLAN

DEFAULT MITIGATION ACTION                      SUPPORTING STANDARDS
--------------------------------------------------------------------------------
Forbearance Workout                            Borrower documents a temporary
-------------------                            financial hardship resulting in
Defer any of the following:                    request for a forbearance
1.accrued interest                             Borrower documents financial
2.past due principal                           ability to pay under the proposed
3.escrow advances                              forbearance terms
4.corporate advances                           Borrower expresses a willingness
5.ancillary fees                               to perform.
6.any combination of the above                 Current monthly payments are
                                               scheduled to be made prior to
                                               late charge date during the
                                               forbearance term

--------------------------------------------------------------------------------
Loan Modification Workout                      Borrower documents a non-
-------------------------                      temporary financial hardship
Any of the following:                          resulting in the request for a
1.waive accrued interest                       loan modification
2.waive past due principal                     Borrower documents financial
3.waive corporate advances                     ability to pay under the proposed
4.waive ancillary fees                         loan modification terms
5.reduce principal                             Borrower does not have the
6.reduce interest rate                         ability to pay under the original
7.any combination of the above items           loan terms
8.any combination with the Forbearance items   Borrower expresses a willingness
                                               to perform
                                               No waiver of escrow advances
                                               (taxes and insurance) is allowed

--------------------------------------------------------------------------------
Short Sale Disposal                            Sale to a third party
-------------------                            Independent appraisal supports
Waive or negotiate a reduced amount of any     sale price
of the following:                              No cash to seller (borrower),
1.accrued interest                             excluding costs necessary to
2.principal                                    close
3.escrow advances                              Borrower does not have the
4.corporate advances                           ability and/or willingness to pay
5.ancillary fees                               Borrower no longer wants property
6.prepayment charges
7.any combination of the above items

--------------------------------------------------------------------------------
Short Pay-off Disposal                         Refinance by independent third
----------------------                         party Lender
Waive or negotiate a reduced amount of any     Independent appraisal supports
of the following:                              new loan amount
1.accrued interest                             New loan is no cash out (i.e. no
2.principal                                    cash to borrower excluding costs
3.escrow advances                              necessary to close)
4.corporate advances                           Borrower has expressed his/her
5.ancillary fees                               unwillingness to pay
6.prepayment charges                           Anticipated refinance time frame
7.any combination of the above items           is less than anticipated
                                               foreclosure time frame

                                       K-1

<PAGE>

DEFAULT MITIGATION ACTION                      SUPPORTING STANDARDS
--------------------------------------------------------------------------------
Deed-in-lieu Disposal                          Borrower has already or will
                                               abandon the property or is
                                               willing to vacate the property
                                               (in a broom sweep condition) on a
                                               mutually agreeable date
                                               Borrower does not have the
                                               ability and/or willingness to pay
                                               Independent appraisal confirms
                                               property has a value
                                               Title is clean
                                               Property appears to be resalable
                                               based on condition and value
                                               shown in independent appraisal
                                               Property does not appear to have
                                               any environmental or hazardous
                                               conditions (or such conditions
                                               appear to be curable)

--------------------------------------------------------------------------------
FORECLOSURE DISPOSAL                           Borrower has already or will
                                               abandon the property (which may
                                               be by an eviction proceeding or
                                               mutual agreement)
                                               Borrower does not have the
                                               ability and/or willingness to pay
                                               Independent appraisal confirms
                                               property has a value
                                               Property appears to be resalable
                                               based on condition and value
                                               shown in independent appraisal
                                               Property does not appear to have
                                               any environmental or hazardous
                                               conditions (or such conditions
                                               appear to be curable)
--------------------------------------------------------------------------------

Workouts in the form of either a Forbearance or Loan Modification require that
the Borrower document the existence of a financial hardship leading to the
payment delinquency and document the ability to make the payments required under
the proposed Forbearance or Loan Modification. If the Borrower fails to meet
both of these conditions or the Borrower is uncooperative, a Disposal Loss
Mitigation Action will be employed to liquidate the delinquent loan, assuming
the Borrower does not otherwise cure the existing default. Each of the Default
Mitigation Actions and Supporting Standards may not be applicable to each and
every loan subject to a default in its monthly payments and in those cases where
a Default Mitigation Action or Supporting Standard may be applicable, each is
subject to amendment and/or waiver on an individual basis pursuant to applicable
federal, state and local laws, decisional authorities, court orders,
instructions of regulatory and/or other governmental authorities, the advice of
legal counsel, instructions from the Trustee and changes in the loan servicing
standards.

                                       K-2

<PAGE>

                                   EXHIBIT J-1

        FORM CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K

          Re:   Ameriquest Mortgage Securities Inc., Series 2003-AR1
                Asset-Backed Certificates, Series 2003-AR1

          I, John Grazer, the senior officer of Ameriquest Mortgage Securities
Inc. (the "Registrant") in charge of securitizations, certify that:

          l. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution and servicing reports filed in respect of
periods included in the year covered by this annual report, of Registrant;

          2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;

          3. Based on my knowledge, the distribution information and the
servicing information required to be provided to the Trustee by the Master
Servicer under the Pooling and Servicing Agreement is included in these reports;

          4. I am responsible for reviewing the activities performed by the
Master Servicer under the Pooling and Servicing Agreement and based upon the
review required under the Pooling and Servicing Agreement, and except as
disclosed in the report, the Master Servicer has fulfilled its obligations under
the Pooling and Servicing Agreement; and

          5. I have disclosed to the Registrant's certified public accountants
all significant deficiencies relating to the Master Servicer's compliance with
the minimum servicing standards in accordance with a review conducted in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar standard as set forth in the Pooling and Servicing Agreement.

          Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated January 1, 2003
(the "Pooling and Servicing Agreement"), among the Registrant as depositor,
Ameriquest Mortgage Company as master servicer and Deutsche Bank National Trust
Company as trustee.

                                             AMERIQUEST MORTGAGE SECURITIES INC.

                                             By:________________________________
                                             Name:
                                             Title:
                                             Date:

                                       K-3

<PAGE>

                                   EXHIBIT J-2

                            FORM CERTIFICATION TO BE
                      PROVIDED TO DEPOSITOR BY THE TRUSTEE

         Re:    Ameriquest Mortgage Securities Inc., Series 2003-AR1
                Asset-Backed Certificates, Series 2003-AR1

          I, [identify the certifying individual], a [title] of Deutsche Bank
National Trust Company, as Trustee, hereby certify to Ameriquest Mortgage
Securities Inc. (the "Depositor"), and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

          1. I have reviewed the annual report on Form 10-K for the fiscal year
[___], and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;

          2. Based on my knowledge, the information in these distribution
reports prepared by the Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and

          3. Based on my knowledge, the distribution information required to be
provided by the Trustee under the Pooling and Servicing Agreement is included in
these distribution reports.

          Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated January 1, 2003
(the "Pooling and Servicing Agreement"), among the Registrant as depositor,
Ameriquest Mortgage Company as master servicer and Deutsche Bank National Trust
Company as trustee.

                                            DEUTSCHE BANK NATIONAL TRUST
                                            COMPANY, as Trustee

                                            By:_______________________________
                                            Name:
                                            Title:
                                            Date:

                                       K-1

<PAGE>

                                    EXHIBIT K

                     FORM OF NOTICE FOR LOCATION OF ACCOUNTS

                                               January ___, 2003

Ameriquest Mortgage Securities Inc.
1100 Town & Country Road, Suite 1100
Orange, California 92868
Attn: General Counsel

[NIMS INSURER]

            Re:  Pooling and Servicing Agreement (the "Pooling and
                 Servicing Agreement"), dated as of January 1, 2003
                 among Ameriquest Mortgage Securities Inc., as
                 Depositor, Ameriquest Mortgage Company, as Seller and
                 Master Servicer, and Deutsche Bank National Trust
                 Company, as Trustee, with respect to Ameriquest
                 Mortgage Securities Inc., Series 2003-AR1
                 -----------------------------------------------------

Dear Sirs:

          Pursuant to Section 3.04(i) of the above referenced Pooling and
Servicing Agreement you are hereby notified of the location and the date of
establishment of the following accounts:

          Distribution Account and the Net WAC Rate Carryover Reserve Account.

          The accounts were established on____________________, 2003, are held
at Deutsche Bank National Trust Company in New York, New York, and are
maintained by Deutsche Bank National Trust Company at 1761 East St. Andrew
Place, Santa Ana, California 92705.

          If you should have any questions, please feel free to contact me at
(714) 247- _______.

                                               Very truly yours,

                                               DEUTSCHE BANK NATIONAL TRUST
                                               COMPANY

                                               By:______________________________
                                               Name:
                                               Title:

                                       K-2

<PAGE>

                     FORM OF NOTICE FOR LOCATION OF ACCOUNTS

                                                 January ___, 2003

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705

[NIMS INSURER]

            Re:  Pooling and Servicing Agreement (the "Pooling and
                 Servicing Agreement"), dated as of January 1, 2003
                 among Ameriquest Mortgage Securities Inc., as
                 Depositor, Ameriquest Mortgage Company, as Seller and
                 Master Servicer and Deutsche Bank National Trust
                 Company, as Trustee, with respect to Ameriquest
                 Mortgage Securities Inc., Series 2003-AR1
                 -----------------------------------------------------

Dear Sirs:

          Pursuant to Section 3.04(i) of the above referenced Pooling and
Servicing Agreement you are hereby notified of the location and the date of
establishment of the following account:

          Collection Account

          The accounts were established on____________________, 2003, are held
at Ameriquest Mortgage Company in Orange, California, and are maintained by
Ameriquest Mortgage Company at 1100 Town & Country Road, Suite 1100.

                                       K-3

<PAGE>

          If you should have any questions, please feel free to contact me at
(714) 564-____.

                                               Very truly yours,

                                               AMERIQUEST MORTGAGE COMPANY

                                               By:______________________________
                                               Name:
                                               Title:

                                       K-4

<PAGE>

                                   SCHEDULE 1

                             MORTGAGE LOAN SCHEDULE

                             Available Upon Request

                                  Schedule-1-1

<PAGE>

                                   SCHEDULE 2

                           PREPAYMENT CHARGE SCHEDULE

                             Available Upon Request

                                  Schedule-2-1

<PAGE>

                                   SCHEDULE 3

                               PMI MORTGAGE LOANS

                             Available Upon Request

                                  Schedule 3-1================================================================================

                                  CWABS, INC.,

                                    Depositor

                          COUNTRYWIDE HOME LOANS, INC.,

                                     Seller

                      COUNTRYWIDE HOME LOANS SERVICING LP,

                                 Master Servicer

                                       and

                              THE BANK OF NEW YORK,

                                     Trustee

                                       and

                           BNY WESTERN TRUST COMPANY,

                                   Co-Trustee

                     ______________________________________

                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2003
                     ______________________________________

                   ASSET-BACKED CERTIFICATES, SERIES 2003-BC1

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

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                                                               PAGE
                                                                                                               ----
<S>                                                                                                            <C>

                                                      ARTICLE I. DEFINITIONS 3

Section 1.01.         Defined Terms. 3

                            ARTICLE II. CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES 44

Section 2.01.         Conveyance of Mortgage Loans. 44
Section 2.02.         Acceptance of the Mortgage Loans. 48
Section 2.03.         Representations, Warranties and Covenants of the Master Servicer and the Seller. 50
Section 2.04.         Representations and Warranties of the Depositor. 65
Section 2.05.         Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases. 66
Section 2.06.         Authentication and Delivery of Certificates. 67
Section 2.07.         Covenants of the Master Servicer. 67

                                   ARTICLE III. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS 69

Section 3.01.         Master Servicer to Service Mortgage Loans. 69
Section 3.02.         Subservicing; Enforcement of the Obligations of Master Servicer. 70
Section 3.03.         Rights of the Depositor, the Seller and the Trustee in Respect of the Master Servicer. 71
Section 3.04.         Trustee to Act as Master Servicer. 71
Section 3.05.         Collection of Mortgage Loan Payments; Certificate Account; Distribution Account; Seller Shortfall
                      Interest Requirement. 72
Section 3.06.         Collection of Taxes, Assessments and Similar Items; Escrow Accounts. 75
Section 3.07.         Access to Certain Documentation and Information Regarding the Mortgage Loans. 76
Section 3.08.         Permitted Withdrawals from the Certificate Account, Distribution Account and the Carryover Reserve
                      Fund. 76
Section 3.09.         [Reserved.] 78
Section 3.10.         Maintenance of Hazard Insurance. 78
Section 3.11.         Enforcement of Due-On-Sale Clauses; Assumption Agreements. 79
Section 3.12.         Realization Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and Realized Losses;
                      Repurchase of Certain Mortgage Loans. 80
Section 3.13.         Co-Trustee to Cooperate; Release of Mortgage Files. 83

                                       i

<PAGE>

Section 3.14.         Documents, Records and Funds in Possession of Master Servicer to be Held for the Trustee. 84
Section 3.15.         Servicing Compensation. 85
Section 3.16.         Access to Certain Documentation. 85
Section 3.17.         Annual Statement as to Compliance. 85
Section 3.18.         Annual Independent Public Accountants' Servicing Statement; Financial Statements. 86
Section 3.19.         The Cap Contract. 86

                                  ARTICLE IV. DISTRIBUTIONS AND ADVANCES BY THE MASTER SERVICER 88

Section 4.01.         Advances. 88
Section 4.02.         Reduction of Servicing Compensation in Connection with Prepayment Interest Shortfalls. 88
Section 4.03.         [Reserved] 89
Section 4.04.         Distributions. 89
Section 4.05.         Monthly Statements to Certificateholders. 92
Section 4.06.         [Reserved] 95
Section 4.07.         [Reserved] 95
Section 4.08.         Carryover Reserve Fund. 95
Section 4.09.         Distributions on the REMIC I Regular Interests. 96
Section 4.10.         Distributions on the REMIC II Regular Interests 97
Section 4.11.         Allocation of Realized Losses on the REMIC I and REMIC II Regular Interests. 98
Section 4.12.         Termination of the Mortgage Insurance Policy. 99

                                                  ARTICLE V. THE CERTIFICATES 100

Section 5.01.         The Certificates. 100
Section 5.02.         Certificate Register; Registration of Transfer and Exchange of Certificates. 100
Section 5.03.         Mutilated, Destroyed, Lost or Stolen Certificates. 104
Section 5.04.         Persons Deemed Owners. 105
Section 5.05.         Access to List of Certificateholders' Names and Addresses. 105
Section 5.06.         Book-Entry Certificates. 105
Section 5.07.         Notices to Depository. 106
Section 5.08.         Definitive Certificates. 106
Section 5.09.         Maintenance of Office or Agency. 107

                                 ARTICLE VI. THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER 108

Section 6.01.         Respective Liabilities of the Depositor, the Master Servicer and the Seller. 108

                                       ii

<PAGE>

Section 6.02.         Merger or Consolidation of the Depositor, the Master Servicer or the Seller. 108
Section 6.03.         Limitation on Liability of the Depositor, the Seller, the Master Servicer and Others. 108
Section 6.04.         Limitation on Resignation of Master Servicer. 109
Section 6.05.         Errors and Omissions Insurance; Fidelity Bonds. 109

                                      ARTICLE VII. DEFAULT; TERMINATION OF MASTER SERVICER 111

Section 7.01.         Events of Default. 111
Section 7.02.         Trustee to Act; Appointment of Successor. 112
Section 7.03.         Notification to Certificateholders. 114

                                    ARTICLE VIII. CONCERNING THE TRUSTEE AND THE CO-TRUSTEE 115

Section 8.01.         Duties of Trustee. 115
Section 8.02.         Certain Matters Affecting the Trustee. 116
Section 8.03.         Trustee Not Liable for Mortgage Loans. 117
Section 8.04.         Trustee May Own Certificates. 117
Section 8.05.         Master Servicer to Pay Trustee's Fees and Expenses. 117
Section 8.06.         Eligibility Requirements for Trustee. 118
Section 8.07.         Resignation and Removal of Trustee. 118
Section 8.08.         Successor Trustee. 119
Section 8.09.         Merger or Consolidation of Trustee. 120
Section 8.10.         Appointment of Co-Trustee or Separate Trustee. 120
Section 8.11.         Tax Matters. 121
Section 8.12.         Co-Trustee. 123

                                                    ARTICLE IX. TERMINATION 127

Section 9.01.         Termination upon Liquidation or Repurchase of all Mortgage Loans. 127
Section 9.02.         Final Distribution on the Certificates. 127
Section 9.03.         Additional Termination Requirements. 129

                                              ARTICLE X. MISCELLANEOUS PROVISIONS 130

Section 10.01.        Amendment. 130
Section 10.02.        Recordation of Agreement; Counterparts. 131
Section 10.03.        Governing Law. 131
Section 10.04.        Intention of Parties. 132
Section 10.05.        Notices. 132
Section 10.06.        Severability of Provisions. 133
Section 10.07.        Assignment. 134

                                      iii

<PAGE>

Section 10.08.        Limitation on Rights of Certificateholders. 134
Section 10.09.        Inspection and Audit Rights. 135
Section 10.10.        Certificates Nonassessable and Fully Paid. 135
</TABLE>

                                    EXHIBITS

EXHIBIT A-1       Form of Class A-1 Certificate
EXHIBIT A-2       Form of Class A-IO Certificate
EXHIBIT A-3       Form of Class M-1 Certificate
EXHIBIT A-4       Form of Class M-2 Certificate
EXHIBIT A-5       Form of Class B-1 Certificate
EXHIBIT B         Form of Class C Certificate
EXHIBIT C         Form of Class P Certificate
EXHIBIT D         Form of Class A-R Certificate
EXHIBIT E         Form of Tax Matters Person Certificate
EXHIBIT F         Mortgage Loan Schedules
EXHIBIT F-1       List of Mortgage Loans
EXHIBIT F-2       Mortgage Loans for which All or a Portion of
                   a Related Mortgage File is not Delivered to the
                   Co-Trustee on or prior to the Closing Date
EXHIBIT G         Forms of Certification of Trustee
EXHIBIT G-1       Form of Initial Certification of Trustee
EXHIBIT G-2       Form of Interim Certification of Trustee
EXHIBIT G-3       Form of Delay Delivery Certification
EXHIBIT G-4       [Reserved]
EXHIBIT H         Form of Final Certification of Trustee
EXHIBIT I         Transfer Affidavit
EXHIBIT J-1       Form of Transferor Certificate for Class A-R Certificates
EXHIBIT J-2       Form of Transferor Certificate for Private Certificates
EXHIBIT K         Form of Investment Letter (Non-Rule 144A)
EXHIBIT L         Form of Rule 144A Letter
EXHIBIT M         Request for Release (for Co-Trustee)
EXHIBIT N         Request for Release (for Mortgage Loans Paid in
                   Full, Repurchased or Replaced)
EXHIBIT O         Copy of Depositary Agreement
EXHIBIT P         Form of Mortgage Note and Mortgage
EXHIBIT Q         [reserved]
EXHIBIT R         Form of Cap Contract
EXHIBIT S         Form of Cap Contract Assignment Agreement

                                       iv

<PAGE>

                  POOLING AND SERVICING AGREEMENT, dated as of January 1, 2003,
by and among CWABS, INC., a Delaware corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS, INC., a New York corporation, as seller
(the "Seller"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as master servicer (the "Master Servicer"), The Bank of New York, a
New York banking corporation, as trustee (the "Trustee"), and BNY WESTERN TRUST
COMPANY, a California banking corporation, as Co-Trustee (the "Co-Trustee").

                             PRELIMINARY STATEMENT:

         The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in eight
classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Mortgage Loans (as defined herein).

                                     REMIC I
                                     -------

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." The Class R-I Interest will represent
the sole class of "residual interests" in REMIC I for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, remittance rate (the "Uncertificated
REMIC I Pass-Through Rate") and initial Uncertificated Principal Balance for
each of the "regular interests" in REMIC I (the "REMIC I Regular Interests").
The "latest possible maturity date" (determined solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each REMIC I
Regular Interest shall be the 360th Distribution Date. None of the REMIC I
Regular Interests will be certificated.

<TABLE>
<CAPTION>
       Designation         Uncertificated REMIC I    Uncertificated Principal Balance   Latest Possible Maturity
                              Pass-Through Rate                                                   Date
<S>                        <C>                       <C>                                <C>
          LT-1                   Variable(1)                  $781,144,218.00               January 25, 2033
          LT-IO                  Variable(1)                  $85,000,000.00                January 25, 2033
          LT-P                   Variable(1)                      $100.00                   January 25, 2033
</TABLE>

_______________
(1)      Calculated as provided in the definition of Uncertificated REMIC I
         Pass- Through Rate.

                                    REMIC II
                                    --------

         As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC I Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC II. The Class R-II Interest will represent

                                       1
<PAGE>

the sole class of "residual interests" in REMIC II for purposes of the REMIC
Provisions under federal income tax law. The following table irrevocably sets
forth the designation, remittance rate (the "Uncertificated REMIC II
Pass-Through Rate") and initial Uncertificated Principal Balance for each of the
"regular interests" in REMIC I (the "REMIC I Regular Interests"). The "latest
possible maturity date" (determined solely for purposes of satisfying Treasury
regulation Section 1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall
be the 360th Distribution Date. None of the REMIC II Regular Interests will be
certificated.

<TABLE>
<CAPTION>
       Designation         Uncertificated REMIC II   Uncertificated Principal BalancE   Latest Possible Maturity
                              Pass-Through Rate                                                   Date
                              -----------------                                                   ----
<S>                        <C>                       <C>                                <C>
          MT-AA                  Variable(1)                  $848,821,333.64               January 25, 2033
          MT-A1                  Variable(1)                   $7,735,000.00                January 25, 2033
          MT-M1                  Variable(1)                    $297,500.00                 January 25, 2033
          MT-M2                  Variable(1)                    $255,000.00                 January 25, 2033
          MT-B1                  Variable(1)                    $212,500.00                 January 25, 2033
          MT-ZZ                  Variable(1)                   $8,822,884.36                January 25, 2033
         MT-IO-1                    0.50%                           (2)                     January 25, 2033
         MT-IO-2                    0.50%                           (2)                     January 25, 2033
          MT-P                   Variable(1)                      $100.00                   January 25, 2033
</TABLE>

_______________
(1)      Calculated as provided in the definition of Uncertificated REMIC II
         Pass- Through Rate.
(2)      Calculated as provided in the definition of Uncertificated Notional
         Amount.

                                    REMIC III
                                    ---------

         As provided herein, the Trustee will elect to treat the segregated pool
of assets consisting of the REMIC II Regular Interests as a REMIC for federal
income tax purposes, and such segregated pool of assets will be designated as
REMIC III. The Class R-III Interest will represent the sole class of "residual
interests" in REMIC II for purposes of the REMIC Provisions under federal income
tax law. The following table irrevocably sets forth the designation,
Pass-Through Rate, aggregate Initial Certificate Principal Balance, Final
Scheduled Distribution Date and initial ratings for each Class of Certificates
comprising the interests representing "regular interests" in REMIC III. The
"latest possible maturity date" (determined solely for purposes of satisfying
Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each Class of REMIC III
Regular Certificates shall be the 360th Distribution Date.

<TABLE>
<CAPTION>
      Designation             Pass-Through Rate            Aggregate Initial      Final Scheduled Distribution Date
                          Certificate Principal Balance
<S>                       <C>                              <C>                    <C>
       Class A-1                     (1)                        $ 773,500,000.00          January 25, 2003

                                       2
<PAGE>

       Class A-IO                    (1)                                (3)               January 25, 2003
       Class M-1                     (1)                        $   29,750,000.00         January 25, 2003
       Class M-2                     (1)                        $   22,500,000.00         January 25, 2003
       Class B-1                     (1)                        $   21,250,000.00         January 25, 2003
        Class C                      (2)                        $   16,144,218.00(2)      January 25, 2003
        Class P                      (4)                        $          100.00         January 25, 2003
</TABLE>

_______________
(1)      Interest will accrue at a rate equal to the Pass-Through Rate, as
         defined herein.
(2)      The Class C Certificates will accrue interest on a Notional Balance as
         described in the definition of Current Interest. The Class C
         Certificates will not accrue interest on their Certificate Principal
         Balance.
(3)      The Class A-IO Certificates will accrue interest on a Notional Balance
         as described in the definition of Notional Balance herein.
(4)      The Class P Certificates will not be entitled to distributions of
         interest.

                                   ARTICLE I.

                                   DEFINITIONS

                  Section 1.01. DEFINED TERMS.

                  In addition to those defined terms defined in Section 1.02,
whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:

                  ACCRUAL PERIOD: With respect to any Distribution Date and the
Certificates (other than the Class A-IO, Class A-R, Class P and Class C
Certificates), the period commencing on the immediately preceding Distribution
Date (or, in the case of the first Distribution Date, the Closing Date) and
ending on the day immediately preceding such Distribution Date. With respect to
any Distribution Date and the Class A-IO Certificates and Class C Certificates,
the calendar month preceding the month in which such Distribution Date occurs.
All calculations of interest on the Certificates (other than the Class A-IO
Certificates and Class C Certificates) will be made on the basis of the actual
number of days elapsed in the related Accrual Period and on a 360-day year. All
calculations of interest on the Class A-IO Certificates and Class C Certificates
will be made on the basis of a 360-day year consisting of twelve 30-day months.
The Class A-R Certificates and Class P Certificates will not accrue any interest
and therefore have no Accrual Period.

                  ACTUARIAL MORTGAGE LOAN: Any Mortgage Loan other than a Simple
Interest Mortgage Loan.

                  ADJUSTABLE RATE MORTGAGE LOANS: The Mortgage Loans identified
in the Mortgage Loan Schedule as having a Mortgage Rate which is adjustable for
the life of the related Mortgage, including any Mortgage Loans delivered in
replacement thereof.

                  ADJUSTED MAXIMUM MORTGAGE RATE: With respect to each
Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate less the Expense Fee
Rate. With respect to each Fixed Rate Mortgage Loan, the Adjusted Net Mortgage
Rate.

                                       3
<PAGE>

                  ADJUSTED NET MORTGAGE RATE: As to each Mortgage Loan, the
Mortgage Rate less the Expense Fee Rate.

                  ADJUSTMENT DATE: As to each Adjustable Rate Mortgage Loan,
each date on which the related Mortgage Rate is subject to adjustment, as
provided in the related Mortgage Note.

                  ADVANCE: The aggregate of the advances required to be made by
the Master Servicer with respect to any Distribution Date pursuant to Section
4.01, the amount of any such advances being equal to the sum of (A) the
aggregate of payments of principal and interest on the Actuarial Mortgage Loans
and payments of interest on the Simple Interest Mortgage Loans (in each case,
net of the Servicing Fees) on the Mortgage Loans that were due on the related
Due Date and not received as of the close of business on the related
Determination Date and (B) with respect to each REO Property that has not been
liquidated, an amount equal to the excess, if any, of (x) one month's interest
(adjusted to the Net Mortgage Rate) on the Stated Principal Balance of the
related Mortgage Loan over (y) the net monthly rental income (if any) from such
REO Property deposited in the Certificate Account for such Distribution Date
pursuant to Section 3.12, less the aggregate amount of any such delinquent
payments that the Master Servicer has determined would constitute a
Nonrecoverable Advance were an advance to be made with respect thereto.
Notwithstanding the foregoing, all references to scheduled interest or interest
due on a related Due Date with respect to a Simple Interest Mortgage Loan will
mean an amount equal to the excess of (i) 30 days' interest at the applicable
Net Mortgage Rate on the Stated Principal Balance of such Simple Interest
Mortgage Loan as of the last day of the related Due Period over (ii) the portion
of any monthly payment received from the borrower during the related Due Period
which was allocable to interest.

                  AGREEMENT: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.

                  AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution
Date, the aggregate amount held in the Certificate Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Date and (ii) Principal Prepayments and Liquidation
Proceeds received in respect of such Mortgage Loans after the last day of the
related Prepayment Period or Due Period, respectively.

                  APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution
Date, the sum of the Realized Losses with respect to the Mortgage Loans which
are to be applied in reduction of the Certificate Principal Balance the most
subordinate Class of Subordinate Certificates outstanding pursuant to this
Agreement, which shall equal the amount, if any, by which, Certificate Principal
Balance of all Certificates (after all distributions of principal on such
Distribution Date) exceeds the Stated Principal Balance of the Mortgage Loans
for such Distribution Date.

                                       4
<PAGE>

                  APPRAISED VALUE: The appraised value of the Mortgaged Property
based upon the appraisal made for the Seller by a fee appraiser at the time of
the origination of the related Mortgage Loan, or the sales price of the
Mortgaged Property at the time of such origination, whichever is less, or with
respect to any Mortgage Loan originated in connection with a refinancing, the
appraised value of the Mortgaged Property based upon the appraisal made at the
time of such refinancing.

                  BANKRUPTCY CODE:  Title 11 of the United States Code.

                  BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 5.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.

                  BUSINESS DAY: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in the State of California, City of
New York, New York or the city in which the Corporate Trust Office of the
Trustee is located are authorized or obligated by law or executive order to be
closed.

                  CAP CONTRACT: The transaction evidenced by the Confirmation
And Agreement (as assigned to the Trustee pursuant to the Cap Contract
Assignment Agreement), a form of which is attached hereto as Exhibit R.

                  CAP CONTRACT ASSIGNMENT AGREEMENT: The Assignment Agreement
regarding the Cap Contract dated as of the Closing Date among the Seller, the
Trustee and the Cap Contract Counterparty, a form of which is attached hereto as
Exhibit S.

                  CAP CONTRACT COUNTERPARTY: Bank of America, N.A., and any
permitted successors and assigns pursuant to Cap Contract.

                  CAP CONTRACT TERMINATION DATE: The Distribution Date in
February 2010.

                  CARRYOVER RESERVE FUND: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 4.08 in the name of
the Trustee for the benefit of the Certificateholders and designated "The Bank
of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". Funds in the Carryover Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement and shall not be a part of any REMIC created under this
Agreement.

                  CERTIFICATE: Any one of the certificates of any Class executed
and authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-5, Exhibit B, Exhibit C and Exhibit D.

                                       5
<PAGE>

                  CERTIFICATE ACCOUNT: The separate Eligible Account created and
initially maintained by the Master Servicer pursuant to Section 3.05(b) with a
depository institution in the name of the Master Servicer for the benefit of the
Trustee on behalf of the Certificateholders and designated "Countrywide Home
Loans, Inc. in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". Funds in the Certificate Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.

                  CERTIFICATE ACCOUNT DEPOSIT: An amount equal to the aggregate
of all amounts in respect of (i) principal of the Mortgage Loans due on or after
the Cut-off Date and received by the Master Servicer before the Closing Date and
not applied in computing the Cut-off Date Principal Balance thereof, and (ii)
interest on the Mortgage Loans due on and after the Cut-off Date and received by
the Master Servicer before the Closing Date.

                  CERTIFICATE OWNER: With respect to a Book-Entry Certificate,
the person that is the beneficial owner of such Book-Entry Certificate.

                  CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other
than the Class A-IO Certificates and Class C Certificates) and as of any
Distribution Date, the Initial Certificate Principal Balance of such Certificate
LESS the sum of (i) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 4.04, and (ii) in the case of any Subordinate
Certificate, any Applied Realized Loss Amounts allocated to such Certificate on
previous Distribution Dates pursuant to Section 4.04. As to any Class C
Certificate and as of any Distribution Date, an amount equal to the excess, if
any, of (i) the aggregate Stated Principal Balance of the Mortgage Loans over
(ii) the aggregate Certificate Principal Balance of the Offered Certificates
(other than the Class A-IO Certificates). References herein to the Certificate
Principal Balance of a Class of Certificates shall mean the Certificate
Principal Balances of all Certificates in such Class. The Class A-IO
Certificates do not have a Certificate Principal Balance.

                  CERTIFICATE REGISTER: The register maintained pursuant to
Section 5.02 hereof.

                  CERTIFICATEHOLDER or HOLDER: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede & Co., as
nominee for the Depository, in the case of any Class of Regular Certificates,
except that solely for the purpose of giving any consent pursuant to this
Agreement, any Certificate registered in the name of the Depositor or any
affiliate of the Depositor shall be deemed not to be Outstanding and the Voting
Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Voting Interests necessary to effect such
consent has been obtained; provided that if any such Person (including the
Depositor) owns 100% of the Voting Interests evidenced by a Class of
Certificates, such Certificates shall be deemed to be Outstanding for purposes
of any provision hereof (other than the second sentence of Section 10.01 hereof)
that requires the consent of the Holders of Certificates of a particular Class
as a condition to the taking of any action hereunder. The Trustee is entitled to
rely conclusively on a certification of the Depositor or any affiliate of the
Depositor in determining which Certificates are registered in the name of an
affiliate of the Depositor.

                  CLASS: All Certificates bearing the same Class designation as
set forth in Section 5.01 hereof.

                                       6
<PAGE>

                  CLASS A-1 CERTIFICATE: Any Certificate designated as a "Class
A-1 Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to distributions as set forth herein.

                  CLASS A-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-1 Certificates.

                  CLASS A-1 CURRENT INTEREST: For any Distribution Date, the
interest accrued during the related Accrual Period at the Class A-1 Pass-Through
Rate on the Class A-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

                  CLASS A-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class A-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class A-1
Certificates with respect to interest on such prior Distribution Dates.

                  CLASS A-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class A-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
A-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
A-1 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest accrued on the Class A Certificates at the Net Rate
Cap for such Distribution Date and (B) the Class A-1 Interest Carryover Amount
for all previous Distribution Dates not previously paid pursuant to Section
4.04, together with interest thereon at the Class A-1 Pass-Through Rate (without
giving effect to the Net Rate Cap up to the Weighted Maximum Rate Cap).

                  CLASS A-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.400% per annum and, for any Distribution Date after
the Optional Termination Date, 0.800% per annum.

                  CLASS A-1 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class A-1 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.

                  CLASS A-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (A) the Certificate Principal Balance of the
Class A-1 Certificates immediately prior to such Distribution Date over (B) the
lesser of (1) 81.00% of the Stated Principal Balances of the Mortgage Loans for
such Distribution Date after giving effect to distributions to be made on that
Distribution Date and (2) the aggregate Stated Principal Balances of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date minus the OC Floor.

                                       7
<PAGE>

                  CLASS A-IO CERTIFICATES: Any Certificate designated as a
"Class A-IO Certificate" on the face thereof, in the form of Exhibit A-2 hereto.

                  CLASS A-IO CURRENT INTEREST: For any Distribution Date, the
interest accrued on the Class A-IO Notional Balance during the related Accrual
Period at the Class A-IO Pass-Through Rate plus any amount previously
distributed with respect to interest for such Class that is recovered as a
voidable preference by a trustee in bankruptcy.

                  CLASS A-IO NOTIONAL BALANCE: For the Accrual Period for any
Distribution Date on or prior to the Distribution Date occurring in January
2005, the lesser of (i) $85,000,000 and (ii) the aggregate Stated Principal
Balance of the Mortgage Loans. For the Accrual Period for each Distribution Date
after the January 2005 Distribution Date, the Class A-IO Notional Balance will
be zero. For federal income tax purposes, however, the Class A-IO Certificates
will not have a notional balance, but the Class A-IO Current Interest will be
deemed to be to (i) for any Distribution Date from February 2003 through January
2004, 100% of the interest payable on REMIC II Regular Interest MT-IO-1 and
REMIC II Regular Interest MT-IO-2, (ii) for any Distribution Date from February
2004 through January 2005, 100% of the interest payable on REMIC II Regular
Interest MT-IO-2 and (iii) for and Distribution Date thereafter, 0.00%.

                  CLASS A-IO PASS-THROUGH RATE: For each Accrual Period: (i) for
any Distribution Date on or prior to the January 2004 Distribution Date, 1.00%
per annum, (ii) for any Distribution Date from and including the February 2004
Distribution Date through the January 2005 Distribution Date, 0.50% per annum,
and (iii) for any Distribution Date after the January 2005 Distribution Date, 0%
per annum.

                  CLASS A-R CERTIFICATE: Any one of the Class A-R Certificates
executed by the Trustee substantially in the form annexed hereto as Exhibit D,
composed of the Class R-I Interest, Class R-II Interest and the Class R-III
Interest, and evidencing an interest designated as a "residual interest" in
REMIC I, REMIC II and REMIC III for purposes of the REMIC Provisions.

                  CLASS A-R CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class A-R Certificates.

                  CLASS A-R PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.

                  CLASS B-1 CERTIFICATE: Any Certificate designated as a "Class
B-1 Certificate" on the face thereof, in the form of Exhibit A-5 hereto,
representing the right to distributions as set forth herein.

                  CLASS B-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class B-1 Certificates.

                                       8
<PAGE>

                  CLASS B-1 CURRENT INTEREST: For any Distribution Date, the
interest accrued during the related Accrual Period at the Class B-1 Pass-Through
Rate on the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

                  CLASS B-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class B-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class B-1
Certificates with respect to interest on such prior Distribution Dates.

                  CLASS B-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class B-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
B-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
B-1 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest accrued on the Class B-1 Certificates at the Net
Rate Cap for such Distribution Date and (B) the Class B-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class B-1 Pass-Through Rate
(without giving effect to the Net Rate Cap up to the Weighted Maximum Rate Cap).

                  CLASS B-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 3.500% per annum and, for any Distribution Date after
the Optional Termination Date, 5.250% per annum.

                  CLASS B-1 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class B-1 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.

                  CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class A-1 Certificate
Principal Balance (after taking into account distribution of the Class A-1
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class M-2 Certificate Principal Balance (after taking into account distribution
of the Class M-2 Principal Distribution Amount on such Distribution Date), and
(D) the Class B-1 Certificate Principal Balance immediately prior to such
Distribution Date over (ii) the lesser of (x) 99.00% of the aggregate Stated
Principal Balances of the Mortgage Loans for such Distribution Date after giving
effect to distributions to be made on that Distribution Date and (y) the
aggregate Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date minus the OC Floor; provided,
however, that after the Class A-1 Certificate Principal Balance, the Class M-1
Certificate Principal Balance and the Class M-2 Certificate Principal Balance
have been reduced to zero, the Class B-1 Principal Distribution Amount for

                                       9
<PAGE>

such Distribution Date will equal 100% of the Principal Distribution Amount for
such Distribution Date.

                  CLASS C CERTIFICATE: Any Certificate designated as a "Class C
Certificate" on the face thereof, in the form of Exhibit B hereto, representing
the right to distributions as set forth herein.

                  CLASS C CURRENT INTEREST: For any Distribution Date, the
interest accrued on the Class C Notional Amount during the related Accrual
Period at the Class C Pass-Through Rate plus any amount previously distributed
with respect to interest for such Class that is recovered as a voidable
preference by a trustee in bankruptcy.

                  CLASS C NOTIONAL AMOUNT: The aggregate amount of the
Uncertificated Principal Balance of the REMIC II Regular Interests other than
REMIC II Regular Interest MT-P, REMIC II Regular InterestMT-IO-1 and REMIC II
Regular Interest MT-IO-2.

                  CLASS C PASS-THROUGH RATE: A rate per annum equal to the
percentage equivalent of a fraction, the numerator of which is the sum of the
amounts calculated pursuant to clauses (A) through (F) below, and the
denominator of which is the Uncertificated Principal Balance of the REMIC II
Regular Interests (other than REMIC II Regular Interest MT-P). For purposes of
calculating the Pass-Through Rate for the Class C Certificates, the numerator is
equal to the sum of the following components:

                           (A) the Uncertificated REMIC II Pass-Through Rate for
         REMIC II Regular Interest MT-A1 minus the Marker Rate, applied to an
         amount equal to the Uncertificated Principal Balance of REMIC II
         Regular Interest MT-A1;

                           (B) the Uncertificated REMIC II Pass-Through Rate for
         REMIC II Regular Interest MT-M1 minus the Marker Rate, applied to an
         amount equal to the Uncertificated Principal Balance of REMIC I Regular
         Interest MT-M1;

                           (C) the Uncertificated REMIC II Pass-Through Rate for
         REMIC II Regular Interest MT-M2 minus the Marker Rate, applied to an
         amount equal to the Uncertificated Principal Balance of REMIC II
         Regular Interest MT-M2;

                           (D) the Uncertificated REMIC II Pass-Through Rate for
         REMIC II Regular Interest MT-B1 minus the Marker Rate, applied to an
         amount equal to the Uncertificated Principal Balance of REMIC II
         Regular Interest MT-B1;

                           (E) the Uncertificated REMIC II Pass-Through Rate for
         REMIC II Regular Interest MT-ZZ minus the Marker Rate, applied to an
         amount equal to the Uncertificated Principal Balance of REMIC II
         Regular Interest MT-ZZ; and

                           (F) 100% of the interest on REMIC II Regular Interest
         MT-P

                                       10
<PAGE>

                  CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class
M-1 Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to distributions as set forth herein.

                  CLASS M-1 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-1 Certificates.

                  CLASS M-1 CURRENT INTEREST: For any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-1 Pass-Through
Rate on the Class M-1 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

                  CLASS M-1 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class M-1 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class M-1
Certificates with respect to interest.

                  CLASS M-1 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class M-1 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
M-1 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
M-1 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest accrued on the Class M-1 Certificates at the Net
Rate Cap for such Distribution Date and (B) the Class M-1 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-1 Pass-Through Rate
(without giving effect to the Net Rate Cap up to the Weighted Maximum Rate Cap).

                  CLASS M-1 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 0.920% per annum and, for any Distribution Date after
the Optional Termination Date, 1.380% per annum.

                  CLASS M-1 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class M-1 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.

                  CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of (A) the Class A-1 Certificate
Principal Balance (after taking into account distribution of the Class A-1
Principal Distribution Amount on such Distribution Date) and (B) the Class M-1
Certificate Principal Balance immediately prior to such Distribution Date over
(ii) the lesser of (x) 88.00% of the Stated Principal Balances of the Mortgage
Loans for such Distribution Date after giving effect to distributions to be made
on that Distribution Date and (y) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date minus the OC Floor; provided, however, that after the Class
A-1 Certificate Principal Balance, the Class M-2 Certificate Principal Balance
and the Class B-1

                                       11
<PAGE>

Certificate Principal Balance have been reduced to zero, the Class M-1 Principal
Distribution Amount for such Distribution Date will equal 100% of the Principal
Distribution Amount for such Distribution Date.

                  CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class
M-2 Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to distributions as set forth herein.

                  CLASS M-2 CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class M-2 Certificates.

                  CLASS M-2 CURRENT INTEREST: For any Distribution Date, the
interest accrued during the related Accrual Period at the Class M-2 Pass-Through
Rate on the Class M-2 Certificate Principal Balance immediately prior to such
Distribution Date, plus any amount previously distributed with respect to
interest for such Class that is recovered as a voidable preference by a trustee
in bankruptcy.

                  CLASS M-2 INTEREST CARRY FORWARD AMOUNT: For any Distribution
Date, the excess of (a) the Class M-2 Current Interest with respect to prior
Distribution Dates over (b) the amount actually distributed to the Class M-2
Certificates with respect to interest on such prior Distribution Dates.

                  CLASS M-2 INTEREST CARRYOVER AMOUNT: For any Distribution Date
on which the Pass-Through Rate for the Class M-2 Certificates is based upon the
Net Rate Cap, the sum of (A) the excess of (i) the amount of interest the Class
M-2 Certificates would otherwise have accrued for such Distribution Date had
such rate been calculated as the sum of One-Month LIBOR and the applicable Class
M-2 Margin for such Distribution Date, up to the Weighted Maximum Rate Cap, over
(ii) the amount of interest accrued on the Class M-2 Certificates at the Net
Rate Cap for such Distribution Date and (B) the Class M-2 Interest Carryover
Amount for all previous Distribution Dates not previously paid pursuant to
Section 4.04, together with interest thereon at the Class M-2 Pass-Through Rate
(without giving effect to the Net Rate Cap up to the Weighted Maximum Rate Cap).

                  CLASS M-2 MARGIN: For any Distribution Date on or prior to the
Optional Termination Date, 2.000% per annum and, for any Distribution Date after
the Optional Termination Date, 3.000% per annum.

                  CLASS M-2 PASS-THROUGH RATE: For any Distribution Date, the
least of (i) One-Month LIBOR plus the Class M-2 Margin, (ii) the Net Rate Cap
for such Distribution Date, and (iii) the Weighted Maximum Rate Cap for such
Distribution Date.

                  CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date the excess of (i) the sum of: (A) the Class A-1 Certificate
Principal Balance (after taking into account distribution of the Class A-1
Principal Distribution Amount on such Distribution Date), (B) the Class M-1
Certificate Principal Balance (after taking into account distribution of the

                                       12
<PAGE>

Class M-1 Principal Distribution Amount on such Distribution Date) and (C) the
Class M-2 Certificate Principal Balance immediately prior to such Distribution
Date over (ii) the lesser of (x) 94.00% of the aggregate Stated Principal
Balances of the Mortgage Loans for such Distribution Date after giving effect to
distributions to be made on that Distribution Date and (y) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date minus the OC Floor; provided, however, that
after the Class A-1 Certificate Principal Balance, the Class M-1 Certificate
Principal Balance and the Class B-1 Certificate Principal Balance have been
reduced to zero, the Class M-2 Principal Distribution Amount for such
Distribution Date will equal 100% of the Principal Distribution Amount for such
Distribution Date.

                  CLASS P CERTIFICATE: Any Certificate designated as a "Class P
Certificate" on the face thereof, in the form of Exhibit C hereto, representing
the right to distributions as set forth herein.

                  CLASS P CERTIFICATE PRINCIPAL BALANCE: As of any date of
determination, the Certificate Principal Balance of the Class P Certificates.

                  CLASS P PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the excess, if any, of (A) $100 over (B) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
4.04.

                  CLASS R-I INTEREST: The uncertificated Residual Interest in
REMIC I.

                  CLASS R-II INTEREST: The uncertificated Residual Interest in
REMIC II.

                  CLASS R-III INTEREST: The uncertificated Residual Interest in
REMIC III.

                  CLOSING DATE:  January 28, 2003.

                  CO-TRUSTEE: BNY Western Trust Company, a California banking
corporation, not in its individual capacity, but solely in its capacity as
co-trustee for the benefit of the Certificateholders under this Agreement, and
any successor thereto, and any corporation or national banking association
resulting from or surviving any consolidation or merger to which it or its
successors may be a party.

                  CODE: The Internal Revenue Code of 1986, including any
successor or amendatory provisions.

                  COMPENSATING INTEREST: With respect to any Distribution Date,
an amount equal to one-half of the Servicing Fee, to be applied to the interest
portion of any Prepayment Interest Shortfall on the Mortgage Loans pursuant to
Section 4.02 hereof.

                                       13
<PAGE>

                  CONFIRMATION AND AGREEMENT: : The Confirmation and Agreement
dated January 28, 2003, reference number 3017354, evidencing the Cap Contract.

                  CORPORATE TRUST OFFICE: The designated office of the Trustee
in the State of New York where at any particular time its corporate trust
business with respect to this Agreement shall be administered, which office at
the date of the execution of this Agreement is located at 101 Barclay Street,
New York, New York 10286 (Attention: Corporate Trust MBS Administration),
telephone: (212) 815-3236, facsimile: (212) 815-3986.

                  CORRESPONDING CERTIFICATE: With respect to each REMIC II
Regular Interest set forth below, the Regular Certificate set forth in the table
below:

                REMIC II REGULAR INTEREST           REMIC III CERTIFICATE
                -------------------------           ---------------------
                          MT-A1                           Class A-1
                         MT-IO-1                         Class A-IO
                         MT-IO-2                         Class A-IO
                          MT-M1                           Class M-1
                          MT-M2                           Class M-2
                          MT-B1                           Class B-1
                           MT-P                            Class P

                  COVERED MORTGAGE LOAN: A mortgage loan listed on the Mortgage
Loan Schedule as being covered by the Mortgage Insurance Policy.

                  CURRENT INTEREST: With respect to (i) the Class A-1
Certificates, the Class A-1 Current Interest, (ii) the Class M-1 Certificates,
the Class M-1 Current Interest, (iii) the Class M-2 Certificates, the Class M-2
Current Interest, (iv) the Class B-1 Certificates, the Class B-1 Current
Interest and (v) the Class C Certificates, the Class C Current Interest.

                  CUMULATIVE LOSS TRIGGER EVENT: With respect to a Distribution
Date after the Stepdown Date exists if the aggregate amount of Realized Losses
on the Mortgage Loans from (and including) the Cut-off Date for each Mortgage
Loan to (and including) the last day of the related Due Period exceeds the
applicable percentage, for such Distribution Date, of the Cut-off Date Principal
Balance of the Mortgage Loans, as set forth below:

                  Distribution Date                                  Percentage
                  -----------------                                  ----------

                  February 2006-- January 2007.....................  1.45%
                  February 2007-- January 2008.....................  2.40%
                  February 2008-- January 2009.....................  3.00%

                                       14
<PAGE>

                  February 2009 and thereafter.....................  3.25%

                  CUT-OFF DATE: In the case of any Mortgage Loan, the later of
(x) January 1, 2003 and (y) the date of origination of such Mortgage Loan. When
used with respect to any Mortgage Loans "the Cut-off Date" shall mean the
related Cut-off Dates.

                  CUT-OFF DATE PRINCIPAL BALANCE: As to any Actuarial Mortgage
Loan, the unpaid principal balance thereof as of the close of business on the
Cut-off Date after application of all payments of principal due on or prior to
the Cut-off Date, whether or not received, and all Principal Prepayments
received on or prior to the Cut-off Date, but without giving effect to any
installments of principal received in respect of Due Dates after the Cut-off
Date. As to any Simple Interest Mortgage Loan, the unpaid principal balance
thereof as of the close of business on the Cut-off Date after application of all
payments of principal made on or prior to the Cut-off Date and all Principal
Prepayments received on or prior to the Cut-off Date.

                  DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan that became
final and non-appealable, except such a reduction resulting from a Deficient
Valuation or any other reduction that results in a permanent forgiveness of
principal.

                  DEFINITIVE CERTIFICATES:  As defined in Section 5.06.

                  DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property in an
amount less than the then outstanding indebtedness under such Mortgage Loan, or
any reduction in the amount of principal to be paid in connection with any
Scheduled Payment that results in a permanent forgiveness of principal, which
valuation or reduction results from an order of such court that is final and
non-appealable in a proceeding under the Bankruptcy Code.

                  DELAY DELIVERY MORTGAGE LOANS: The Mortgage Loans identified
on the schedule of Mortgage Loans hereto set forth on Exhibit F-2 hereof for
which all or a portion of a related Mortgage File is not delivered to the
Co-Trustee on or prior to the Closing Date. The Depositor shall deliver (or
cause delivery of) the Mortgage Files to the Co-Trustee: (A) with respect to at
least 50% of the Mortgage Loans, not later than the Closing Date, (B) with
respect to at least an additional 40% of the Mortgage Loans, not later than 20
days after the Closing Date, and (C) with respect to the remaining 10% of the
Mortgage Loans, not later than 30 days after the Closing Date. To the extent
that the Seller shall be in possession of any Mortgage Files with respect to any
Delay Delivery Loan, until delivery to of such Mortgage File to the Co-Trustee
as provided in Section 2.01, the Seller shall hold such files as agent and in
trust for the Trustee.

                  DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.

                                       15
<PAGE>

                  DELINQUENCY TRIGGER EVENT: With respect to any Distribution
Date after the Stepdown Date exists if the product of (i) 1.33 times (ii) the
fraction (expressed as a percentage) of (A) the numerator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans 60 or more days delinquent as of the close of business on the last day of
the calendar month preceding such Distribution Date (including Mortgage Loans in
foreclosure and REO Properties) and (B) the denominator of which is the
aggregate Stated Principal Balance for such Distribution Date of all Mortgage
Loans, equals or exceeds the related Required Percentage.

                  DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is "30
days delinquent" if such payment has not been received by the close of business
on the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.

                  DENOMINATION: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the "Initial Notional Amount of this Certificate" or, if neither
of the foregoing, the Percentage Interest appearing on the face thereof.

                  DEPOSITOR: CWABS, Inc., a Delaware corporation, or its
successor in interest.

                  DEPOSITORY: The initial Depository shall be The Depository
Trust Company ("DTC"), the nominee of which is Cede & Co., or any other
organization registered as a "clearing agency" pursuant to Section 17A of the
Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.

                  DEPOSITORY AGREEMENT: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
O.

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

                  DETERMINATION DATE: With respect to any Distribution Date, the
15th day of the month of such Distribution Date or, if such 15th day is not a
Business Day, the immediately preceding Business Day.

                                       16
<PAGE>

                  DISTRIBUTION ACCOUNT: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.05 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Bank of
New York, in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.

                  DISTRIBUTION ACCOUNT DEPOSIT DATE: As to any Distribution
Date, 1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.

                  DISTRIBUTION DATE: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a Business
Day, the next succeeding Business Day, commencing in February 2003.

                  DUE DATE: With respect to any Mortgage Loan and Due Period,
the due date for scheduled payments of interest and/or principal on that
Mortgage Loan occurring in such Due Period as provided in the related Mortgage
Note.

                  DUE PERIOD: With respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which such Distribution Date occurs and ending on the first day of the month
in which such Distribution Date occurs.

                  ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, if Moody's is not a Rating Agency) are rated by each Rating
Agency in one of its two highest long-term and its highest short-term rating
categories respectively, at the time any amounts are held on deposit therein, or
(ii) an account or accounts in a depository institution or trust company in
which such accounts are insured by the FDIC (to the limits established by the
FDIC) and the uninsured deposits in which accounts are otherwise secured such
that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each
Rating Agency, the Certificateholders have a claim with respect to the funds in
such account or a perfected first priority security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution or trust company in which such account is maintained, or
(iii) a trust account or accounts maintained with the corporate trust department
of a federal or state chartered depository institution or trust company having
capital and surplus of not less than $50,000,000, acting in its fiduciary
capacity or (iv) any other account acceptable to the Rating Agencies. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.

                  ELIGIBLE REPURCHASE MONTH: As defined in Section 3.12(c)
hereof.

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

                                       17
<PAGE>

                  ERISA-QUALIFYING UNDERWRITING: A best efforts or firm
commitment underwriting or private placement that meets the applicable
requirements of the Underwriter's Exemption.

                  ERISA-RESTRICTED CERTIFICATES: The Class A-R, Class M-1, Class
M-2, Class B-1, Class C and Class P Certificates.

                  EVENT OF DEFAULT:  As defined in Section 7.01 hereof.

                  EXCESS CASHFLOW: With respect to any Distribution Date the sum
of (i) the amount remaining after the distribution of interest to
Certificateholders for such Distribution Date pursuant to Section 4.04(a)(v),
and (ii) the amount remaining after the distribution of principal to
Certificateholders for such Distribution Date pursuant to Section 4.04(d)(i)(B)
or 4.04(d)(ii)(E).

                  EXCESS PROCEEDS: With respect to any Liquidated Loan, any
Liquidation Proceeds that are in excess of the sum of (i) the unpaid principal
balance of such Liquidated Loan as of the date of such liquidation plus (ii)
interest at the Mortgage Rate from the Due Date as to which interest was last
paid or advanced to Certificateholders (and not reimbursed to the Master
Servicer) up to the Due Date in the month in which such Liquidation Proceeds are
required to be distributed on the Stated Principal Balance of such Liquidated
Loan outstanding during each Due Period as to which such interest was not paid
or advanced.

                  EXPENSE FEE RATE: The sum of (i) the Servicing Fee Rate, (ii)
the Trustee Fee Rate and (iii) with respect to a Covered Mortgage Loan, the
Mortgage Insurance Premium Rate.

                  EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the lesser of (1) the Overcollateralization Deficiency Amount
for such Distribution Date and (2) the Excess Cashflow for such Distribution
Date available for payment thereof pursuant to Section 4.04(e)(i).

                  FANNIE MAE: The Federal National Mortgage Association, a
federally chartered and privately owned corporation organized and existing under
the Federal National Mortgage Association Charter Act, or any successor thereto.

                  FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.

                  FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.

                  FIXED RATE MORTGAGE LOANS: The Mortgage Loans identified in
the Mortgage Loan Schedule as having a Mortgage Rate which is fixed for the life
of the related Mortgage, including any Mortgage Loans delivered in replacement
thereof.

                  FREDDIE MAC: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.

                                       18
<PAGE>

                  GROSS MARGIN: The percentage set forth in the related Mortgage
Note for the Adjustable Rate Mortgage Loans to be added to the Index for use in
determining the Mortgage Rate on each Adjustment Date, and which is set forth in
the Mortgage Loan Schedule for the Adjustable Rate Mortgage Loans.

                  INDEX: As to any Adjustable Rate Mortgage Loan on any
Adjustment Date related thereto, the index for the adjustment of the Mortgage
Rate set forth as such in the related Mortgage Note, such index in general being
the average of the London interbank offered rates for six-month U.S. dollar
deposits in the London market, as set forth in THE WALL STREET JOURNAL or some
other source generally accepted in the residential mortgage loan origination
business and specified in the related Mortgage Note, as most recently announced
as of either 45 days prior to, or the first business day of the month
immediately preceding the month of, such Adjustment Date or, if the Index ceases
to be published in the original source or becomes unavailable for any reason,
then the Index shall be a new index selected by the Master Servicer, based on
comparable information.

                  INITIAL ADJUSTMENT DATE: As to any Adjustable Rate Mortgage
Loan, the first Adjustment Date following the origination of such Mortgage Loan.

                  INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate (other than the Class A-IO Certificates), the Certificate Principal
Balance of such Certificate or any predecessor Certificate on the Closing Date.

                  INITIAL MORTGAGE RATE: As to each Mortgage Loan, the Mortgage
Rate in effect prior to the Initial Adjustment Date.

                  INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans pursuant to any Required Insurance Policy or any other insurance policy
covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, the Master Servicer or the trustee under the deed
of trust and are not applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Master Servicer would follow in servicing mortgage loans held for its own
account, in each case other than any amount included in such Insurance Proceeds
in respect of Insured Expenses.

                  INSURED EXPENSES: Expenses covered by a Required Insurance
Policy or any other insurance policy with respect to the Mortgage Loans.

                  INTEREST CARRY FORWARD AMOUNT: With respect to (i) the Class
A-1 Certificates, the Class A-1 Interest Carry Forward Amount, (ii) the Class
M-1 Certificates, the Class M-1 Interest Carry Forward Amount, (iii) the Class
M-2 Certificates, the Class M-2 Interest Carry Forward Amount and (iv) the Class
B-1 Certificates, the Class B-1 Interest Carry Forward Amount.

                  INTEREST DETERMINATION DATE: With respect to the Certificates
(other than the Class A-IO, Class A-R, Class C and Class P Certificates) for the
first Accrual Period, January 24,

                                       19
<PAGE>

2003. With respect to the Certificates (other than the Class A-IO, Class A-R,
Class C and Class P Certificates) and any Accrual Period thereafter, the second
LIBOR Business Day preceding the commencement of such Accrual Period.

                  INTEREST FUNDS: On any Distribution Date, the Interest
Remittance Amount less (1) the Trustee Fee for the Mortgage Loans for such
Distribution Date and less (2) the premium payable under the Mortgage Insurance
Policy for such Distribution Date.

                  INTEREST REMITTANCE AMOUNT: With respect to the Mortgage Loans
and any Master Servicer Advance Date, the sum, without duplication, of (i) all
scheduled interest collected during the related Due Period with respect to the
Mortgage Loans less the related Servicing Fee, (ii) interest payments on any
Principal Prepayments received during the related Prepayment Period other than
Prepayment Interest Excess, (iii) all related Advances relating to interest with
respect to the Mortgage Loans, (iv) all Compensating Interest with respect to
the Mortgage Loans, (v) Liquidation Proceeds with respect to the Mortgage Loans
collected during the related Due Period (to the extent such Liquidation Proceeds
relate to interest), and (v) for the Master Servicer Advance Date in February
2003, the Seller Shortfall Interest Requirement for such Master Servicer Advance
Date (if any), less all Nonrecoverable Advances relating to interest reimbursed
during the related Due Period.

                  LATEST POSSIBLE MATURITY DATE: The Distribution Date in March
2033.

                  LIBOR BUSINESS DAY: Any day on which banks in the City of
London, England and New York City, U.S.A. are open and conducting transactions
in foreign currency and exchange.

                  LIQUIDATED LOAN: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the Master Servicer has certified
(in accordance with Section 3.12) in the related Prepayment Period that it has
received all amounts it expects to receive in connection with such liquidation.

                  LIQUIDATION PROCEEDS: Amounts, including Insurance Proceeds,
received in connection with the partial or complete liquidation of Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property,
less the sum of related unreimbursed Advances, Servicing Fees and Servicing
Advances.

                  LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage,
the numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.

                                       20
<PAGE>

                  MARKER RATE: With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) multiplied by the weighted
average of the Pass-Through Rates for each REMIC II Regular Interest (other than
REMIC II Regular Interest MT-AA, REMIC II Regular Interest MT-IO-1 and REMIC II
Regular Interest MT-IO-2), with the rates on each such REMIC II Regular Interest
subject to a cap equal to the Pass-Through Rate for the Corresponding Class for
such REMIC II Regular Interest, and the rate on REMIC II Regular Interest MT-ZZ
subject to a cap of zero for purposes of this calculation.

                  MASTER SERVICER: Countrywide Home Loans Servicing LP, a Texas
limited partnership, and its successors and assigns, in its capacity as master
servicer hereunder.

                  MASTER SERVICER ADVANCE DATE: As to any Distribution Date,
1:00 p.m. Pacific time on the Business Day immediately preceding such
Distribution Date.

                  MAXIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, the maximum rate of interest set forth as such in the related
Mortgage Note.

                  MAXIMUM RATE: With respect to any Accural Period and the
related Distribution Date and any Class of Certificates (other than the Class
A-IO, Class A-R and Class P Certificates), is the sum of,

                           (a) the Weighted Maximum Rate Cap minus THE PRODUCT
OF (i) the Class A-IO Pass-Through Rate and (ii) a fraction (expressed as a
percentage), (x) the numerator of which is equal to the Class A-IO Notional
Balance and (y) the denominator of which is equal to the aggregate Stated
Principal Balance of the Mortgage Loans, as of the last day of the related Due
Period, adjusted to an effective rate reflecting the calculation of interest on
the basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year, and

                           (b) for purposes of calculating any Net Rate
Carryover on any Class of Certificates (other than the Class A-IO, Class A-R and
Class P Certificates) that may be entitled thereto, a fraction, expressed as a
percentage, the numerator of which is the product of the aggregate amount
received in respect of the Cap Contract for such Distribution Date MULTIPLIED BY
twelve, and the denominator of which is the aggregate Certificate Principal
Balance of the Class A-1, Class M-1, Class M-2 and Class B-1 Certificates on
such Distribution Date (prior to giving effect to distributions on such
Distribution Date).

                  MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.

                  MERS MORTGAGE LOAN: Any Mortgage Loan registered with MERS on
the MERS(R)System.

                  MERS(R) SYSTEM: The system of recording transfers of mortgages
electronically maintained by MERS.

                                       21
<PAGE>

                  MIN: The Mortgage Identification Number for any MERS Mortgage
Loan.

                  MINIMUM MORTGAGE RATE: With respect to each Adjustable Rate
Mortgage Loan, the minimum rate of interest set forth as such in the related
Mortgage Note.

                  MOM LOAN: Any Mortgage Loan, as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.

                  MONTHLY STATEMENT: The statement delivered to the
Certificateholders pursuant to Section 4.05.

                  MOODY'S: Moody's Investors Service, Inc. or any successor
thereto.

                  MORTGAGE: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest in an estate in
fee simple in real property securing a Mortgage Note.

                  MORTGAGE INSURANCE POLICY: The mortgage insurance policy
issued by Mortgage Guarantee Insurance Corporation with respect to certain
mortgage loans identified in the Mortgage Loan Schedule.

                  MORTGAGE INSURANCE PREMIUM: The premium payable on the
Mortgage Insurance Policy on each Distribution Date, plus the amount of any
Kentucky or West Virginia state taxes payable by the Co-Trustee as a result of
the payment of such premium in each case as provided by the Mortgage Insurance
Policy.

                  MORTGAGE INSURANCE PREMIUM RATE: With respect to a Covered
Mortgage Loan and any Distribution Date, the per annum rate equal to a quotient
(expressed as a percentage), the numerator of which is equal to the portion of
the Mortgage Insurance Premium payable with respect to such Distribution Date
attributable to such Covered Mortgage Loan times twelve and the denominator of
which is equal to the Stated Principal Balance of such Covered Mortgage Loan.

                  MORTGAGE FILE: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Co-Trustee to be added to the Mortgage File pursuant to this
Agreement.

                  MORTGAGE LOAN: Each of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof as from time to time
are held as a part of the Trust Fund (including any REO Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property. Any
Mortgage Loan subject to repurchase by the Seller or Master Servicer as provided
in this Agreement, shall continue to be a Mortgage Loan hereunder until the
Purchase Price with respect thereto has been paid to the Trust Fund.

                                       22
<PAGE>

                  MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, attached hereto as Exhibit
F-1, setting forth the following information with respect to each Mortgage Loan:

                  (i) the loan number;

                  (ii) the Appraised Value;

                  (iii) the Initial Mortgage Rate;

                  (iv) the maturity date;

                  (v) the original principal balance;

                  (vi) the Cut-off Date Principal Balance;

                  (vii) the first payment date of the Mortgage Loan;

                  (viii) the Scheduled Payment in effect as of the Cut-off Date;

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

                  (x) a code indicating whether the residential dwelling at the
               time of origination was represented to be owner-occupied;

                  (xi) a code indicating whether the residential dwelling is
               either (a) a detached single family dwelling (b) a condominium
               unit or (c) a two- to four-unit residential property;

                  (xii) a code indicating whether the Mortgage Loan is a Simple
               Interest Mortgage Loan;

                  (xiii) a code indicating whether the Mortgage Loan is a
               Covered Mortgage Loan and the rate for the Mortgage Insurance
               Premium, if applicable;

                  (xiv) with respect to each Adjustable Rate Mortgage Loan;

                           (a)      the frequency of each Adjustment Date;

                           (b)      the next Adjustment Date;

                           (c)      the Maximum Mortgage Rate;

                           (d)      the Minimum Mortgage Rate;

                                       23
<PAGE>

                           (e)      the Mortgage Rate as of the Cut-off Date;

                           (f)      the related Periodic Rate Cap;

                           (g)      the Gross Margin; and

                           (h)      the purpose of the Mortgage Loan.

                  MORTGAGE NOTE: The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

                  MORTGAGE POOL: The aggregate of the Mortgage Loans identified
in the Mortgage Loan Schedule.

                  MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note from time to time.

                  MORTGAGED PROPERTY: The underlying property securing a
Mortgage Loan.

                  MORTGAGOR: The obligors on a Mortgage Note.

                  NET MORTGAGE RATE: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.

                  NET RATE CAP: For any Accrual Period, a per annum rate equal
to (i) the weighted average Adjusted Net Mortgage Rate of the Mortgage Loans
minus (ii) THE PRODUCT OF (a) the Class A-IO Pass-Through Rate for such Accrual
Period and (b) a fraction (expressed as a percentage), (x) the numerator of
which is equal to the Class A-IO Notional Balance for such Accrual Period and
(y) the denominator of which is equal to the aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period, adjusted to
an effective rate reflecting the calculation of interest on the basis of the
actual number of days elapsed during the related Accrual Period and a 360-day
year.

                  NET RATE CARRYOVER: With respect to any Distribution Date, an
amount equal to the sum of (i) the Class A Interest Carryover Amount for such
Distribution Date (if any), (ii) the Class M-1 Interest Carryover Amount for
such Distribution Date (if any), (iii) the Class M-2 Interest Carryover Amount
for such Distribution Date (if any), and (iv) the Class B-1 Interest Carryover
Amount for such Distribution Date (if any); provided that when the term Net Rate
Carryover is used with respect to one Class of Certificates (other than the
Class A-IO, Class A-R, Class C and Class P Certificates), it shall mean such
carryover amount listed in clauses (i), (ii), (iii) or (iv) as applicable, with
the same Class designation. The Class A-IO, Class A-R, Class C and Class P
Certificates shall not accrue any Net Rate Carryover.

                  NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a
Book-Entry Certificate.

                                       24
<PAGE>

                  NONRECOVERABLE ADVANCE: Any portion of an Advance previously
made or proposed to be made by the Master Servicer that, in the good faith
judgment of the Master Servicer, will not or, in the case of a current
delinquency, would not, be ultimately recoverable by the Master Servicer from
the related Mortgagor, related Liquidation Proceeds or otherwise.

                  OC FLOOR: For any Distribution Date, 0.50% of the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.

                  OFFERED CERTIFICATES: The Class A-1, Class A-IO, Class A-R,
Class M-1, Class M-2 and Class B-1 Certificates.

                  OFFICER'S CERTIFICATE: A certificate (i) in the case of the
Depositor, signed by the Chairman of the Board, the Vice Chairman of the Board,
the President, a Managing Director, a Vice President (however denominated), an
Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Depositor, (ii) in the case of the
Master Servicer, (x) signed by the President, an Executive Vice President, a
Vice President, an Assistant Vice President, the Treasurer, or one of the
Assistant Treasurers or Assistant Secretaries or Countrywide GP, Inc., its
general partner, or (y) if provided for in this Agreement, signed by a Servicing
Officer, as the case may be, and delivered to the Depositor and the Trustee, as
the case may be, as required by this Agreement.

                  ONE-MONTH LIBOR: With respect to any Accrual Period, the rate
determined by the Trustee on the related Interest Determination Date on the
basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR calculated for the first Accrual Period shall equal 1.81125% per annum. If
such rate does not appear on such page (or such other page as may replace that
page on that service, or if such service is no longer offered, such other
service for displaying One-Month LIBOR or comparable rates as may be reasonably
selected by the Trustee), One-Month LIBOR for the applicable Accrual Period will
be the Reference Bank Rate. If no such quotations can be obtained by the Trustee
and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR
applicable to the preceding Accrual Period.

                  OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 6.04 or 10.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.

                  OPTIONAL TERMINATION: The termination of the Trust Fund
provided hereunder pursuant to the purchase of the Mortgage Loans pursuant to
the last sentence of Section 9.01 hereof.

                                       25
<PAGE>

                  OPTIONAL TERMINATION DATE: Any Distribution Date on which the
Stated Principal Balance of the Mortgage Loans and REO Properties in the Trust
Fund is equal to or less than 10% of the Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.

                  ORIGINAL MORTGAGE LOAN: The mortgage loan refinanced in
connection with the origination of a Refinancing Mortgage Loan.

                  ORIGINAL VALUE: The value of the property underlying a
Mortgage Loan based, in the case of the purchase of the underlying Mortgaged
Property, on the lower of an appraisal satisfactory to the Master Servicer or
the sales price of such property or, in the case of a refinancing, on an
appraisal satisfactory to the Master Servicer.

                  OTS:  The Office of Thrift Supervision.

                  OUTSTANDING: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:

                           (i) Certificates theretofore canceled by the Trustee
         or delivered to the Trustee for cancellation; and

                           (ii) Certificates in exchange for which or in lieu of
         which other Certificates have been executed and delivered by the
         Trustee pursuant to this Agreement.

                  OUTSTANDING MORTGAGE LOAN: As of any Distribution Date, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a Liquidated
Loan, prior to the end of the related Prepayment Period.

                  OVERCOLLATERALIZED AMOUNT: For any Distribution Date, the
amount, if any, by which (x) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period exceeds (y) the
aggregate Certificate Principal Balance of the Offered Certificates (other than
the Class A-IO Certificates) as of such Distribution Date (after giving effect
to distributions in respect of the Principal Remittance Amount on such
Distribution Date).

                  OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount for such Distribution Date (after
giving effect to distributions in respect of the Principal Remittance Amount for
such Distribution Date).

                  OVERCOLLATERALIZATION TARGET AMOUNT: For any Distribution
Date, the OC Floor.

                  OWNERSHIP INTEREST: As to any Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.

                                       26
<PAGE>

                  PASS-THROUGH RATE: With respect to the Class A-1 Certificates,
the Class A-1 Pass-Through Rate; with respect to the Class A-IO Certificates,
the Class A-IO Pass-Through Rate; with respect to the Class M-1 Certificates,
the Class M-1 Pass-Through Rate; with respect to the Class M-2 Certificates, the
Class M-2 Pass-Through Rate; with respect to the Class B-1 Certificates, the
Class B-1 Pass-Through Rate; with respect to the Class IO Certificate, the Class
IO Pass-Through Rate and with respect to the Class C Certificates, the Class C
Pass-Through Rate.

                  PERCENTAGE INTEREST: With respect to any Certificate (other
than the Class P, Class C or Class A-R Certificates), a fraction, expressed as a
percentage, the numerator of which is the Certificate Principal Balance or
Notional Balance, as applicable, represented by such Certificate and the
denominator of which is the aggregate Certificate Principal Balance or Notional
Balance, as applicable, of the related Class. With respect to the Class C, Class
P and Class A-R Certificates, the portion of the Class evidenced thereby,
expressed as a percentage, as stated on the face of such Certificate.

                  PERIODIC RATE CAP: As to substantially all Adjustable Rate
Mortgage Loans and the related Mortgage Notes, the provision therein that limits
permissible increases and decreases in the Mortgage Rate on any Adjustment Date
to not more than three percentage points.

                  PERMITTED INVESTMENTS: At any time, any one or more of the
following obligations and securities:

                  (i) obligations of the United States or any agency thereof,
         provided such obligations are backed by the full faith and credit of
         the United States;

                  (ii) general obligations of or obligations guaranteed by any
         state of the United States or the District of Columbia receiving the
         highest long-term debt rating of each Rating Agency, or such lower
         rating as each Rating Agency has confirmed in writing will not result
         in the downgrading or withdrawal of the ratings then assigned to the
         Certificates by such Rating Agency;

                  (iii) [Reserved];

                  (iv) commercial or finance company paper which is then
         receiving the highest commercial or finance company paper rating of
         each Rating Agency, or such lower rating as each Rating Agency has
         confirmed in writing will not result in the downgrading or withdrawal
         of the ratings then assigned to the Certificates by such Rating Agency;

                  (v) certificates of deposit, demand or time deposits, or
         bankers' acceptances issued by any depository institution or trust
         company incorporated under the laws of the United States or of any
         state thereof and subject to supervision and examination by federal
         and/or state banking authorities, provided that the commercial paper
         and/or long term unsecured debt obligations of such depository
         institution or trust company (or in the case of the principal
         depository institution in a holding company

                                       27
<PAGE>

         system, the commercial paper or long-term unsecured debt obligations of
         such holding company, but only if Moody's is not a Rating Agency) are
         then rated one of the two highest long-term and the highest short-term
         ratings of each such Rating Agency for such securities, or such lower
         ratings as each Rating Agency has confirmed in writing will not result
         in the downgrading or withdrawal of the rating then assigned to the
         Certificates by such Rating Agency;

                  (vi) repurchase obligations with respect to any security
         described in clauses (i) and (ii) above, in either case entered into
         with a depository institution or trust company (acting as principal)
         described in clause (v) above;

                  (vii) securities (other than stripped bonds, stripped coupons
         or instruments sold at a purchase price in excess of 115% of the face
         amount thereof) bearing interest or sold at a discount issued by any
         corporation incorporated under the laws of the United States or any
         state thereof which, at the time of such investment, have one of the
         two highest long term ratings of each Rating Agency (except if the
         Rating Agency is Moody's, such rating shall be the highest commercial
         paper rating of S&P for any such securities) or such lower rating as
         each Rating Agency has confirmed in writing will not result in the
         downgrading or withdrawal of the rating then assigned to the
         Certificates by such Rating Agency;

                  (viii) interests in any money market fund which at the date of
         acquisition of the interests in such fund and throughout the time such
         interests are held in such fund has the highest applicable long term
         rating by each Rating Agency or such lower rating as each Rating Agency
         has confirmed in writing will not result in the downgrading or
         withdrawal of the ratings then assigned to the Certificates by such
         Rating Agency;

                  (ix) short term investment funds sponsored by any trust
         company or national banking association incorporated under the laws of
         the United States or any state thereof which on the date of acquisition
         has been rated by each Rating Agency in their respective highest
         applicable rating category or such lower rating as each Rating Agency
         has confirmed in writing will not result in the downgrading or
         withdrawal of the ratings then assigned to the Certificates by such
         Rating Agency; and

                  (x) such other relatively risk free investments having a
         specified stated maturity and bearing interest or sold at a discount
         acceptable to each Rating Agency as will not result in the downgrading
         or withdrawal of the rating then assigned to the Certificates by any
         Rating Agency, as evidenced by a signed writing delivered by each
         Rating Agency;

provided, that no such instrument shall be a Permitted Investment if such
instrument (i) evidences the right to receive interest only payments with
respect to the obligations underlying such instrument, (ii) is purchased at a
premium or (iii) is purchased at a deep discount; provided further that no such
instrument shall be a Permitted Investment (A) if such instrument evidences
principal and interest payments derived from obligations underlying such

                                       28
<PAGE>

instrument and the interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (B) if it may be redeemed at a price below the
purchase price (the foregoing clause (B) not to apply to investments in units of
money market funds pursuant to clause (vii) above); provided further that no
amount beneficially owned by any REMIC (including, without limitation, any
amounts collected by the Master Servicer but not yet deposited in the
Certificate Account) may be invested in investments (other than money market
funds) treated as equity interests for Federal income tax purposes, unless the
Master Servicer shall receive an Opinion of Counsel, at the expense of Master
Servicer, to the effect that such investment will not adversely affect the
status of any such REMIC as a REMIC under the Code or result in imposition of a
tax on any such REMIC. Permitted Investments that are subject to prepayment or
call may not be purchased at a price in excess of par.

                  PERMITTED TRANSFEREE: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Class A-R Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) an
"electing large partnership" as defined in Section 775 of the Code, (vi) a
Person that is not a citizen or resident of the United States, a corporation,
partnership, or other entity (treated as a corporation or a partnership for
federal income tax purposes) created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, or an estate whose
income from sources without the United States is includible in gross income for
United States federal income tax purposes regardless of its connection with the
conduct of a trade or business within the United States, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trustor unless such Person has
furnished the transferor and the Trustee with a duly completed Internal Revenue
Service Form W-8ECI, and (vii) any other Person so designated by the Trustee
based upon an Opinion of Counsel that the Transfer of an Ownership Interest in a
Class A-R Certificate to such Person may cause the Trust Fund to fail to qualify
as a REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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

                                       29
<PAGE>

                  POOL STATED PRINCIPAL BALANCE: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans which were
Outstanding Mortgage Loans on the Due Date in the month preceding the month of
such Distribution Date.

                  PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to the Offered Certificates.

                  PREPAYMENT CHARGE: As to a Mortgage Loan, any charge paid by a
Mortgagor in connection with certain partial prepayments and all prepayments in
full made within the related Prepayment Charge Period, the Prepayment Charges
with respect to each applicable Mortgage Loan being identified in the Prepayment
Charge Schedule.

                  PREPAYMENT CHARGE PERIOD: As to any Mortgage Loan the period
of time during which a Prepayment Charge may be imposed.

                  PREPAYMENT CHARGE SCHEDULE: As of any date, the list of
Prepayment Charges included in the Trust Fund on that date, (including the
prepayment charge summary attached thereto). The Prepayment Charge Schedule
shall contain the following information with respect to each Prepayment Charge:

                  (i)      the Mortgage Loan account number;

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

                  (iii)    the state of origination in which the related
                           Mortgage Property is located;

                  (iv)     the first date on which a Monthly Payment is or was
                           due under the related Mortgage Note;

                  (v)      the term of the Prepayment Charge;

                  (vi)     the original principal amount of the related Mortgage
                           Loan; and

                  (vii)    the Cut-off Date Principal Balance of the related
                           Mortgage Loan.

                  The Prepayment Charge Schedule shall be amended from time to
time by the Master Servicer in accordance with this Agreement.

                  PREPAYMENT INTEREST EXCESS: With respect to any Distribution
Date, for each Actuarial Mortgage Loan that was the subject of a Principal
Prepayment during the period from the second day through the fifteenth day of
the month of such Distribution Date, any payment of interest received in
connection therewith (net of any applicable Servicing Fee) representing interest
accrued for any portion of such month of receipt.

                  PREPAYMENT INTEREST SHORTFALL: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a Principal Prepayment in

                                       30
<PAGE>

full, or that became a Liquidated Loan during (i) the Prepayment Period with
respect to a Simple Interest Mortgage Loan or (ii) the period from the sixteenth
day of the month preceding such Distribution Date, or in the case of the first
Distribution Date, from January 1, 2003 through and including the last day of
the month preceding such Distribution Date (in each case, other than a Principal
Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to
Section 2.02, 2.03, 2.04, 3.12 or 9.01 hereof), the amount, if any, by which (i)
one month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such Mortgage Loan immediately prior to such prepayment (or
liquidation) or in the case of a partial Principal Prepayment on the amount of
such prepayment (or liquidation proceeds) exceeds (ii) the amount of interest
paid or collected in connection with such Principal Prepayment or such
liquidation proceeds.

                  PREPAYMENT PERIOD: As to any Distribution Date, (i) with
respect to Actuarial Mortgage Loans, the period beginning with the opening of
business on the sixteenth day of the calendar month preceding the month in which
such Distribution Date occurs (or, with respect to the first Distribution Date,
the period from January 1, 2003) and ending on the close of business on the
fifteenth day of the month in which such Distribution Date occurs or (ii) with
respect to Simple Interest Mortgage Loans, the calendar month preceding such
Distribution Date.

                  PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution Date, the sum of (i) the Principal Remittance Amount for such
Distribution Date, (ii) the funds, if any, withdrawn from the Principal Reserve
Fund and deposited in the Distribution Account pursuant to Section 3.05(e), and
(iii) the Extra Principal Distribution Amount for such Distribution Date

                  PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery
of (or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 2.04, 3.12 and 9.01 hereof)
that is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment. Partial
Principal Prepayments shall be applied by the Master Servicer in accordance with
the terms of the related Mortgage Note.

                  PRINCIPAL REMITTANCE AMOUNT: (a) The sum, without duplication,
of: (i) the scheduled principal collected with respect to the Actuarial Mortgage
Loans during the related Due Period or advanced on or before the related Master
Servicer Advance Date, (ii) prepayments collected in the related Prepayment
Period, with respect to the Actuarial Mortgage Loans and, with respect to the
Simple Interest Mortgage Loans, all payments received from the borrower which
are allocable to principal, (iii) the Stated Principal Balance of each Mortgage
Loan that was repurchased by the Seller or purchased by the Master Servicer,
(iv) the amount, if any, by which the aggregate unpaid principal balance of any
Replacement Mortgage Loans is less than the aggregate unpaid principal balance
of any Deleted Mortgage Loans delivered by the Seller in connection with a
substitution of a Mortgage Loan and (v) all Liquidation Proceeds collected
during the related Due Period (to the extent such Liquidation Proceeds related
to principal); less (b) all non-recoverable Advances relating to principal and
certain expenses reimbursed during the related Due Period.

                                       31
<PAGE>

                  PRINCIPAL RESERVE FUND: The separate Eligible Account created
and initially maintained by the Trustee pursuant to Section 3.05(e) in the name
of the Trustee for the benefit of the Certificateholders and designated "The
Bank of New York in trust for registered holders of CWABS, Inc., Asset-Backed
Certificates, Series 2003-BC1". Funds in the Principal Reserve Fund shall be
held in trust for the Certificateholders for the uses and purposes set forth in
this Agreement and shall not be a part of any REMIC created under this
Agreement. Any investment income earned from Permitted Investments made with
funds in the Principal Reserve Fund will be for the account of the Seller.

                  PRIVATE CERTIFICATES: The Class C Certificates and Class P
Certificates.

                  PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated January
23, 2003, relating to the public offering of the Offered Certificates offered
thereby.

                  PUD:  A Planned Unit Development.

                  PURCHASE PRICE: With respect to any Mortgage Loan (x) required
to be (1) repurchased by the Seller or purchased by the Master Servicer, as
applicable, pursuant to Section 2.02, 2.03 or 3.12 hereof or (2) repurchased by
the Depositor pursuant to Section 2.04 hereof, or (y) that the Master Servicer
has a right to purchase pursuant to Section 3.12 hereof, an amount equal to the
sum of (i) 100% of the unpaid principal balance (or, if such purchase or
repurchase, as the case may be, is effected by the Master Servicer, the Stated
Principal Balance) of the Mortgage Loan as of the date of such purchase and (ii)
accrued interest thereon at the applicable Mortgage Rate (or, if such purchase
or repurchase, as the case may be, is effected by the Master Servicer, at the
Net Mortgage Rate) from (a) the date through which interest was last paid by the
Mortgagor (or, if such purchase or repurchase, as the case may be, is effected
by the Master Servicer, the date through which interest was last advanced and
not reimbursed by the Master Servicer) to (b) the Due Date in the month in which
the Purchase Price is to be distributed to Certificateholders.

                  RATING AGENCY: Each of Moody's and S&P. If any such
organization or its successor is no longer in existence, "Rating Agency" shall
be a nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Trustee. References herein to a given rating category of a Rating Agency
shall mean such rating category without giving effect to any modifiers.

                  REALIZED LOSS: With respect to each Liquidated Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of such Liquidated Loan as of the date of such liquidation, minus (ii)
the Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan. With respect to each Mortgage
Loan that has become the subject of a Deficient Valuation, (i) if the value of
the related Mortgaged Property was reduced below the principal balance of the
related Mortgage Note, the amount by which the value of the Mortgaged Property
was reduced below the principal balance of the related Mortgage Note, and

                                       32
<PAGE>

(ii) if the principal amount due under the related Mortgage Note has been
reduced, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation plus any
reduction in the interest component of the Scheduled Payments. With respect to
each Mortgage Loan that has become the subject of a Debt Service Reduction and
any Distribution Date, the amount, if any, by which the related Scheduled
Payment was reduced.

                  RECORD DATE: With respect to any Distribution Date and the
Certificates, other than the Class A-IO, Class A-R, Class C and Class P
Certificates, the Business Day immediately preceding such Distribution Date, or
if such Certificates are no longer Book-Entry Certificates, the last Business
Day of the month preceding the month of such Distribution Date. With respect to
the Class A-IO, Class A-R, Class C and Class P Certificates, the last Business
Day of the month preceding the month of a Distribution Date.

                  REFERENCE BANK RATE: With respect to any Accrual Period, the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in amounts approximately equal to the
outstanding balance of the Class A-1, Class M-1, Class M-2 and Class B-1
Certificates on such Interest Determination Date, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the rates quoted by one
or more major banks in New York City, selected by the Trustee, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. dollars to leading European
banks for a period of one month in amounts approximately equal to the
outstanding balance of the Class A-1, Class M-1, Class M-2 and Class B-1
Certificates on such Interest Determination Date.

                  REFERENCE BANKS: Barclays Bank PLC, Deutsche Bank and NatWest,
N.A., provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, England, (ii) not
controlling, under the control of or under common control with the Depositor or
any affiliate thereof and (iii) which have been designated as such by the
Trustee.

                  REFINANCING MORTGAGE LOAN: Any Mortgage Loan originated in
connection with the refinancing of an existing mortgage loan.

                  REGULAR CERTIFICATE: Any Offered Certificate other than a
Class A-R Certificate.

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

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

                                       33
<PAGE>

                  REMIC I: The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and to be
administered hereunder, with respect to which a separate REMIC election is to be
made, consisting of: (i) the Mortgage Loans and the related Mortgage Files; (ii)
all payments on and collections in respect of the Mortgage Loans due after the
Cut-off Date (other than Monthly Payments due in January 2003) as shall be on
deposit in the Certificate Account and identified as belonging to the Trust
Fund; (iii) property which secured a Mortgage Loan and which has been acquired
for the benefit of the Certificateholders by foreclosure or deed in lieu of
foreclosure; (iv) Required Insurance Policies pertaining to the Mortgage Loans,
if any; and (v) all proceeds of clauses (i) through (iv) above.

                  REMIC I REGULAR INTERESTS: REMIC I Regular Interest LT-1,
REMIC I Regular Interest LT-IO and REMIC I Regular Interest LT-P.

                  REMIC I REGULAR INTEREST LT-1: A regular interest in REMIC I
that is held as an asset of REMIC II, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC I REGULAR INTEREST LT-IO: A regular interest in REMIC I
that is held as an asset of REMIC II, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC I REGULAR INTEREST LT-P: A regular interest in REMIC I
that is held as an asset of REMIC II, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC I Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II: The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and to be
administered hereunder, with respect to which a separate REMIC election is to be
made, consisting of the REMIC I Regular Interests.

                  REMIC II INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Uncertificated Principal Balance of the REMIC II Regular Interests (other than
REMIC II Regular interest MT-IO-1 and MT-IO-2) then outstanding and (ii) the
Uncertificated Pass-Through Rate for REMIC II Regular Interest MT-AA minus the
Marker Rate, divided by (b) 12.

                  REMIC II OVERCOLLATERALIZED AMOUNT: With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
the REMIC II Regular Interests minus (ii) the Uncertificated Principal Balances
of the REMIC II Regular Interests (other than REMIC II Regular Interests MT-AA,
REMIC II Regular Interest MT-ZZ, REMIC II Regular Interest MT-IO-1 and REMIC II
Regular Interest MT-IO-2), in each case as of such date of determination.

                                       34
<PAGE>

                  REMIC II OVERCOLLATERALIZATION TARGET AMOUNT:1% of the
Overcollateralization Target Amount.

                  REMIC II PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to the product of (i) the aggregate Stated
Principal Balance of the Mortgage Loans then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the sum of the Uncertificated
Principal Balances of REMIC II Regular Interests MT-A1, MT-M1, MT-M2 and MT-B1
and the denominator of which is the sum of the Uncertificated Principal Balances
of REMIC II Regular Interests MT-A1, MT-M1, MT-M2, MT-B1 and MT-ZZ.

                  REMIC II REGULAR INTERESTS: REMIC II Regular Interest MT-AA,
REMIC II Regular Interest MT-A1, REMIC II Regular Interest MT-M1, REMIC II
Regular Interest MT-M2, REMIC II Regular Interest MT-B1, REMIC I Regular
Interest MT-ZZ, REMIC II Regular Interest MT-IO-1, REMIC II Regular Interest
MT-IO-2 and REMIC I Regular Interest MT-P.

                  REMIC II REGULAR INTEREST MT-AA: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II REGULAR INTEREST MT-A1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II REGULAR INTEREST MT-M1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II REGULAR INTEREST MT-M2: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II REGULAR INTEREST MT-B1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II REGULAR INTEREST MT-ZZ: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated

                                       35
<PAGE>

Principal Balance, that bears interest at the related Uncertificated REMIC II
Pass-Through Rate, and that has such other terms as are described herein.

                  REMIC II REGULAR INTEREST MT-P: A regular interest in REMIC II
that is held as an asset of REMIC III, that has an initial principal balance
equal to the related Uncertificated Principal Balance, that bears interest at
the related Uncertificated REMIC II Pass-Through Rate, and that has such other
terms as are described herein.

                  REMIC II REGULAR INTEREST MT-IO-1: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial notional amount
equal to the related Uncertificated Notional Amount, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other terms
as are described herein.

                  REMIC II REGULAR INTEREST MT-IO-2: A regular interest in REMIC
II that is held as an asset of REMIC III, that has an initial notional amount
equal to the related Uncertificated Notional Amount, that bears interest at the
related Uncertificated REMIC II Pass-Through Rate, and that has such other terms
as are described herein.

                  REMIC II REGULAR INTEREST MT-ZZ MAXIMUM INTEREST DEFERRAL
AMOUNT: With respect to any Distribution Date, the sum of (a) the excess of (i)
Uncertificated Accrued Interest calculated with the Uncertificated Pass-Through
Rate for REMIC II Regular Interest MT-ZZ and an Uncertificated Principal Balance
equal to the excess of (x) the Uncertificated Principal Balance of REMIC II
Regular Interest MT-ZZ over (y) the REMIC II Overcollateralized Amount, in each
case for such Distribution Date, over (ii) Uncertificated Accrued Interest on
REMIC II Regular Interests MT-A1, MT-M1, MT-M2 and MT-B1, with the rate on each
such REMIC II Regular Interest subject to a cap equal to the Pass-Through Rate
on the Corresponding Class for the purpose of this calculation.

                  REMIC III: The segregated pool of assets subject hereto,
constituting a portion of the primary trust created hereby and to be
administered hereunder, with respect to which a separate REMIC election is to be
made, consisting of the REMIC II Regular Interests.

                  REMIC III REGULAR CERTIFICATES: Any of the Class A-1, Class
A-IO, Class M-1, Class M-2, Class C or Class P Certificates.

                  REMIC PROVISIONS: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and temporary and final regulations (or, to the extent not
inconsistent with such temporary or final regulations, proposed regulations) and
published rulings, notices and announcements promulgated thereunder, as the
foregoing may be in effect from time to time.

                  REO PROPERTY: A Mortgaged Property acquired by the Master
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.

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<PAGE>

                  REPLACEMENT MORTGAGE LOAN: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan, which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit N, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not less than 90% of the Stated Principal Balance of the
Deleted Mortgage Loan; (ii) with respect to any Fixed Rate Mortgage Loan, have a
Mortgage Rate not less than or no more than 1% per annum higher than the
Mortgage Rate of the Deleted Mortgage Loan and, with respect to any Adjustable
Rate Mortgage Loan: (a) have a Maximum Mortgage Rate no more than 1% per annum
higher or lower than the Maximum Mortgage Rate of the Deleted Mortgage Loan; (b)
have a Minimum Mortgage Rate no more than 1% per annum higher or lower than the
Minimum Mortgage Rate of the Deleted Mortgage Loan; (c) have the same Index,
Periodic Rate Cap and intervals between Adjustment Dates as that of the Deleted
Mortgage Loan and a Gross Margin not more than 1% per annum higher or lower than
that of the Deleted Mortgage Loan; and (d) not permit conversion of the related
Mortgage Rate to a fixed Mortgage Rate; (iii) have the same or higher credit
quality characteristics than that of the Deleted Mortgage Loan; (iv) at the time
of transfer to the Trust Fund, be accruing interest at a Mortgage Rate not more
than 1% per annum higher or lower than that of the Deleted Mortgage Loan; (v)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(vi) have a remaining term to maturity no greater than (and not more than one
year less than) that of the Deleted Mortgage Loan; (vii) not permit conversion
of the Mortgage Rate from a fixed rate to a variable rate or visa versa; (viii)
provide for a prepayment charge on terms substantially similar to those of the
prepayment charge, if any, of the Deleted Mortgage Loan; (ix) have the same lien
priority as the Deleted Mortgage Loan; (x) constitute the same occupancy type as
the Deleted Mortgage Loan; (xi) be a Covered Mortgage Loan if the Deleted
Mortgage Loan was a Covered Mortgage Loan, and (xii) comply with each
representation and warranty (other than a statistical representation or
warranty) set forth in Section 2.03 hereof.

                  REQUEST FOR RELEASE: The Request for Release submitted by the
Master Servicer to the Trustee, substantially in the form of Exhibits M and N,
as appropriate.

                  REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement, including, with respect to the Covered Mortgage Loans, the
Mortgage Insurance Policy.

                  REQUIRED PERCENTAGE: With respect to any Distribution Date
after the Stepdown Date, is equal to a fraction (expressed as a percentage) of
(x) the excess of (I) the aggregate Stated Principal Balance of the Mortgage
Loans for the preceding Distribution Date over (II) the Certificate Principal
Balance of the most senior Class of the Certificates outstanding as of the
preceding Master Servicer Advance Date and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for the preceding Distribution Date.

                  RESPONSIBLE OFFICER: When used with respect to the Trustee,
any Vice President, any Assistant Vice President, the Secretary, any Assistant
Secretary, any Trust Officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such

                                       37
<PAGE>

matter is referred because of such officer's knowledge of and familiarity with
the particular subject.

                  S&P: Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor thereto.

                  SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.

                  SECONDARY CARRYOVER RESERVE FUND DEPOSIT: With respect to any
Distribution Date, an amount equal to the excess of (i) $5,000 over (ii) the
amount of funds on deposit in the Carryover Reserve Fund (after giving effect to
all other deposits to and withdrawals from the Carryover Reserve Fund on such
Distribution Date).

                  SECURITIES ACT:  The Securities Act of 1933, as amended.

                  SELLER: Countrywide Home Loans, Inc., a New York corporation,
and its successors and assigns, in its capacity as seller of the Mortgage Loans
to the Depositor.

                  SELLER SHORTFALL INTEREST REQUIREMENT: For the Master Servicer
Advance Date in February 2003, an amount equal to 30 days interest on the Stated
Principal Balance of each Mortgage Loans that does not have a scheduled payment
of interest due in the related Due Period at the Net Mortgage Rates for such
Mortgage Loans.

                  SERVICING ADVANCES: All customary, reasonable and necessary
"out of pocket" costs and expenses incurred in the performance by the Master
Servicer of its servicing obligations hereunder, including, but not limited to,
the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
(iii) the management and liquidation of any REO Property and (iv) compliance
with the obligations under Section 3.10.

                  SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan or, in the event of any payment
of interest that accompanies a Principal Prepayment in full made by the
Mortgagor, interest at the Servicing Fee Rate on the Stated Principal Balance of
such Mortgage Loan for the period covered by such payment of interest.

                  SERVICING FEE RATE: With respect to each Mortgage Loan, 0.50%
per annum.

                  SERVICING OFFICER: Any officer of the Master Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name and facsimile signature appear on a list of servicing officers
furnished to the Trustee by the Master Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.

                  SIMPLE INTEREST METHOD: The method of allocating a payment to
principal and interest pursuant to which the portion of such payment that is
allocated to interest is equal to the

                                       38
<PAGE>

product of the fixed rate of interest multiplied by the unpaid principal balance
multiplied by the period of time elapsed since the preceding payment of interest
was received and divided by either 360 or 365, as specified in the related
Mortgage Note, and the remainder of such payment is allocated to principal.

                  SIMPLE INTEREST MORTGAGE LOAN: Any Mortgage Loan under which
the portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.

                  STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related REO Property (i) as of the Cut-off Date, the unpaid principal balance of
the Mortgage Loan as of such date (before any adjustment to the amortization
schedule for any moratorium or similar waiver or grace period), after giving
effect to any partial prepayments or Liquidation Proceeds received prior to such
date and to the payment of principal due (with respect to Actuarial Mortgage
Loans) or actually paid (with respect to Simple Interest Mortgage Loans) on or
prior to such date and irrespective any delinquency in payment by the related
mortgagor with respect to Actuarial Mortgage Loans, and (ii) as of any
Distribution Date, the Stated Principal Balance of the Mortgage Loan as of its
Cut-off Date, minus the sum of (a) the principal portion of (i) for the
Actuarial Mortgage Loans, the Scheduled Payments (x) due with respect to such
Mortgage Loan during each Due Period ending prior to such Distribution Date and
(y) that were received by the Master Servicer as of the close of business on the
Determination Date related to such Distribution Date or with respect to which
Advances were made as of the Master Servicer Advance Date related to such
Distribution Date, or (ii) for Simple Interest Mortgage Loans, actual payments
due with respect to the Mortgage Loans on or prior to the end of the most recent
Due Period that were received by the Master Servicer as of the close of business
on the Determination Date related to such Distribution Date, (b) all Principal
Prepayments with respect to such Mortgage Loan received by the Master Servicer
during each Prepayment Period ending prior to such Distribution Date, and (c)
all Liquidation Proceeds collected with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date, to the extent applied by
the Master Servicer as recoveries of principal in accordance with Section 3.12.
The Stated Principal Balance of any Mortgage Loan that becomes a Liquidated Loan
will be zero on the Distribution Date following the Due Period in which such
Mortgage Loan becomes a Liquidated Loan. References herein to the Stated
Principal Balance the Mortgage Loans at any time shall mean the aggregate Stated
Principal Balances of all Mortgage Loans in the Trust Fund as of such time.

                  STEPDOWN DATE: The earlier to occur of (i) the Distribution
Date on which the aggregate Certificate Principal Balance of the Senior
Certificates (other than the Cass A-IO Certificates) is reduced to zero and (ii)
the later to occur of (a) the Distribution Date in February 2006 or (b) the
first Distribution Date on which the Class A-1 Certificate Principal Balance is
less than or equal to 81.00% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date, after giving effect to all
distributions on the Class A-1 Certificates on such Distribution Date.

                  SUBORDINATE CERTIFICATES: The Class M-1, Class M-2 and Class
B-1 Certificates.

                                       39
<PAGE>

                  SUBSERVICER:  As defined in Section 3.02(a).

                  SUBSERVICING AGREEMENT:  As defined in Section 3.02(a).

                  SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term pursuant to Section 2.03(c).

                  SUBSTITUTION AMOUNT: With respect to any Mortgage Loan
substituted pursuant to Section 2.03(c), the excess of (x) the principal balance
of the Mortgage Loan that is substituted for, over (y) the principal balance of
the related substitute Mortgage Loan, each balance being determined as of the
date of substitution.

                  TAX MATTERS PERSON: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T. Initially, this person
shall be the Trustee.

                  TAX MATTERS PERSON CERTIFICATE: The Class A-R Certificate with
a Denomination of $0.05.

                  THREE-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a
Mortgage Rate that is fixed for 36 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.

                  TRANSFER: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.

                  TRIGGER EVENT: With respect to any Distribution Date after the
Stepdown Date, either a Delinquency Trigger Event or a Cumulative Loss Trigger
Event.

                  TRUST FUND: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received on
or with respect thereto on and after the Cut-off Date to the extent not applied
in computing the Cut-off Date Principal Balance thereof, exclusive of interest
not required to be deposited in the Certificate Account pursuant to Section
3.05(b)(ii); (ii) the Certificate Account, the Distribution Account, the
Carryover Reserve Fund, the Principal Reserve Fund, and all amounts deposited
therein pursuant to the applicable provisions of this Agreement; (iii) the Cap
Contract; (iv) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (v) the mortgagee's
rights under any insurance policies with respect to the Mortgage Loan; and (vi)
all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.

                  TRUSTEE: The Bank of New York, a New York banking corporation,
not in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors

                                       40
<PAGE>

may be a party and any successor trustee as may from time to time be serving as
successor trustee hereunder.

                  TRUSTEE FEE: As to any Distribution Date, an amount equal to
one-twelfth of the Trustee Fee Rate multiplied by the Pool Stated Principal
Balance for such Distribution Date.

                  TRUSTEE FEE RATE: With respect to each Mortgage Loan, 0.009%
per annum.

                  TWO-YEAR HYBRID MORTGAGE LOAN: A Mortgage Loan having a
Mortgage Rate that is fixed for 24 months after origination thereof before such
Mortgage Rate becomes subject to adjustment.

                  UNCERTIFICATED ACCRUED INTEREST: With respect to any
Uncertificated Regular Interest for any Distribution Date, one month's interest
at the related Uncertificated Pass-Through Rate for such Distribution Date,
accrued on the Uncertificated Principal, immediately prior to such Distribution
Date. Uncertificated Accrued Interest for the Uncertificated Regular Interests
shall accrue on the basis of a 360-day year consisting of twelve 30-day months.
For purposes of calculating the amount of Uncertificated Accrued Interest for
the REMIC I Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls (to the extent not covered by Compensating Interest) relating to the
Mortgage Loans for any Distribution Date shall be allocated first to REMIC I
Regular Interest LT-I and REMIC I Regular Interest LT-P and then, to REMIC I
Regular Interest LT-IO, in each case to the extent of one month's interest at
the then applicable respective Uncertificated REMIC I Pass-Through Rate on the
respective Uncertificated Principal Balance of each such REMIC I Regular
Interest. For purposes of calculating the amount of Uncertificated Accrued
Interest for the REMIC II Regular Interests for any Distribution Date, any
Prepayment Interest Shortfalls (to the extent not covered by Compensating
Interest) relating to the Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Accrued Interest payable to REMIC II Regular
Interest MT-AA and REMIC II Regular Interest MT-ZZ up to an aggregate amount
equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%, respectively,
and thereafter any remaining Prepayment Interest Shortfalls (to the extent not
covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated among REMIC II Regular Interests MT-AA,
MT-A1, MT-M1, MT-M2, MT-B1, MT-ZZ, MT-IO-1 and MT-IO-2, pro rata based on, and
to the extent of, Uncertificated Accrued Interest, as calculated without
application of this sentence.

                  UNCERTIFICATED NOTIONAL AMOUNT: With respect to any
Distribution Date and REMIC II Regular Interest MT-IO-1 and REMIC II Regular
Intetest MT-IO-2, an amount equal to the Uncertificated Principal Balance of RE
MIC I Regular Interest LT-IO.

                  UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC I
Pass-Through Rate or the Uncertificated REMIC II Pass-Through Rate.

                  UNCERTIFICATED PRINCIPAL BALANCE: The principal amount of any
Uncertificated Regular Interest outstanding as of any date of determination. The
Uncertificated Principal

                                       41
<PAGE>

Balance of each Uncertificated Regular Interest shall be reduced by all
distributions of principal made on such Uncertificated Regular Interest, as
applicable, on such Distribution Date and, if and to the extent necessary and
appropriate, shall be further reduced in such Distribution Date by Realized
Losses. The Uncertificated Principal Balance of each Uncertificated Regular
Interest shall never be less than zero.

                  UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to any
Distribution Date, a per annum rate equal to the weighted average Adjusted Net
Mortgage Rate.

                  UNCERTIFICATED REMIC II PASS-THROUGH RATE: With respect to any
Distribution Date, a per annum rate equal:

                  (a) With respect to REMIC II Regular Interest MT-AA, REMIC II
Regular Interest MT-A1, REMIC II Regular Interest MT-M1, REMIC II Regular
Interest MT-M2, REMIC II Regular Interest MT-B1, REMIC II Regular Interest MT-ZZ
and REMIC II Regular Interest MT-P, and (i) the first 24 Distribution Dates, a
per annum rate equal to equal to the weighted average of (x) with respect to
REMIC I Regular Interest LT-1 and REMIC I Regular Interest LT-P, the
Uncertificated REMIC I Pass-Through Rate for each such REMIC I Regular Interest
for such Distribution Date and, (y) with respect to REMIC I Regular Interest
LT-IO, the excess, if any, of (1) the Uncertificated REMIC I Pass-Through Rate
with respect to such REMIC I Regular Interest for such Distribution Date over
(2)(A) for the first twelve Distribution Dates, 1.000% per annum and (B) for the
12th through the 24th Distribution Dates, 0.500%; weighted on the basis of the
Uncertificated Principal Balance of each REMIC I Regular Interest and (iii)
thereafter, a per annum rate equal to the weighted average of the Uncertificated
Pass-Through Rates for the REMIC I Regular Interests, weighted on the basis of
the respective Uncertificated Principal Balances thereof for such Distribution
Date.

                  (b) With respect to REMIC II Regular Interest MT-IO-1 and the
first 12 Distribution Dates, .500%, and with respect to REMIC II Regular
Interest MT-IO-1 and any Distribution Date thereafter, 0.00% per annum.

                  (c) With respect to REMIC II Regular Interest MT-IO-2 and the
first 24 Distribution Dates, .500%, and with respect to REMIC II Regular
Interest MT-IO-2 and any Distribution Date thereafter, 0.00% per annum.

                  UNCERTIFICATED REGULAR INTERESTS: The REMIC I Regular
Interests and the REMIC II Regular Interests.

                  UNDERWRITER'S EXEMPTION: Prohibited Transaction Exemption
2002-41, 67 Fed. Reg. 54487 (2002), as amended (or any successor thereto), or
any substantially similar administrative exemption granted by the U.S.
Department of Labor.

                                       42
<PAGE>

                  UNPAID REALIZED LOSS AMOUNT: For any Class of Subordinate
Certificates, the portion of the aggregate Applied Realized Loss Amount
previously allocated to that Class remaining unpaid from prior Distribution
Dates.

                  VOTING RIGHTS: The portion of the voting rights of all the
Certificates that is allocated to any Certificates for purposes of the voting
provisions hereunder. Voting Rights allocated to each Class of Certificates
shall be allocated 96% to the Certificates other than the Class A-IO, Class A-R,
Class C and Class P Certificates (with the allocation among the Certificates to
be in proportion to the Certificate Principal Balance of each Class relative to
the Certificate Principal Balance of all other such Classes), and 1% to each of
the Class A-IO, Class A-R, Class C and Class P Certificates. Voting Rights will
be allocated among the Certificates of each such Class in accordance with their
respective Percentage Interests.

                  WEIGHTED MAXIMUM RATE CAP: As of any Distribution Date, a rate
equal to the weighted average of the Adjusted Maximum Mortgage Rates on the
Mortgage Loans.

                                       43
<PAGE>

                                  ARTICLE II.

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

                  Section 2.01. CONVEYANCE OF MORTGAGE LOANS.

                  (a) The Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Seller in and to the Mortgage Loans, including all interest and
principal received and receivable by the Seller on or with respect to the
Mortgage Loans after the Cut-off Date (to the extent not applied in computing
the Cut-off Date Principal Balance thereof) or deposited into the Certificate
Account by the Seller as a Certificate Account Deposit as provided in this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date. The Seller
confirms that, concurrently with the transfer and assignment, it has deposited
into the Certificate Account the Certificate Account Deposit.

                  Immediately upon the conveyance of the Mortgage Loans referred
to in the preceding paragraph, the Depositor sells, transfers, assigns, sets
over and otherwise conveys to the Trustee for benefit of the Certificateholders,
without recourse, all right title and interest in the Mortgage Loans.

                  The Seller further agrees to assign all of its right, title
and interest in and to the interest rate cap transaction evidenced by the
Confirmation And Agreement , and to cause all of its obligations in respect of
such transaction to be assumed by, the Trustee on behalf of the Trust Fund, on
the terms and conditions set forth in the Cap Contract Assignment Agreement.

                  (b) [reserved]

                  (c) The Seller has entered into this Agreement in
consideration for the purchase of the Mortgage Loans by the Depositor and has
agreed to take the actions specified herein. The Depositor, concurrently with
the execution and delivery of this Agreement, hereby sells, transfers, assigns
and otherwise conveys to the Trustee for the use and benefit of the
Certificateholders, without recourse, all right title and interest in the
portion of the Trust Fund not otherwise conveyed to the Trustee pursuant to
Sections 2.01(a) or (b).

                  (d) [reserved]

                  (e) [reserved]

                  (f) [reserved]

                  (g) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered to, and deposited with, the
Co-Trustee (or, in the case of the Delay

                                       44
<PAGE>

Delivery Mortgage Loans, will deliver to, and deposit with, the Co-Trustee
within the time periods specified in the definition of Delay Delivery Mortgage
Loans) (except as provided in clause (vi) below) for the benefit of the
Certificateholders, the following documents or instruments with respect to each
such Mortgage Loan so assigned (with respect to each Mortgage Loan, clause (i)
through (vi) below, together, the "Mortgage File" for each such Mortgage Loan):

                  (i) the original Mortgage Note, endorsed by the Seller or the
         originator of such Mortgage Loan, without recourse, in the following
         form: "Pay to the order of ________________ without recourse", with all
         intervening endorsements that show a complete chain of endorsement from
         the originator to the Seller, or, if the original Mortgage Note has
         been lost or destroyed and not replaced, an original lost note
         affidavit from the Seller, stating that the original Mortgage Note was
         lost or destroyed, together with a copy of the related Mortgage Note;

                  (ii) in the case of each Mortgage Loan that is not a MERS
         Mortgage Loan, the original recorded Mortgage, and in the case of each
         MERS Mortgage Loan, the original Mortgage, noting the presence of the
         MIN of the Mortgage Loan and language indicating that the Mortgage Loan
         is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of
         recording indicated thereon, or a copy of the Mortgage certified by the
         public recording office in which such Mortgage has been recorded;

                  (iii) in the case of each Mortgage Loan that is not a MERS
         Mortgage Loan, a duly executed assignment of the Mortgage to
         "Asset-Backed Certificates, Series 2003-BC1, CWABS, Inc., by The Bank
         of New York, a New York banking corporation, as trustee under the
         Pooling and Servicing Agreement dated as of January 1, 2003, without
         recourse" (each such assignment, when duly and validly completed, to be
         in recordable form and sufficient to effect the assignment of and
         transfer to the assignee thereof, under the Mortgage to which such
         assignment relates);

                  (iv) the original recorded assignment or assignments of the
         Mortgage together with all interim recorded assignments of such
         Mortgage (noting the presence of a MIN in the case of each MERS
         Mortgage Loan);

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

                  (vi) the original or duplicate original lender's title policy
         or a printout of the electronic equivalent and all riders thereto or,
         in the event such original title policy has not been received from the
         insurer, such original or duplicate original lender's title policy and
         all riders thereto shall be delivered within one year of the Closing
         Date.

         In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at the Seller's own expense, the
MERS(R) System to indicate (and provide evidence to the Trustee that it has done
so) that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the

                                       45
<PAGE>

Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code "[IDENTIFY TRUSTEE SPECIFIC CODE]" in the field "[IDENTIFY THE
FIELD NAME FOR TRUSTEE]" which identifies the Trustee and (b) the code
"[IDENTIFY SERIES SPECIFIC CODE NUMBER]" in the field "Pool Field" which
identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Seller further agrees that it will not, and will not permit
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.

                  In the event that in connection with any Mortgage Loan that is
not a MERS Mortgage Loan the Seller cannot deliver the original recorded
Mortgage or all interim recorded assignments of the Mortgage satisfying the
requirements of clause (ii), (iii) or (iv) concurrently with the execution and
delivery hereof, the Seller shall deliver or cause to be delivered to the
Co-Trustee a true copy of such Mortgage and of each such undelivered interim
assignment of the Mortgage each certified by the Seller, the applicable title
company, escrow agent or attorney, or the originator of such Mortgage, as the
case may be, to be a true and complete copy of the original Mortgage or
assignment of Mortgage submitted for recording. For any such Mortgage Loan that
is not a MERS Mortgage Loan the Seller shall promptly deliver or cause to be
delivered to the Co-Trustee such original Mortgage and such assignment or
assignments with evidence of recording indicated thereon upon receipt thereof
from the public recording official, or a copy thereof, certified, if
appropriate, by the relevant recording office, but in no event shall any such
delivery be made later than 270 days following the Closing Date; provided that
in the event that by such date the Seller is unable to deliver or cause to be
delivered each such Mortgage and each interim assignment by reason of the fact
that any such documents have not been returned by the appropriate recording
office, or, in the case of each interim assignment, because the related Mortgage
has not been returned by the appropriate recording office, the Seller shall
deliver or cause to be delivered such documents to the Co-Trustee as promptly as
possible upon receipt thereof. If the public recording office in which a
Mortgage or interim assignment thereof is recorded retains the original of such
Mortgage or assignment, a copy of the original Mortgage or assignment so
retained, with evidence of recording thereon, certified to be true and complete
by such recording office, shall satisfy the Seller's obligations in Section
2.01. If any document submitted for recording pursuant to this Agreement is (x)
lost prior to recording or rejected by the applicable recording office, the
Seller shall immediately prepare or cause to be prepared a substitute and submit
it for recording, and shall deliver copies and originals thereof in accordance
with the foregoing or (y) lost after recording, the Seller shall deliver to the
Co-Trustee a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original recorded document. The
Seller shall promptly forward or cause to be forwarded to the Co-Trustee (x)
from time to time additional original documents evidencing an assumption or
modification of a Mortgage Loan and (y) any other documents required to be
delivered by the Depositor or the Master Servicer to the Trustee within the time
periods specified in this Section 2.01.

                                       46
<PAGE>

                  With respect to each Mortgage Loan other than a MERS Mortgage
Loan as to which the related Mortgaged Property and Mortgage File are located in
(a) the State of California or (b) any other jurisdiction under the laws of
which the recordation of the assignment specified in clause (iii) above is not
necessary to protect the Trustee's and the Certificateholders, interest in the
related Mortgage Loan, as evidenced by an Opinion of Counsel, delivered by the
Seller to the Trustee and a copy to the Rating Agencies, in lieu of recording
the assignment specified in clause (iii) above, the Seller may deliver an
unrecorded assignment in blank, in form otherwise suitable for recording to the
Co-Trustee; provided that if the related Mortgage has not been returned from the
applicable public recording office, such assignment, or any copy thereof, of the
Mortgage may exclude the information to be provided by the recording office. As
to any Mortgage Loan other than a MERS Mortgage Loan, the procedures of the
preceding sentence shall be applicable only so long as the related Mortgage File
is maintained in the possession of the Co-Trustee in the State or jurisdiction
described in such sentence. In the event that with respect to Mortgage Loans
other than MERS Mortgage Loans (i) the Seller, the Depositor or the Master
Servicer gives written notice to the Trustee that recording is required to
protect the right, title and interest of the Trustee on behalf of the
Certificateholders in and to any Mortgage Loan, (ii) a court recharacterizes the
sale of the Mortgage Loans as a financing, or (iii) as a result of any change in
or amendment to the laws of the State or jurisdiction described in the first
sentence of this paragraph or any applicable political subdivision thereof, or
any change in official position regarding application or interpretation of such
laws, including a holding by a court of competent jurisdiction, such recording
is so required, the Trustee or the Co-Trustee shall complete the assignment in
the manner specified in clause (iii) of the second paragraph of this Section
2.01 and the Seller shall submit or cause to be submitted for recording as
specified above or, should the Seller fail to perform such obligations, the
Trustee shall cause the Master Servicer, at the Master Servicer's expense, to
cause each such previously unrecorded assignment to be submitted for recording
as specified above. In the event a Mortgage File is released to the Master
Servicer as a result of the Master Servicer's having completed a Request for
Release in the form of Exhibit M, the Trustee shall complete the assignment of
the related Mortgage in the manner specified in clause (iii) of the second
paragraph of this Section 2.01.

                  So long as the Co-Trustee maintains an office in the State of
California, the Co-Trustee shall maintain possession of and not remove or
attempt to remove from the State of California any of the Mortgage Files as to
which the related Mortgaged Property is located in such State. In the event that
the Seller fails to record an assignment of a Mortgage Loan as herein provided
within 90 days of notice of an event set forth in clause (i), (ii) or (iii) of
the above paragraph, the Master Servicer shall prepare and, if required
hereunder, file such assignments for recordation in the appropriate real
property or other records office. The Seller hereby appoints the Master Servicer
(and any successor servicer hereunder) as its attorney-in-fact with full power
and authority acting in its stead for the purpose of such preparation, execution
and filing.

                  In the case of Mortgage Loans that become the subject of a
Principal Prepayment between the Closing Date and the Cut-off Date, the Seller
shall deposit or cause to be deposited in the Certificate Account the amount
required to be deposited therein with respect to such payment pursuant to
Section 3.05 hereof.

                                       47
<PAGE>

                  Notwithstanding anything to the contrary in this Agreement,
within thirty days after the Closing Date, the Seller shall either (i) deliver
to the Co-Trustee the Mortgage File as required pursuant to this Section 2.01
for each Delay Delivery Mortgage Loan or (ii) (A) repurchase the Delay Delivery
Mortgage Loan or (B) substitute the Delay Delivery Mortgage Loan for a
Replacement Mortgage Loan, which repurchase or substitution shall be
accomplished in the manner and subject to the conditions set forth in Section
2.03, provided that if the Seller fails to deliver a Mortgage File for any Delay
Delivery Mortgage Loan within the period provided in the prior sentence, the
cure period provided for in Section 2.02 or in Section 2.03 shall not apply to
the initial delivery of the Mortgage File for such Delay Delivery Mortgage Loan,
but rather the Seller shall have five (5) Business Days to cure such failure to
deliver; and provided further, that the Seller shall use its best efforts to
substitute rather than repurchase. The Seller shall promptly provide each Rating
Agency with written notice of any cure, repurchase or substitution made pursuant
to the proviso of the preceding sentence. On or before the thirtieth (30th) day
(or if such thirtieth day is not a Business Day, the succeeding Business Day)
after the Closing Date (in the case of the Mortgage Loans), the Trustee shall,
in accordance with the provisions of Section 2.02, send a Delay Delivery
Certification substantially in the form annexed hereto as Exhibit G-3 (with any
applicable exceptions noted thereon) for all Delay Delivery Mortgage Loan
delivered within thirty (30) days after such date. The Trustee will promptly
send a copy of such Delay Delivery Certification to each Rating Agency.

                  Section 2.02. ACCEPTANCE OF THE MORTGAGE LOANS.

                  (a) The Co-Trustee acknowledges receipt, subject to the
limitations contained in and any exceptions noted in the Initial Certification
in the form annexed hereto as Exhibit G-1 and in the list of exceptions attached
thereto, of the documents referred to in clauses (i) and (iii) of Section
2.01(g) above with respect to the Mortgage Loans and all other assets included
in the Trust Fund and declares that it holds and will hold such documents and
the other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold such other assets included in the Trust Fund, in trust for
the exclusive use and benefit of all present and future Certificateholders.

                  The Trustee agrees to execute and deliver on the Closing Date
to the Depositor, the Master Servicer and the Seller an Initial Certification
substantially in the form annexed hereto as Exhibit G-1 to the effect that, as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as not covered by such certification), the documents described in
Section 2.01(g)(i) and, in the case of each Mortgage Loan that is not a MERS
Mortgage Loan, the documents described in Section 2.01(g)(iii), with respect to
such Mortgage Loan are in the Co-Trustee's possession, and based on its review
and examination and only as to the foregoing documents, such documents appear
regular on their face and relate to such Mortgage Loan. The Trustee agrees to
execute and deliver within 30 days after the Closing Date to the Depositor, the
Master Servicer and the Seller an Interim Certification substantially in the
form annexed hereto as Exhibit G-2 to the effect that, as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or any Mortgage Loan specifically identified in such certification as not
covered by such certification), all documents required to be delivered to the

                                       48
<PAGE>

Co-Trustee pursuant to this Agreement with respect to such Mortgage Loan are in
its possession (except those described in Section 2.01(g)(vi)) and based on its
review and examination and only as to the foregoing documents, (i) such
documents appear regular on their face and relate to such Mortgage Loan, and
(ii) the information set forth in items (i), (iv), (v), (vi), (viii), (xi) and
(xiv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. On or before the thirtieth (30th)
day after the Closing Date (or if such thirtieth day is not a Business Day, the
succeeding Business Day), the Trustee shall deliver to the Depositor, the Master
Servicer and the Seller a Delay Delivery Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit G-3, with any
applicable exceptions noted thereon. The Co-Trustee or the Trustee, as
applicable, shall be under no duty or obligation to inspect, review or examine
such documents, instruments, certificates or other papers to determine that the
same are genuine, enforceable or appropriate for the represented purpose or that
they have actually been recorded in the real estate records or that they are
other than what they purport to be on their face.

                  Not later than 180 days after the Closing Date, the Trustee
shall deliver to the Depositor, the Master Servicer and the Seller (and to any
Certificateholder that so requests) a Final Certification with respect to the
Mortgage Loans substantially in the form annexed hereto as Exhibit H, with any
applicable exceptions noted thereon.

                  In connection with the Trustee's completion and delivery of
such Final Certification, the Co-Trustee, at the Trustee's direction, shall
review each Mortgage File with respect to the Mortgage Loans to determine that
such Mortgage File contains the documents listed in Section 2.01(g). If, in the
course of such review, the Co-Trustee finds any document or documents
constituting a part of such Mortgage File that do not meet the requirements of
clauses (i)-(iv) and (vi) of Section 2.01(g), the Trustee shall include such
exceptions in such Final Certification (and the Trustee shall state in such
Final Certification whether any Mortgage File does not then include the original
or duplicate original lender's title policy or a printout of the electronic
equivalent and all riders thereto). If the public recording office in which a
Mortgage or assignment thereof is recorded retains the original of such Mortgage
or assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall be deemed to satisfy the requirements of clause (ii),
(iii) or (iv) of Section 2.01(g), as applicable. The Seller shall promptly
correct or cure such defect referred to above within 90 days from the date it
was so notified of such defect and, if the Seller does not correct or cure such
defect within such period, the Seller shall either (A) if the time to cure such
defect expires prior to the end of the second anniversary of the Closing Date,
substitute for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03, or (B) purchase such Mortgage Loan from the Trust
Fund within 90 days from the date the Seller was notified of such defect in
writing at the Purchase Price of such Mortgage Loan; provided that any such
substitution pursuant to (A) above or repurchase pursuant to (B) above shall not
be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any substitution pursuant to (A) above shall
not be effected prior to the additional delivery to the Co-Trustee of a Request
for Release substantially in the form of Exhibit N. No substitution will be made
in any calendar month after the Determination Date for such month.

                                       49
<PAGE>

The Purchase Price for any such Mortgage Loan shall be deposited by the Seller
in the Certificate Account and, upon receipt of such deposit and certification
with respect thereto in the form of Exhibit N hereto, the Co-Trustee shall
release the related Mortgage File to the Seller and shall execute and deliver at
the Seller's request such instruments of transfer or assignment as the Seller
has prepared, in each case without recourse, as shall be necessary to vest in
the Seller, or a designee, the Trust Fund's interest in any Mortgage Loan
released pursuant hereto. If pursuant to the foregoing provisions the Seller
repurchases an Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer
shall cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to the Seller and shall cause
such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations.

                  The Co-Trustee shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions set
forth herein. The Seller shall promptly deliver to the Co-Trustee, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Mortgage File that come into the possession of the
Seller from time to time.

                  It is understood and agreed that the obligation of the Seller
to substitute for or to purchase any Mortgage Loan that does not meet the
requirements of Section 2.02(a)(A) or (B) above shall constitute the sole remedy
respecting such defect available to the Trustee, the Co-Trustee, the Depositor
and any Certificateholder against the Seller.

                  (b) [reserved]

                  Section 2.03. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
                                MASTER SERVICER AND THE SELLER.

                  (a) The Master Servicer hereby represents and warrants to the
Depositor, the Seller and the Trustee as follows, as of the date hereof with
respect to the Mortgage Loans:

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

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

                                       50
<PAGE>

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

                  (iii) The execution and delivery of this Agreement by the
         Master Servicer, the servicing of the Mortgage Loans by the Master
         Servicer under this Agreement, the consummation of any other of the
         transactions contemplated by this Agreement, and the fulfillment of or
         compliance with the terms hereof are in the ordinary course of business
         of the Master Servicer and will not (A) result in a material breach of
         any term or provision of the certificate of limited partnership,
         partnership agreement or other organizational document of the Master
         Servicer or (B) materially conflict with, result in a material breach,
         violation or acceleration of, or result in a material default under,
         the terms of any other material agreement or instrument to which the
         Master Servicer is a party or by which it may be bound, or (C)
         constitute a material violation of any statute, order or regulation
         applicable to the Master Servicer of any court, regulatory body,
         administrative agency or governmental body having jurisdiction over the
         Master Servicer; and the Master Servicer is not in breach or violation
         of any material indenture or other material agreement or instrument, or
         in violation of any statute, order or regulation of any court,
         regulatory body, administrative agency or governmental body having
         jurisdiction over it which breach or violation may materially impair
         the Master Servicer's ability to perform or meet any of its obligations
         under this Agreement.

                  (iv) The Master Servicer is an approved servicer of
         conventional mortgage loans for Fannie Mae or Freddie Mac and is a
         mortgagee approved by the Secretary of Housing and Urban Development
         pursuant to sections 203 and 211 of the National Housing Act.

                  (v) No litigation is pending or, to the best of the Master
         Servicer's knowledge, threatened, against the Master Servicer that
         would materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Master Servicer
         to service the Mortgage Loans or to perform any of its other
         obligations under this Agreement in accordance with the terms hereof.

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Master Servicer of, or compliance by the Master
         Servicer with, this Agreement or the consummation of the transactions
         contemplated hereby, or if any such consent, approval, authorization or
         order is required, the Master Servicer has obtained the same.

                  (vii) The Master Servicer is a member of MERS in good
         standing, and will comply in all material respects with the rules and
         procedures of MERS in connection with the

                                       51
<PAGE>

         servicing of the Mortgage Loans for as long as such Mortgage Loans are
         registered with MERS.

                  (b) The Seller hereby represents and warrants to the
Depositor, the Master Servicer and the Trustee as follows, as of the Cut-off
Date (unless otherwise indicated or the context otherwise requires, percentages
with respect to the Mortgage Loans are measured by the Cut-off Date Principal
Balance):

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

                  (ii) The Seller has the full corporate power and authority to
         sell each Mortgage Loan, and to execute, deliver and perform, and to
         enter into and consummate the transactions contemplated by this
         Agreement and has duly authorized by all necessary corporate action on
         the part of the Seller the execution, delivery and performance of this
         Agreement; and this Agreement , assuming the due authorization,
         execution and delivery hereof by the other parties hereto, constitutes
         a legal, valid and binding obligation of the Seller, enforceable
         against the Seller in accordance with its terms, except that (a) the
         enforceability hereof may be limited by bankruptcy, insolvency,
         moratorium, receivership and other similar laws relating to creditors'
         rights generally and (b) the remedy of specific performance and
         injunctive and other forms of equitable relief may be subject to
         equitable defenses and to the discretion of the court before which any
         proceeding therefor may be brought.

                  (iii) The execution and delivery of this Agreement by the
         Seller, the sale of the Mortgage Loans by the Seller under this
         Agreement, the consummation of any other of the transactions
         contemplated by this Agreement, and the fulfillment of or compliance
         with the terms hereof and thereof are in the ordinary course of
         business of the Seller and will not (A) result in a material breach of
         any term or provision of the charter or by-laws of the Seller or (B)
         materially conflict with, result in a material breach, violation or
         acceleration of, or result in a material default under, the terms of
         any other material agreement or instrument to which the Seller is a
         party or by which it may be bound, or (C) constitute a material
         violation of any statute, order or regulation applicable to the Seller
         of any court, regulatory body, administrative agency or governmental
         body having jurisdiction over the Seller; and the Seller is not in
         breach or violation of any material indenture or other material
         agreement or instrument, or in violation of any statute, order or
         regulation of any court, regulatory body, administrative agency or
         governmental body

                                       52
<PAGE>

         having jurisdiction over it which breach or violation may materially
         impair the Seller's ability to perform or meet any of its obligations
         under this Agreement.

                  (iv) The Seller is an approved seller of conventional mortgage
         loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the
         Secretary of Housing and Urban Development pursuant to sections 203 and
         211 of the National Housing Act.

                  (v) No litigation is pending or, to the best of the Seller's
         knowledge, threatened, against the Seller that would materially and
         adversely affect the execution, delivery or enforceability of this
         Agreement or the ability of the Seller to sell the Mortgage Loans or to
         perform any of its other obligations under this Agreement in accordance
         with the terms hereof.

                  (vi) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Seller of, or compliance by the Seller with,
         this Agreement or the consummation of the transactions contemplated
         hereby, or if any such consent, approval, authorization or order is
         required, the Seller has obtained the same.

                  (vii) The information set forth on Exhibit F-1 hereto with
         respect to each Mortgage Loan is true and correct in all material
         respects as of the Closing Date.

                  (viii) The Seller will treat the transfer of the Mortgage
         Loans to the Depositor as a sale of the Mortgage Loans for all tax,
         accounting and regulatory purposes.

                  (ix) None of the Mortgage Loans are more than 60 days
         delinquent in payment of principal and interest.

                  (x) No Mortgage Loan secured by a first lien on the related
         Mortgaged Property had a Loan-to-Value Ratio at origination in excess
         of 100%.

                  (xi) Each Mortgage Loan is secured by a valid and enforceable
         first lien on the related Mortgaged Property , subject only to (1) the
         lien of non-delinquent current real property taxes and assessments, (2)
         covenants, conditions and restrictions, rights of way, easements and
         other matters of public record as of the date of recording of such
         Mortgage, such exceptions appearing of record being acceptable to
         mortgage lending institutions generally or specifically reflected in
         the appraisal made in connection with the origination of the related
         Mortgage Loan, and (3) other matters to which like properties are
         commonly subject that do not materially interfere with the benefits of
         the security intended to be provided by such Mortgage.

                  (xii) Immediately prior to the assignment of each Mortgage
         Loan to the Depositor, the Seller had good title to, and was the sole
         owner of, such Mortgage Loan free and clear of any pledge, lien,
         encumbrance or security interest and had full right and authority,

                                       53
<PAGE>

         subject to no interest or participation of, or agreement with, any
         other party, to sell and assign the same pursuant to this Agreement.

                  (xiii) There is no delinquent tax or assessment lien against
         any Mortgaged Property.

                  (xiv) There is no valid offset, claim, defense or counterclaim
         to any Mortgage Note or Mortgage, including the obligation of the
         Mortgagor to pay the unpaid principal of or interest on such Mortgage
         Note.

                  (xv) There are no mechanics' liens or claims for work, labor
         or material affecting any Mortgaged Property that are or may be a lien
         prior to, or equal with, the lien of such Mortgage, except those that
         are insured against by the title insurance policy referred to in item
         (xix) below.

                  (xvi) As of the Closing Date, to the best of Seller's
         knowledge, each Mortgaged Property is free of material damage and is in
         good repair.

                  (xvii) To the best of the Seller's knowledge, the Mortgage
         Loans complied at origination in all material respects with applicable
         state and federal laws, including, without limitation, usury, equal
         credit opportunity, real estate settlement procedures, truth-in-lending
         and disclosure laws, and consummation of the transactions contemplated
         hereby will not involve the violation of any such laws.

                  (xviii) As of the Closing Date neither the Seller nor any
         prior holder of any Mortgage has modified the Mortgage in any material
         respect (except that a Mortgage Loan may have been modified by a
         written instrument that has been recorded or submitted for recordation,
         if necessary, to protect the interests of the Certificateholders and
         the original or a copy of which has been delivered to the Trustee);
         satisfied, cancelled or subordinated such Mortgage in whole or in part;
         released the related Mortgaged Property in whole or in part from the
         lien of such Mortgage; or executed any instrument of release,
         cancellation, modification (except as expressly permitted above) or
         satisfaction with respect thereto.

                  (xix) A lender's policy of title insurance together with a
         condominium endorsement and extended coverage endorsement, if
         applicable, in an amount at least equal to the Cut-off Date Stated
         Principal Balance of each such Mortgage Loan or a commitment (binder)
         to issue the same was effective on the date of the origination of each
         Mortgage Loan, each such policy is valid and remains in full force and
         effect, and each such policy was issued by a title insurer qualified to
         do business in the jurisdiction where the Mortgaged Property is located
         and acceptable to Fannie Mae or Freddie Mac and is in a form acceptable
         to Fannie Mae or Freddie Mac, which policy insures the Seller and
         successor owners of indebtedness secured by the insured Mortgage, as to
         the first priority lien, of the Mortgage subject to the exceptions set
         forth in paragraph (iv) above; to the best of the Seller's knowledge,
         no claims have been made under such mortgage title insurance policy and
         no prior holder of the related Mortgage, including the Seller, has
         done, by act

                                       54
<PAGE>

         or omission, anything that would impair the coverage of such mortgage
         title insurance policy.

                  (xx) No Mortgage Loan was the subject of a Principal
         Prepayment in full between the Closing Date and the Cut-off Date.

                  (xxi) To the best of the Seller's knowledge, all of the
         improvements that were included for the purpose of determining the
         Appraised Value of the Mortgaged Property lie wholly within the
         boundaries and building restriction lines of such property, and no
         improvements on adjoining properties encroach upon the Mortgaged
         Property.

                  (xxii) To the best of the Seller's knowledge, no improvement
         located on or being part of the Mortgaged Property is in violation of
         any applicable zoning law or regulation. To the best of the Seller's
         knowledge, all inspections, licenses and certificates required to be
         made or issued with respect to all occupied portions of the Mortgaged
         Property and, with respect to the use and occupancy of the same,
         including but not limited to certificates of occupancy and fire
         underwriting certificates, have been made or obtained from the
         appropriate authorities, unless the lack thereof would not have a
         material adverse effect on the value of such Mortgaged Property, and
         the Mortgaged Property is lawfully occupied under applicable law.

                  (xxiii) The Mortgage Note and the related Mortgage are
         genuine, and each is the legal, valid and binding obligation of the
         maker thereof, enforceable in accordance with its terms and under
         applicable law, except that (a) the enforceability thereof may be
         limited by bankruptcy, insolvency, moratorium, receivership and other
         similar laws relating to creditors' rights generally and (b) the remedy
         of specific performance and injunctive and other forms of equitable
         relief may be subject to equitable defenses and to the discretion of
         the court before which any proceeding therefor may be brought. To the
         best of the Seller's knowledge, all parties to the Mortgage Note and
         the Mortgage had legal capacity to execute the Mortgage Note and the
         Mortgage and each Mortgage Note and Mortgage have been duly and
         properly executed by such parties.

                  (xxiv) The proceeds of the Mortgage Loan have been fully
         disbursed, there is no requirement for future advances thereunder, and
         any and all requirements as to completion of any on-site or off-site
         improvements and as to disbursements of any escrow funds therefor have
         been complied with. All costs, fees and expenses incurred in making, or
         closing or recording the Mortgage Loans were paid.

                  (xxv) The related Mortgage contains customary and enforceable
         provisions that render the rights and remedies of the holder thereof
         adequate for the realization against the Mortgaged Property of the
         benefits of the security, including, (i) in the case of a Mortgage
         designated as a deed of trust, by trustee's sale, and (ii) otherwise by
         judicial foreclosure.

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<PAGE>

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

                  (xxvii) Each Mortgage Note and each Mortgage is in
         substantially one of the forms attached hereto as Exhibit P acceptable
         in form to Fannie Mae or Freddie Mac.

                  (xxviii) There exist no deficiencies with respect to escrow
         deposits and payments, if such are required, for which customary
         arrangements for repayment thereof have not been made, and no escrow
         deposits or payments of other charges or payments due the Seller have
         been capitalized under the Mortgage or the related Mortgage Note.

                  (xxix) The origination, underwriting, servicing and collection
         practices used by the Seller with respect to each Mortgage Loan have
         been in all respects legal, proper, prudent and customary in the
         mortgage lending and servicing business, as conducted by prudent
         lending institutions which service mortgage loans of the same type in
         the jurisdiction in which the Mortgaged Property is located.

                  (xxx) There is no pledged account or other security other than
         real estate securing the Mortgagor's obligations.

                  (xxxi) No Mortgage Loan has a shared appreciation feature, or
         other contingent interest feature.

                  (xxxii) Each Mortgage Loan contains a customary "due on sale"
         clause.

                  (xxxiii) No more than approximately 3.87% of the Mortgage
         Loans are secured by two- to four-family dwellings. No more than
         approximately 4.51% of the Mortgage Loans are secured by low rise
         condominium units. No more than approximately 0.14% of the Mortgage
         Loans are secured by high rise condominium units. No less than
         approximately 80.84% of the Mortgage Loans are secured by single family
         detached dwellings. No more than approximately 0.56% of the Mortgage
         Loans are secured by manufactured housing. No more than approximately
         10.06% of the Mortgage Loans are secured by PUDs.

                  (xxxiv) No Mortgage Loan had a principal balance in excess of
         $997,709.84 at origination.

                  (xxxv) To the extent required under applicable law, each
         originator and subsequent mortgagee or servicer of the Mortgage Loan
         complied with all licensing requirements and was authorized to transact
         and do business in the jurisdiction in which the related Mortgaged
         Property is located at all times when it held or serviced the Mortgage
         Loan. Any and all requirements of any federal, state or local laws or
         regulations, including,

                                       56
<PAGE>

         without limitation, usury, truth-in-lending, real estate settlement
         procedures, consumer credit protection, anti-predatory lending, fair
         credit reporting, unfair collection practice, equal credit opportunity,
         fair housing and disclosure laws and regulations, applicable to the
         solicitation, origination, collection and servicing of such Mortgage
         Loan have been complied with in all material respects; and any
         obligations of the holder of the Mortgage Note, Mortgage and other loan
         documents have been complied with in all material respects; servicing
         of each Mortgage Loan has been in accordance with prudent mortgage
         servicing standards, any applicable laws, rules and regulations and in
         accordance with the terms of the Mortgage Notes, Mortgage and other
         loan documents, whether such origination and servicing was done by
         Seller, its affiliates, or any third party which originated the
         Mortgage Loan on behalf of, or sold the Mortgage Loan to, any of them,
         or any servicing agent of any of the foregoing;

                  (xxxvi) Each Mortgage Loan was originated on or after March
         20, 2001;

                  (xxxvii) Each Two-Year Hybrid Mortgage Loan had an initial
         Adjustment Date no later than April 1, 2004; each Three-Year Hybrid
         Mortgage Loan had an initial Adjustment Date no later than April 1,
         2004.

                  (xxxviii) [Reserved]

                  (xxxix) Approximately 87.51% of the Mortgage Loans provide for
         a prepayment penalty.

                  (xl) [Reserved]

                  (xli) On the basis of representations made by the Mortgagors
         in their loan applications, no more than approximately 2.89% of the
         Mortgage Loans are secured by investor properties, and no less than
         approximately 97.06% of the owner-occupied Mortgage Loans are secured
         by owner-occupied Mortgaged Properties that are primary residences and
         no more than approximately 0.05% of the owner-occupied Mortgage Loans
         are secured by owner-occupied Mortgaged Properties that are secondary
         residences.

                  (xlii) At the Cut-off Date, the improvements upon each
         Mortgaged Property are covered by a valid and existing hazard insurance
         policy with a generally acceptable carrier that provides for fire and
         extended coverage and coverage for such other hazards as are customary
         in the area where the Mortgaged Property is located in an amount that
         is at least equal to the lesser of (i) the maximum insurable value of
         the improvements securing such Mortgage Loan or (ii) the greater of (a)
         the outstanding principal balance of the Mortgage Loan and (b) an
         amount such that the proceeds of such policy shall be sufficient to
         prevent the Mortgagor and/or the mortgagee from becoming a co-insurer.
         If the Mortgaged Property is a condominium unit, it is included under
         the coverage afforded by a blanket policy for the condominium unit. All
         such individual insurance policies and all flood policies referred to
         in item (xliv) below contain a standard mortgagee clause

                                       57
<PAGE>

         naming the Seller or the original mortgagee, and its successors in
         interest, as mortgagee, and the Seller has received no notice that any
         premiums due and payable thereon have not been paid; the Mortgage
         obligates the Mortgagor thereunder to maintain all such insurance,
         including flood insurance, at the Mortgagor's cost and expense, and
         upon the Mortgagor's failure to do so, authorizes the holder of the
         Mortgage to obtain and maintain such insurance at the Mortgagor's cost
         and expense and to seek reimbursement therefor from the Mortgagor.

                  (xliii) If the Mortgaged Property is in an area identified in
         the Federal Register by the Federal Emergency Management Agency as
         having special flood hazards, a flood insurance policy in a form
         meeting the requirements of the current guidelines of the Flood
         Insurance Administration is in effect with respect to such Mortgaged
         Property with a generally acceptable carrier in an amount representing
         coverage not less than the least of (A) the original outstanding
         principal balance of the Mortgage Loan, (B) the minimum amount required
         to compensate for damage or loss on a replacement cost basis, or (C)
         the maximum amount of insurance that is available under the Flood
         Disaster Protection Act of 1973, as amended.

                  (xliv) To the best of the Seller's knowledge, there is no
         proceeding occurring, pending or threatened for the total or partial
         condemnation of the Mortgaged Property.

                  (xlv) There is no material monetary default existing under any
         Mortgage or the related Mortgage Note and, to the best of the Seller's
         knowledge, there is no material event that, with the passage of time or
         with notice and the expiration of any grace or cure period, would
         constitute a default, breach, violation or event of acceleration under
         the Mortgage or the related Mortgage Note; and the Seller has not
         waived any default, breach, violation or event of acceleration.

                  (xlvi) Each Mortgaged Property is improved by a one- to
         four-family residential dwelling, including condominium units and
         dwelling units in PUDs. To the best of the Seller's knowledge, no
         Mortgaged Property includes a cooperative or a mobile home or
         constitutes other than real property under state law.

                  (xlvii) Each Mortgage Loan is being serviced by the Master
         Servicer, or, if a Mortgage Loan is being serviced by the originator of
         such Mortgage Loan, the Master Servicer and the originator have agreed
         to transfer the servicing of such Mortgage Loan on or prior to March 1,
         2003.

                  (xlviii) Any future advances made prior to the Cut-off Date
         have been consolidated with the outstanding principal amount secured by
         the Mortgage, and the secured principal amount, as consolidated, bears
         a single interest rate and single repayment term reflected on the
         Mortgage Loan Schedule. The consolidated principal amount does not
         exceed the original principal amount of the Mortgage Loan. The Mortgage
         Note does not permit or obligate the Master Servicer to make future
         advances to the Mortgagor at the option of the Mortgagor.

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<PAGE>

                  (xlix) All taxes, governmental assessments, insurance
         premiums, water, sewer and municipal charges, leasehold payments or
         ground rents that previously became due and owing have been paid, or an
         escrow of funds has been established in an amount sufficient to pay for
         every such item that remains unpaid and that has been assessed, but is
         not yet due and payable. Except for (A) payments in the nature of
         escrow payments, and (B) interest accruing from the date of the
         Mortgage Note or date of disbursement of the Mortgage proceeds,
         whichever is later, to the day that precedes by one month the Due Date
         of the first installment of principal and interest, including without
         limitation, taxes and insurance payments, the Master Servicer has not
         advanced funds, or induced, solicited or knowingly received any advance
         of funds by a party other than the Mortgagor, directly or indirectly,
         for the payment of any amount required by the Mortgage.

                  (l) The Mortgage Loans were underwritten in all material
         respects in accordance with customary and prudent underwriting
         guidelines generally used by originators of credit blemished quality
         mortgage loans.

                  (li) Prior to the approval of the Mortgage Loan application,
         an appraisal of the related Mortgaged Property was obtained from a
         qualified appraiser, duly appointed by the originator, who had no
         interest, direct or indirect, in the Mortgaged Property or in any loan
         made on the security thereof, and whose compensation is not affected by
         the approval or disapproval of the Mortgage Loan; such appraisal is in
         a form acceptable to Fannie Mae and Freddie Mac.

                  (lii) None of the Mortgage Loans is a graduated payment
         mortgage loan or a growing equity mortgage loan, and no Mortgage Loan
         is subject to a buydown or similar arrangement.

                  (liii) The Mortgage Rates borne by the Mortgage Loans as of
         the Cut-off Date ranged from 4.890% per annum to 12.990% per annum and
         the weighted average Mortgage Rate as of the Cut-off Date was 7.790%
         per annum.

                  (liv) [Reserved]

                  (lv) The Mortgage Loans were selected from among the
         outstanding one- to four-family mortgage loans in the Seller's
         portfolio at the Closing Date, as to which the representations and
         warranties made as to the Mortgage Loans set forth in this Section
         2.03(b) can be made. No selection was made in a manner that would
         adversely affect the interests of Certificateholders.

                  (lvi) The Gross Margins on the Adjustable Rate Mortgage Loans
         that are Mortgage Loans range from approximately 1.837% to 13.740% and
         the weighted average Gross Margin was approximately 6.866%.

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<PAGE>

                  (lvii) Each Mortgage Loan has a payment date on or before the
         Due Date in the month of the first Distribution Date.

                  (lviii) The Mortgage Loans, individually and in the aggregate,
         conform in all material respects to the descriptions thereof in the
         Prospectus Supplement.

                  (lix) [Reserved]

                  (lx) There is no obligation on the part of the Seller under
         the terms of the Mortgage or related Mortgage Note to make payments in
         addition to those made by the Mortgagor.

                  (lxi) Any leasehold estate securing a Mortgage Loan has a term
         of not less than five years in excess of the term of the related
         Mortgage Loan.

                  (lxii) [Reserved]

                  (lxiii) Each Mortgage Loan represents a "qualified mortgage"
         within the meaning of Section 860(a)(3) of the Code (but without regard
         to the rule in Treasury Regulation ss. 1.860G-2(f)(2) that treats a
         defective obligation as a qualified mortgage, or any substantially
         similar successor provision) and applicable Treasury regulations
         promulgated thereunder.

                  (lxiv) No Mortgage Loan was either a "consumer credit
         contract" or a "purchase money loan" as such terms are defined in 16
         C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined in
         15 U.S.C. ss. 1602(aa).

                  (lxv) Each Mortgage Loan was (A) originated no earlier than
         six months prior to the time the Seller purchased such Mortgage Loan
         pursuant to a mortgage loan purchase agreement or other similar
         agreement and (B) underwritten or reunderwritten by the Seller in
         accordance with the Seller's underwriting guidelines for credit
         blemished loans in effect at the time the loan was underwritten or
         reunderwritten, as applicable.

                  (lxvi) No Mortgage Loan was either a "consumer credit
         contract" or a "purchase money loan" as such terms are defined in 16
         C.F.R. Section 433 nor is any Mortgage Loan a "mortgage" as defined in
         15 U.S.C. ss. 1602(aa).

                  (lxvii) Each Mortgage Loan was originated in compliance with
         the following anti-predatory lending guidelines:

                  (i) No borrower was encouraged or required to select a
Mortgage Loan product offered by the Mortgage Loan's originator which is a
higher cost product designed for less creditworthy borrowers, unless at the time
of the Mortgage Loan's origination, such borrower did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. If, at the time of loan application, the borrower may have
qualified

                                       60
<PAGE>

for a for a lower-cost credit product then offered by any mortgage lending
affiliate of the Mortgage Loan's originator, the Mortgage Loan's originator
referred the borrower's application to such affiliate for underwriting
consideration;

                  (ii) The methodology used in underwriting the extension of
credit for the each Mortgage Loan employs objective mathematical principles
which relate the borrower's income, assets and liabilities to the proposed
payment and such underwriting methodology does not rely on the extent of the
borrower's equity in the collateral as the principle determining factor in
approving such credit extension. Such underwriting methodology confirmed that at
the time of origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Mortgage Loan;

                  (iii) With respect to any Mortgage Loan that contains a
provision permitting imposition of a premium upon a prepayment prior to
maturity: (i) prior to the loan's origination, the borrower agreed to such
premium in exchange for a monetary benefit, including but not limited to a rate
or fee reduction, (ii) prior to the loan's origination, the borrower was offered
the choice of another mortgage product that did not require payment of such a
premium, (iii) the prepayment premium is disclosed to the borrower in the loan
documents pursuant to applicable state and federal law, and (iv) notwithstanding
any state or federal law to the contrary, Servicer shall not impose such
prepayment premium in any instance when the mortgage debt is accelerated as the
result of the borrower's default in making the loan payments;

                  (iv) No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;

                  (v) No Mortgage Loan is subject to the Home Ownership and
Equity Protection Act of 1994 (15 USC ss. 1602(aa)), Regulation Z (12 CFR
226.32) or any similar state law or regulation including those relating to "high
cost mortgages" and "high LTV mortgages";

                  (vi) All points and fees related to each Mortgage Loan were
disclosed in writing to the borrower in accordance with applicable state and
federal law. Except in the case of a Mortgage Loan in an original principal
amount of less than $60,000 which would have resulted in an unprofitable
origination, no borrower was charged "points and fees" (whether or not financed)
in an amount greater than 5% of the principal amount of such loan, such 5%
limitation calculated in accordance with the Lender Letter;

                  (vii) All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan has been disclosed in
writing to the borrower in accordance with applicable state and federal law and
regulation; and

                  (lxviii) If the Mortgage Loan provides that the interest rate
         on the principal balance of the related Mortgage Loan may be adjusted,
         all of the terms of the related Mortgage

                                       61
<PAGE>

         pertaining to interest rate adjustments, payment adjustments and
         adjustments of the outstanding principal balance have been made in
         accordance with the terms of the related Mortgage Note and applicable
         law and are enforceable and such adjustments will not affect the
         priority of the Mortgage lien;

                  (lxix) The Mortgaged Property complies with all applicable
         laws, rules and regulations relating to environmental matters,
         including but not limited to those relating to radon, asbestos and lead
         paint and neither the Seller nor, to the Seller's knowledge, the
         Mortgagor, has received any notice of any violation or potential
         violation of such law;

                  (lxx) There is no action, suit or proceeding pending, or to
         the best of Seller's knowledge, threatened or likely to be asserted
         with respect to the Mortgage Loan against or affecting Seller before or
         by any court, administrative agency, arbitrator or governmental body;

                  (lxxi) No action, inaction, or event has occurred and no state
         of fact exists or has existed that has resulted or will result in the
         exclusion from, denial of, or defense to coverage under any applicable
         hazard insurance policy, irrespective of the cause of such failure of
         coverage. In connection with the placement of any such insurance, no
         commission, fee, or other compensation has been or will be received by
         Seller or any designee of Seller or any corporation in which Seller or
         any officer, director, or employee had a financial interest at the time
         of placement of such insurance;

                  (lxxii) Each Mortgage Loan has a fully assignable life of loan
         tax service contract which may be assigned without the payment of any
         fee;

                  (lxxiii) No Mortgagor has notified the Seller, and the Seller
         has no knowledge, of any relief requested or allowed to a Mortgagor
         under the Relief Act;

                  (lxxiv) No Mortgage Loan is subject to the City of Oakland
         Anti-Predatory Lending Ordinance (i.e. the Oakland Residential Lending
         Ordinance No. 12361 C.M.S., the amendment No. 12362 C.M.S. to Oakland's
         Linked Banking Services Ordinance and Resolution 01-62 of the Oakland
         Redevelopment Agency, collectively the "Oakland Ordinance") except as
         identified on the Mortgage Loan Schedule. Any Mortgage Loan subject to
         the Oakland Ordinance is in compliance with the provisions of the
         Oakland Ordinance;

                  (lxxv) No predatory or deceptive lending practices, including
         but not limited to, the extension of credit to the Mortgagor without
         regard for the Mortgagor's ability to repay the Mortgage Loan and the
         extension of credit to the Mortgagor which has no apparent benefit to
         the Mortgagor, were employed by the originator of the Mortgage Loan in
         connection with the origination of the Mortgage Loan; and

                  (lxxvi) The information set forth in the Prepayment Charge
         Schedule with respect to each Mortgage Loanis complete, true and
         correct in all material respects at the date or

                                       62
<PAGE>

         dates respecting which such information is furnished and each
         Prepayment Charge is permissible and enforceable in accordance with its
         terms under applicable law upon the Mortgagor's full and voluntary
         principal prepayment (except to the extent that: (1) the enforceability
         thereof may be limited by bankruptcy, insolvency, moratorium,
         receivership and other similar laws relating to creditors' rights
         generally; or (2) the collectibility thereof may be limited due to
         acceleration in connection with a foreclosure or other involuntary
         prepayment).

In addition to the foregoing repsentations and warranties, the Seller hereby
represents and warrants to the Depositor, the Master Servicer and the Trustee
that as of the Closing Date, each Mortgage Loan is in compliance with applicable
federal and state laws and regulations.

                  (c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 2.03(a) or (b), that
materially and adversely affects the interests of the Certificateholders in any
Mortgage Loan, the party discovering such breach shall give prompt notice
thereof to the other parties. Each of the Master Servicer and the Seller (each,
a "Representing Party") hereby covenants with respect to a breach of the
representations and warranties set forth in Sections 2.03(a) and (b), that
within 90 days of the earlier of the discovery by such Representing Party or
receipt of written notice by such Representing Party from any party of a breach
of any representation or warranty set forth herein made that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
it shall cure such breach in all material respects and, if such breach is not so
cured, shall, (i) if such 90-day period expires prior to the second anniversary
of the Closing Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from
the Trust Fund and substitute in its place a Replacement Mortgage Loan, in the
manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the
Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of the Opinion of Counsel
required by Section 2.05 hereof and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Trustee of a
Request for Release substantially in the form of Exhibit M. Any Representing
Party liable for a breach under this Section 2.03 shall promptly reimburse the
Master Servicer and the Trustee for any expenses reasonably incurred by the
Master Servicer or the Trustee in respect of enforcing the remedies for such
breach. To enable the Master Servicer to amend the Mortgage Loan Schedule, any
Representing Party liable for a breach under this Section 2.03 shall, unless it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether such Representing Party intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties described in this Section
that are made to the best of the Representing Party's knowledge, if it is
discovered by any of the Depositor, the Master Servicer, the Seller or the
Trustee that the substance of such representation and warranty is inaccurate and
such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, notwithstanding the Representing Party's lack of knowledge with
respect to the substance of such representation or warranty, such inaccuracy
shall be deemed a breach of the applicable representation or warranty.

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                  With respect to any Replacement Mortgage Loan or Loans, the
Seller delivering such Replacement Mortgage Loan shall deliver to the Trustee
for the benefit of the Certificateholders the related Mortgage Note, Mortgage
and assignment of the Mortgage, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as required by Section 2.01. No substitution will be made in any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to the
Distribution Date on which such proceeds are to be distributed shall not be part
of the Trust Fund and will be retained by the Seller delivering such Replacement
Loan on such Distribution Date. For the month of substitution, distributions to
Certificateholders will include the Scheduled Payment due on any Deleted
Mortgage Loan for the related Due Period and thereafter the Seller shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject to
the terms of this Agreement in all respects, and the Seller delivering such
Replacement Mortgage Loan shall be deemed to have made with respect to such
Replacement Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Section 2.03(b) with respect to such
Mortgage Loan. Upon any such substitution and the deposit to the Certificate
Account of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Co-Trustee shall
release to the Representing Party the Mortgage File relating to such Deleted
Mortgage Loan and held for the benefit of the Certificateholders and shall
execute and deliver at the Master Servicer's direction such instruments of
transfer or assignment as have been prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the Seller, or its
respective designee, title to the Trustee's interest in any Deleted Mortgage
Loan substituted for pursuant to this Section 2.03.

                  For any month in which the Seller substitutes one or more
Replacement Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Replacement Mortgage Loans as of the date of substitution is
less than the Stated Principal Balance (after application of the principal
portion of the Scheduled Payment due (in the case of Actuarial Mortgage Loans)
in the month of substitution) of all such Deleted Mortgage Loans. An amount
equal to the aggregate of the deficiencies described in the preceding sentence
(such amount, the "Substitution Adjustment Amount") shall be forwarded by the
Seller to the Master Servicer and deposited by the Master Servicer into the
Certificate Account not later than the Determination Date for the Distribution
Date relating to the Prepayment Period during which the related Mortgage Loan
became required to be purchased or replaced hereunder.

                  In the event that a Seller shall have repurchased a Mortgage
Loan, the Purchase Price therefor shall be deposited in the Certificate Account
pursuant to Section 3.08 on the Determination Date for the Distribution Date in
the month following the month during which such Seller became obligated to
repurchase or replace such Mortgage Loan and upon such

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<PAGE>

deposit of the Purchase Price, the delivery of the Opinion of Counsel required
by Section 2.05, if any, and the receipt of a Request for Release in the form of
Exhibit N hereto, the Co-Trustee shall release the related Mortgage File held
for the benefit of the Certificateholders to such Seller, and the Trustee shall
execute and deliver at such Person's direction the related instruments of
transfer or assignment prepared by such Seller, in each case without recourse,
as shall be necessary to transfer title from the Trustee for the benefit of the
Certificateholders and transfer the Trustee's interest to such Seller to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Seller to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
breach available to Certificateholders, the Depositor or the Trustee.

                  (d) The representations and warranties set forth in Section
2.03 hereof shall survive delivery of the respective Mortgage Files to the
Co-Trustee for the benefit of the Certificateholders.

                  Section 2.04. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.

                  The Depositor hereby represents and warrants to the Seller,
the Master Servicer and the Trustee as follows, as of the date hereof:

                  (i) The Depositor is duly organized and is validly existing as
         a corporation in good standing under the laws of the State of Delaware
         and has full power and authority (corporate and other) necessary to own
         or hold its properties and to conduct its business as now conducted by
         it and to enter into and perform its obligations under this Agreement.

                  (ii) The Depositor has the full corporate power and authority
         to execute, deliver and perform, and to enter into and consummate the
         transactions contemplated by, this Agreement and has duly authorized,
         by all necessary corporate action on its part, the execution, delivery
         and performance of this Agreement; and this Agreement, assuming the due
         authorization, execution and delivery hereof by the other parties
         hereto, constitutes a legal, valid and binding obligation of the
         Depositor, enforceable against the Depositor in accordance with its
         terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
         reorganization, moratorium and other similar laws affecting creditors'
         rights generally and (ii) general principles of equity, regardless of
         whether enforcement is sought in a proceeding in equity or at law.

                  (iii) The execution and delivery of this Agreement by the
         Depositor, the consummation of the transactions contemplated by this
         Agreement, and the fulfillment of or compliance with the terms hereof
         and thereof are in the ordinary course of business of the Depositor and
         will not (A) result in a material breach of any term or provision of
         the charter or by-laws of the Depositor or (B) materially conflict
         with, result in a material breach, violation or acceleration of, or
         result in a material default under, the terms of any other material
         agreement or instrument to which the Depositor is a party or by which
         it

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<PAGE>

         may be bound or (C) constitute a material violation of any statute,
         order or regulation applicable to the Depositor of any court,
         regulatory body, administrative agency or governmental body having
         jurisdiction over the Depositor; and the Depositor is not in breach or
         violation of any material indenture or other material agreement or
         instrument, or in violation of any statute, order or regulation of any
         court, regulatory body, administrative agency or governmental body
         having jurisdiction over it which breach or violation may materially
         impair the Depositor's ability to perform or meet any of its
         obligations under this Agreement.

                  (iv) No litigation is pending, or, to the best of the
         Depositor's knowledge, threatened, against the Depositor that would
         materially and adversely affect the execution, delivery or
         enforceability of this Agreement or the ability of the Depositor to
         perform its obligations under this Agreement in accordance with the
         terms hereof and thereof.

                  (v) No consent, approval, authorization or order of any court
         or governmental agency or body is required for the execution, delivery
         and performance by the Depositor of, or compliance by the Depositor
         with, this Agreement or the consummation of the transactions
         contemplated hereby, or if any such consent, approval, authorization or
         order is required, the Depositor has obtained the same.

                  The Depositor hereby represents and warrants to the Trustee
with respect to each Mortgage Loan as of the Closing Date, that following the
transfer of the Mortgage Loans to it by the Seller, the Depositor had good title
to the Mortgage Loans, and the related Mortgage Notes were subject to no
offsets, claims, defenses or counterclaims.

                  It is understood and agreed that the representations and
warranties set forth in the two immediately preceding paragraphs shall survive
delivery of the Mortgage Files to the Co-Trustee. Upon discovery by the
Depositor or the Trustee of a breach of any of the foregoing representations and
warranties set forth in the immediately preceding paragraph (referred to herein
as a "breach"), which breach materially and adversely affects the interest of
the Certificateholders, the party discovering such breach shall give prompt
written notice to the others and to each Rating Agency. The Depositor hereby
covenants with respect to the representations and warranties made by it in this
Section 2.04 that within 90 days of the earlier of the discovery it or receipt
of written notice by it from any party of a breach of any representation or
warranty set forth herein made that materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, it shall cure such
breach in all material respects and, if such breach is not so cured, shall
repurchase or replace the affected Mortgage Loan or Loans in accordance with the
procedure set forth in Section 2.03(c).

                  Section 2.05. DELIVERY OF OPINION OF COUNSEL IN CONNECTION
                                WITH SUBSTITUTIONS AND REPURCHASES.

                  (a) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan that is not in default or as to which default
is not imminent, no repurchase or substitution pursuant to Sections 2.02, 2.03
or 2.04 shall be made unless the Representing Party making such repurchase or

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substitution delivers to the Trustee an Opinion of Counsel, addressed to the
Trustee, to the effect that such repurchase or substitution would not (i) result
in the imposition of the tax on "prohibited transactions" of the Trust Fund or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause the Trust Fund to fail to
qualify as a REMIC at any time that any Certificates are outstanding. Any
Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02, 2.03 or 2.04) upon the earlier of (a)
the occurrence of a default or imminent default with respect to such loan and
(b) receipt by the Trustee of an Opinion of Counsel to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.

(b) Upon discovery by the Depositor, the Seller, the Master Servicer or the
Trustee that any Mortgage Loan does not constitute a "qualified mortgage" within
the meaning of section 860G(a)(3) of the Code, the party discovering such fact
shall promptly (and in any event within 5 Business Days of discovery) give
written notice thereof to the other parties. In connection therewith, the
Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(b) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.

                  Section 2.06. AUTHENTICATION AND DELIVERY OF CERTIFICATES.

                  The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has
executed, authenticated and delivered, to or upon the order of the Depositor,
the Certificates in authorized denominations evidencing the entire ownership of
the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the
rights referred to above for the benefit of all present and future Holders of
the Certificates and to perform the duties set forth in this Agreement to the
best of its ability, to the end that the interests of the Holders of the
Certificates may be adequately and effectively protected.

                  Section 2.07. COVENANTS OF THE MASTER SERVICER.

                  The Master Servicer hereby covenants to the Depositor, the
Seller and the Trustee as follows:

                  (a) the Master Servicer shall comply in the performance of its
         obligations under this Agreement with all reasonable rules and
         requirements of the insurer under each Required Insurance Policy; and

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<PAGE>

                  (b) no written information, certificate of an officer,
         statement furnished in writing or written report delivered to the
         Depositor, any affiliate of the Depositor or the Trustee and prepared
         by the Master Servicer pursuant to this Agreement will contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the information, certificate, statement or report not
         misleading.

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                                  ARTICLE III.

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

                  Section 3.01. MASTER SERVICER TO SERVICE MORTGAGE LOANS.

                  For and on behalf of the Certificateholders, the Master
Servicer shall service and administer the Mortgage Loans in accordance with
customary and usual standards of practice of prudent mortgage loan lenders in
the respective states in which the Mortgaged Properties are located. In
connection with such servicing and administration, the Master Servicer shall
have full power and authority, acting alone and/or through subservicers as
provided in Section 3.02 hereof, subject to the terms hereof (i) to execute and
deliver, on behalf of the Certificateholders and the Trustee, customary consents
or waivers and other instruments and documents, (ii) to consent to transfers of
any Mortgaged Property and assumptions of the Mortgage Notes and related
Mortgages (but only in the manner provided in this Agreement), (iii) to collect
any Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to
Section 3.12(a), to effectuate foreclosure or other conversion of the ownership
of the Mortgaged Property securing any Mortgage Loan; provided that the Master
Servicer shall take no action that is inconsistent with or prejudices the
interests of the Trust Fund or the Certificateholders in any Mortgage Loan or
the rights and interests of the Depositor and the Trustee under this Agreement.
The Master Servicer shall represent and protect the interest of the Trust Fund
in the same manner as it currently protects its own interest in mortgage loans
in its own portfolio in any claim, proceeding or litigation regarding a Mortgage
Loan and shall not make or permit any modification, waiver or amendment of any
term of any Mortgage Loan which would cause the Trust Fund to fail to qualify as
a REMIC or result in the imposition of any tax under Section 860(a) or 860(d) of
the Code, but in any case not in any manner that is a lesser standard than that
provided in the first sentence of this Section 3.01. Without limiting the
generality of the foregoing, the Master Servicer, in its own name or in the name
of the Depositor and the Trustee, is hereby authorized and empowered by the
Depositor and the Trustee, when the Master Servicer believes it appropriate in
its reasonable judgment, to execute and deliver, on behalf of the Trustee, the
Depositor, the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and all
other comparable instruments, with respect to the Mortgage Loans, and with
respect to the Mortgaged Properties held for the benefit of the
Certificateholders. The Master Servicer shall prepare and deliver to the
Depositor and/or the Trustee such documents requiring execution and delivery by
any or all of them as are necessary or appropriate to enable the Master Servicer
to service and administer the Mortgage Loans. Upon receipt of such documents,
the Depositor and/or the Trustee shall execute such documents and deliver them
to the Master Servicer. The Master Servicer further is authorized and empowered
by the Trustee, on behalf of the Certificateholders and the Trustee, in its own
name or in the name of the Subservicer, when the Master Servicer or the
Subservicer, as the case may be, believes it appropriate in its best judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with

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<PAGE>

respect to such assignment or re-recording of a Mortgage in the name of MERS,
solely as nominee for the Trustee and its successors and assigns.

                  In accordance with the standards of the preceding paragraph,
the Master Servicer shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any, in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Certificateholders, be added to the
Stated Principal Balance under the related Mortgage Loans, notwithstanding that
the terms of such Mortgage Loans so permit.

                  The Master Servicer shall deliver a list of Servicing Officers
to the Trustee by the Closing Date.

                  In addition, the Master Servicer shall administer the Mortgage
Insurance Policy on behalf of itself, the Seller, the Depositor, and the Trustee
for the benefit of the Certificateholders, when it is necessary to make claims
and receive payments under the Mortgage Insurance Policy. In connection with its
activities as Master Servicer of the Mortgage Loans, the Master Servicer agrees
to present, on behalf of itself, the Trustee and the Certificateholders, claims
to the insurer under any primary insurance policies and, in this regard, to take
any reasonable action necessary to permit recovery under any primary insurance
policies respecting defaulted Mortgage Loans. Any amounts collected by the
Master Servicer under any primary insurance policies shall be deposited in the
Certificate Account.

                  Section 3.02. SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF
                                MASTER SERVICER.

                  (a) The Master Servicer may arrange for the subservicing of
any Mortgage Loan by a subservicer (each, a "Subservicer") pursuant to a
subservicing agreement (each, a "Subservicing Agreement"); provided that such
subservicing arrangement and the terms of the related subservicing agreement
must provide for the servicing of such Mortgage Loans in a manner consistent
with the servicing arrangements contemplated hereunder. Notwithstanding the
provisions of any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a subservicer or reference to actions taken through a Master Servicer or
otherwise, the Master Servicer shall remain obligated and liable to the
Depositor, the Trustee and the Certificateholders for the servicing and
administration of the Mortgage Loans in accordance with the provisions of this
Agreement without diminution of such obligation or liability by virtue of such
subservicing agreements or arrangements or by virtue of indemnification from the
subservicer and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
Every subservicing agreement entered into by the Master Servicer shall contain a
provision giving the successor Master Servicer the option to terminate such
agreement in the event a successor Master Servicer is appointed. All actions of
each subservicer performed

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<PAGE>

pursuant to the related subservicing agreement shall be performed as an agent of
the Master Servicer with the same force and effect as if performed directly by
the Master Servicer.

                  (b) For purposes of this Agreement, the Master Servicer shall
be deemed to have received any collections, recoveries or payments with respect
to the Mortgage Loans that are received by a subservicer regardless of whether
such payments are remitted by the subservicer to the Master Servicer.

                  Section 3.03. RIGHTS OF THE DEPOSITOR, THE SELLER AND THE
                                TRUSTEE IN RESPECT OF THE MASTER SERVICER.

                  None of the Trustee, the Seller or the Depositor shall have
any responsibility or liability for any action or failure to act by the Master
Servicer, and none of them is obligated to supervise the performance of the
Master Servicer hereunder or otherwise.

                  Section 3.04. TRUSTEE TO ACT AS MASTER SERVICER.

                  In the event that the Master Servicer shall for any reason no
longer be the Master Servicer hereunder (including by reason of an Event of
Default), the Trustee or its designee shall thereupon assume all of the rights
and obligations of the Master Servicer hereunder arising thereafter (except that
the Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to Section 3.10 hereof or any acts or omissions of the predecessor Master
Servicer hereunder, (ii) obligated to make Advances if it is prohibited from
doing so by applicable law, (iii) obligated to effectuate repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03 or the first paragraph of Section
6.02 hereof). If the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Event of Default), the Trustee (or
any other successor servicer) may, at its option, succeed to any rights and
obligations of the Master Servicer under any subservicing agreement in
accordance with the terms thereof; provided that the Trustee (or any other
successor servicer) shall not incur any liability or have any obligations in its
capacity as servicer under a subservicing agreement arising prior to the date of
such succession unless it expressly elects to succeed to the rights and
obligations of the Master Servicer thereunder; and the Master Servicer shall not
thereby be relieved of any liability or obligations under the subservicing
agreement arising prior to the date of such succession.

                  The Master Servicer shall, upon request of the Trustee, but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each subservicing agreement and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

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<PAGE>

                  Section 3.05. COLLECTION OF MORTGAGE LOAN PAYMENTS;
                                CERTIFICATE ACCOUNT; DISTRIBUTION ACCOUNT;
                                SELLER SHORTFALL INTEREST REQUIREMENT.

                  (a) The Master Servicer shall make reasonable efforts in
accordance with customary and usual standards of practice of prudent mortgage
lenders in the respective states in which the Mortgaged Properties are located
to collect all payments called for under the terms and provisions of the
Mortgage Loans to the extent such procedures shall be consistent with this
Agreement and the terms and provisions of any related Required Insurance Policy.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or any Prepayment Charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the due dates
for payments due on a Mortgage Note for a period not greater than 270 days. In
the event of any such arrangement, the Master Servicer shall make Advances on
the related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.

                  (b) The Master Servicer shall establish and maintain a
Certificate Account into which the Master Servicer shall deposit or cause to be
deposited on a daily basis within two Business Days of receipt, except as
otherwise specifically provided herein, the following payments and collections
remitted by Subservicers or received by it in respect of Mortgage Loans
subsequent to the Cut-off Date (other than in respect of principal and interest
due on the Mortgage Loans before the Cut-off Date) and the following amounts
required to be deposited hereunder:

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

                  (ii) all payments on account of interest on the Mortgage Loans
         net of the related Servicing Fee permitted under Section 3.15, other
         than interest accrued on the Mortgage Loans prior to the Cut-off Date,
         and the Certificate Account Deposit;

                  (iii) all Insurance Proceeds and Liquidation Proceeds, other
         than proceeds to be applied to the restoration or repair of the
         Mortgaged Property or released to the Mortgagor in accordance with the
         Master Servicer's normal servicing procedures;

                  (iv) all Compensating Interest;

                  (v) any amount required to be deposited by the Master Servicer
         pursuant to Section 3.05(f) in connection with any losses on Permitted
         Investments;

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<PAGE>

                  (vi) any amounts required to be deposited by the Master
         Servicer pursuant to Section 3.10 hereof;

                  (vii) the Purchase Price and any Substitution Adjustment
         Amount;

                  (viii) all Advances made by the Master Servicer pursuant to
         Section 4.01;

                  (ix) the Seller Shortfall Interest Requirement;

                  (x) all Prepayment Charges collected; and

                  (xi) any other amounts required to be deposited hereunder.

                  The foregoing requirements for remittance by the Master
Servicer into the Certificate Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of prepayment penalties, late payment charges or assumption fees, if
collected, need not be remitted by the Master Servicer. In the event that the
Master Servicer shall remit any amount not required to be remitted and not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at any
time withdraw or direct the institution maintaining the Certificate Account, to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such withdrawal or direction may be accomplished by
delivering written notice thereof to the institution maintaining the Certificate
Account, that describes the amounts deposited in error in the Certificate
Account. The Master Servicer shall maintain adequate records with respect to all
withdrawals made pursuant to this Section. All funds deposited in the
Certificate Account shall be held in trust for the Certificateholders until
withdrawn in accordance with Section 3.08.

                  (c) The Trustee shall establish and maintain, on behalf of the
Certificateholders, the Distribution Account. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:

                  (i) the aggregate amount remitted by the Master Servicer
         pursuant to the second paragraph of Section 3.08(a);

                  (ii) [Reserved];

                  (iii) any amount required to be deposited by the Master
         Servicer pursuant to Section 3.05(f) in connection with any losses on
         Permitted Investments;

                  (iv) [Reserved];

                  (v) [Reserved]; and

                  (vi) any amounts received under the Cap Contract, including
         amounts, if any, received by the Master Servicer as provided in Section
         3.19.

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<PAGE>

                  The foregoing requirements for remittance by the Master
Servicer and deposit by the Trustee into the Distribution Account shall be
exclusive. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time direct the Trustee to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering a written
notice to the Trustee that describes the amounts deposited in error in the
Distribution Account. All funds deposited in the Distribution Account shall be
held by the Trustee in trust for the Certificateholders until disbursed in
accordance with this Agreement or withdrawn in accordance with Section 3.08. In
no event shall the Trustee incur liability for withdrawals from the Distribution
Account at the direction of the Master Servicer.

                  (d) No later than 1:00 p.m. Pacific time on the Business Day
prior to the Master Servicer Advance Date in February 2003, the Seller shall
remit to the Master Servicer, and the Master Servicer shall deposit in the
Certificate Account, the Seller Shortfall Interest Requirement (if any) for such
Master Servicer Advance Date.

                  (e) The Trustee shall establish and maintain, on behalf of the
Certificateholders, a Principal Reserve Fund in the name of the Trustee. On the
Closing Date, the Seller shall deposit into the Principal Reserve Fund an amount
equal to $230.52. The Principal Reserve Fund shall be treated as an "outside
reserve fund" under applicable Treasury regulations and shall not be part of the
REMIC. Any investment earnings on the Principal Reserve Fund shall be treated as
owned by the Seller and will be taxable to the Seller. On the Business Day
before the Distribution Date occurring in February 2003, the Trustee shall
transfer from the Principal Reserve Fund to the Distribution Account the funds
on deposit in the Principal Reserve Fund (net of any investment earnings on
deposit in the Principal Reserve Fund, which shall be transferred to the Seller)
and shall distribute such amount to the Certificates on the Distribution Date
pursuant to Section 4.04(d). The Trustee shall then terminate the Principal
Reserve Fund.

                  (f) Each institution that maintains the Certificate Account,
the Distribution Account or the Principal Reserve Fund shall invest the funds in
each such account, as directed by the Master Servicer, in Permitted Investments,
which shall mature not later than (x) in the case of the Certificate Account,
the second Business Day next preceding the related Distribution Account Deposit
Date (except that if such Permitted Investment is an obligation of the
institution that maintains such Certificate Account, then such Permitted
Investment shall mature not later than the Business Day next preceding such
Distribution Account Deposit Date) and (y) in the case of the Distribution
Account and the Principal Reserve Fund, the Business Day immediately preceding
the first Distribution Date that follows the date of such investment (except
that if such Permitted Investment is an obligation of the institution that
maintains such Distribution Account or Principal Reserve Fund, then such
Permitted Investment shall mature not later than such Distribution Date), in
each case, shall not be sold or disposed of prior to its maturity. All such
Permitted Investments shall be made in the name of the Trustee, for the benefit
of the Certificateholders. In the case of (i) the Certificate Account and the
Distribution Account, all income and gain net of any losses realized from any
such investment shall be for the benefit of the Master Servicer as servicing
compensation and shall be remitted to it monthly as provided

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<PAGE>

herein, and (ii) the Principal Reserve Fund, all income and gain net of any
losses realized from any such investment shall be for the benefit of the Seller
and shall be remitted to the Seller as provided herein. The amount of any losses
incurred in the Certificate Account or the Distribution Account in respect of
any such investments shall be deposited by the Master Servicer in the
Certificate Account or paid to the Trustee for deposit into the Distribution
Account out of the Master Servicer's own funds immediately as realized. The
amount of any losses incurred in the Principal Reserve Fund in respect of any
such investments shall be paid by the Seller to the Trustee for deposit into the
Principal Reserve Fund out of the Seller's own funds immediately as realized.
Any losses incurred in the Carryover Reserve Fund in respect of any such
investments shall be charged against amounts on deposit in the Carryover Reserve
Fund (or such investments) immediately as realized. The Trustee shall not be
liable for the amount of any loss incurred in respect of any investment or lack
of investment of funds held in the Certificate Account, the Distribution
Account, the Carryover Reserve Fund or the Principal Reserve Fund and made in
accordance with this Section 3.05 (or in the case of the Carryover Reserve Fund,
Section 4.08).

                  (g) The Master Servicer shall give at least 30 days advance
notice to the Trustee, the Seller, each Rating Agency and the Depositor of any
proposed change of location of the Certificate Account prior to any change
thereof. The Trustee shall give at least 30 days advance notice to the Master
Servicer, the Seller, each Rating Agency and the Depositor of any proposed
change of the location of the Distribution Account, the Carryover Reserve Fund
or Principal Reserve Fund prior to any change thereof.

                  Section 3.06. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR
                                ITEMS; ESCROW ACCOUNTS.

                  To the extent required by the related Mortgage Note, the
Master Servicer shall establish and maintain one or more accounts (each, an
"Escrow Account") and deposit and retain therein all collections from the
Mortgagors (or advances by the Master Servicer) for the payment of taxes,
assessments, hazard insurance premiums or comparable items for the account of
the Mortgagors. Nothing herein shall require the Master Servicer to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.

                  Withdrawals of amounts so collected from the Escrow Accounts
may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, condominium or PUD association dues, or comparable items, to
reimburse the Master Servicer out of related collections for any payments made
pursuant to Sections 3.01 hereof (with respect to taxes and assessments and
insurance premiums) and 3.10 hereof (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required by law or the terms of the related Mortgage or Mortgage
Note, to Mortgagors on balances in the Escrow Account or to clear and terminate
the Escrow Account at the termination of this Agreement in accordance with
Section 9.01 hereof. The Escrow Accounts shall not be a part of the Trust Fund.

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                  Section 3.07. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
                                REGARDING THE MORTGAGE LOANS.

                  The Master Servicer shall afford the Depositor and the Trustee
reasonable access to all records and documentation regarding the Mortgage Loans
and all accounts, insurance policies and other matters relating to this
Agreement, such access being afforded without charge, but only upon reasonable
request and during normal business hours at the offices of the Master Servicer
designated by it.

                  Upon reasonable advance notice in writing if required by
federal regulation, the Master Servicer will provide to each Certificateholder
that is a savings and loan association, bank or insurance company certain
reports and reasonable access to information and documentation regarding the
Mortgage Loans sufficient to permit such Certificateholder to comply with
applicable regulations of the OTS or other regulatory authorities with respect
to investment in the Certificates; provided that the Master Servicer shall be
entitled to be reimbursed by each such Certificateholder for actual expenses
incurred by the Master Servicer in providing such reports and access.

                  Section 3.08. PERMITTED WITHDRAWALS FROM THE CERTIFICATE
                                ACCOUNT, DISTRIBUTION ACCOUNT AND THE CARRYOVER
                                RESERVE FUND.

                  (a) The Master Servicer may from time to time make withdrawals
from the Certificate Account for the following purposes:

                  (i) to pay to the Master Servicer (to the extent not
         previously paid to or withheld by the Master Servicer), as servicing
         compensation in accordance with Section 3.15, that portion of any
         payment of interest that equals the Servicing Fee for the period with
         respect to which such interest payment was made, and, as additional
         servicing compensation, those other amounts set forth in Section 3.15;

                  (ii) to reimburse the Master Servicer for Advances made by it
         with respect to the Mortgage Loans, such right of reimbursement
         pursuant to this subclause (ii) being limited to amounts received on
         particular Mortgage Loan(s) (including, for this purpose, Liquidation
         Proceeds) that represent late recoveries of payments of principal
         and/or interest on such particular Mortgage Loan(s) in respect of which
         any such Advance was made;

                  (iii) to reimburse the Master Servicer for any Nonrecoverable
         Advance previously made;

                  (iv) to reimburse the Master Servicer from Insurance Proceeds
         for Insured Expenses covered by the related Required Insurance Policy;

                  (v) to pay the Master Servicer any unpaid Servicing Fees and
         to reimburse it for any unreimbursed Servicing Advances, the Master
         Servicer's right to reimbursement of

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         Servicing Advances pursuant to this subclause (v) with respect to any
         Mortgage Loan being limited to amounts received on particular Mortgage
         Loan(s) (including, for this purpose, Liquidation Proceeds and purchase
         and repurchase proceeds) that represent late recoveries of the payments
         for which such advances were made pursuant to Section 3.01 or Section
         3.06;

                  (vi) to pay to the Seller, the Depositor or the Master
         Servicer, as applicable, with respect to each Mortgage Loan or property
         acquired in respect thereof that has been purchased pursuant to Section
         2.02, 2.03 or 3.12, all amounts received thereon and not taken into
         account in determining the related Stated Principal Balance of such
         repurchased Mortgage Loan;

                  (vii) to reimburse the Seller, the Master Servicer or the
         Depositor for expenses incurred by any of them in connection with the
         Mortgage Loans or Certificates and reimbursable pursuant to Section
         6.03 hereof provided that such amount shall only be withdrawn following
         the withdrawal from the Certificate Account for deposit into the
         Distribution Account pursuant to the following paragraph;

                  (viii) to withdraw pursuant to Section 3.05 any amount
         deposited in the Certificate Account and not required to be deposited
         therein; and

                  (ix) to clear and terminate the Certificate Account upon
         termination of this Agreement pursuant to Section 9.01 hereof.

                  In addition, no later than 1:00 p.m. Pacific time on the
Distribution Account Deposit Date, the Master Servicer shall withdraw from the
Certificate Account and remit to the Trustee the Interest Remittance Amount and
the Principal Remittance Amount for such Distribution Date to the extent on
deposit in the Certificate Account, and the Trustee shall deposit such amount in
the Distribution Account.

                  The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Certificate Account pursuant to subclauses
(i), (ii), (iv), (v) and (vi) above. Prior to making any withdrawal from the
Certificate Account pursuant to subclause (iii), the Master Servicer shall
deliver to the Trustee an Officer's Certificate of a Servicing Officer
indicating the amount of any previous Advance determined by the Master Servicer
to be a Nonrecoverable Advance and identifying the related Mortgage Loan(s), and
their respective portions of such Nonrecoverable Advance.

                  (b) The Trustee shall withdraw funds from the Distribution
Account for distribution to the Certificateholders in the manner specified in
this Agreement (and to withhold from the amounts so withdrawn, the amount of any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.11). In addition, the Trustee may from time to time make withdrawals from the
Distribution Account for the following purposes:

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                  (i) to pay to the Master Servicer, as additional servicing
         compensation, earnings on or investment income with respect to funds in
         or credited to the Distribution Account;

                  (ii) to pay to the Co-Trustee, for payment to the Mortgage
         Insurer as provided below, the Mortgage Insurance Premium;

                  (iii) to pay the Trustee the Trustee Fee on each Distribution
         Date;

                  (iv) to withdraw pursuant to Section 3.05 any amount deposited
         in the Distribution Account and not required to be deposited therein;
         and

                  (v) to clear and terminate the Distribution Account upon
         termination of the Agreement pursuant to Section 9.01 hereof.

                  The Co-Trustee shall pay the Mortgage Insurance Premium to the
Mortgage Insurer in accordance with the following wiring instructions: Firstar
Bank, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53201, ABA #075000022 For
the Account of Mortgage Guaranty Insurance Corporation Account #112663706,
Attention: Premium Pay - 0451545690 (2003-BC1).

                  (c) The Trustee shall withdraw funds from the Carryover
Reserve Fund for distribution to the Certificateholders in the manner specified
in this Agreement (and to withhold from the amounts so withdrawn, the amount of
any taxes that it is authorized to retain pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Carryover Reserve Fund for the following purposes:

                  (i) to withdraw pursuant to Section 3.05 any amount deposited
         in the Carryover Reserve Fund and not required to be deposited therein;
         and

                  (ii) to clear and terminate the Carryover Reserve Fund upon
         termination of the Agreement pursuant to Section 9.01 hereof.

                  Section 3.09. [RESERVED.]

                  Section 3.10. MAINTENANCE OF HAZARD INSURANCE.

                  The Master Servicer shall cause to be maintained, for each
Mortgage Loan, hazard insurance with extended coverage in an amount that is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
of such policy shall be sufficient to prevent the related Mortgagor and/or
mortgagee from becoming a co-insurer. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Master Servicer shall also cause flood insurance
to be maintained on property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, to the extent described below. Pursuant to
Section 3.05 hereof, any amounts collected by the Master Servicer under any such
policies (other

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than the amounts to be applied to the restoration or repair of the related
Mortgaged Property or property thus acquired or amounts released to the
Mortgagor in accordance with the Master Servicer's normal servicing procedures)
shall be deposited in the Certificate Account. Any cost incurred by the Master
Servicer in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such costs
shall be recoverable by the Master Servicer out of late payments by the related
Mortgagor or out of Liquidation Proceeds to the extent permitted by Section 3.08
hereof. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Mortgage Loan in a federally designated special flood hazard
area and such area is participating in the national flood insurance program, the
Master Servicer shall cause flood insurance to be maintained with respect to
such Mortgage Loan. Such flood insurance shall be in an amount equal to the
lesser of (i) the original principal balance of the related Mortgage Loan, (ii)
the replacement value of the improvements that are part of such Mortgaged
Property, or (iii) the maximum amount of such insurance available for the
related Mortgaged Property under the Flood Disaster Protection Act of 1973, as
amended.

                  Section 3.11. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
                                AGREEMENTS.

                  (a) Except as otherwise provided in this Section 3.11(a), when
any property subject to a Mortgage has been or is about to be conveyed by the
Mortgagor, the Master Servicer shall to the extent that it has knowledge of such
conveyance, enforce any due-on-sale clause contained in any Mortgage Note or
Mortgage, to the extent permitted under applicable law and governmental
regulations, but only to the extent that such enforcement will not adversely
affect or jeopardize coverage under any Required Insurance Policy.
Notwithstanding the foregoing, the Master Servicer is not required to exercise
such rights with respect to a Mortgage Loan if the Person to whom the related
Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage related thereto
and the consent of the mortgagee under such Mortgage Note or Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a condition to
such transfer. In the event that the Master Servicer is prohibited by law from
enforcing any such due-on-sale clause, or if coverage under any Required
Insurance Policy would be adversely affected, or if nonenforcement is otherwise
permitted hereunder, the Master Servicer is authorized, subject to Section
3.11(b), to take or enter into an assumption and modification agreement from or
with the person to whom such property has been or is about to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, unless
prohibited by applicable state law, the Mortgagor remains liable thereon,
provided that the Mortgage Loan shall continue to be covered (if so covered
before the Master Servicer enters such agreement) by the applicable Required
Insurance Policies. The Master Servicer, subject to Section 3.11(b), is also
authorized with the prior approval of the insurers under any Required Insurance
Policies to enter into a substitution of liability agreement with such Person,
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as Mortgagor and becomes liable under the

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Mortgage Note. Notwithstanding the foregoing, the Master Servicer shall not be
deemed to be in default under this Section 3.11(a) by reason of any transfer or
assumption that the Master Servicer reasonably believes it is restricted by law
from preventing.

                  (b) Subject to the Master Servicer's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.11(a) hereof, in any
case in which a Mortgaged Property has been conveyed to a Person by a Mortgagor,
and such Person is to enter into an assumption agreement or modification
agreement or supplement to the Mortgage Note or Mortgage that requires the
signature of the Trustee, or if an instrument of release signed by the Trustee
is required releasing the Mortgagor from liability on the Mortgage Loan, the
Master Servicer shall prepare and deliver or cause to be prepared and delivered
to the Trustee for signature and shall direct, in writing, the Trustee to
execute the assumption agreement with the Person to whom the Mortgaged Property
is to be conveyed and such modification agreement or supplement to the Mortgage
Note or Mortgage or other instruments as are reasonable or necessary to carry
out the terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of the
Mortgage Note (including, but not limited to, the Mortgage Rate, the amount of
the Scheduled Payment, the Maximum Mortgage Rate, the Minimum Mortgage Rate, the
Gross Margin, the Periodic Rate Cap, the Adjustment Date and any other term
affecting the amount or timing of payment on the Mortgage Loan) may be changed.
In addition, the substitute Mortgagor and the Mortgaged Property must be
acceptable to the Master Servicer in accordance with its underwriting standards
as then in effect. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Co-Trustee the original of such substitution or assumption agreement, which in
the case of the original shall be added to the related Mortgage File and shall,
for all purposes, be considered a part of such Mortgage File to the same extent
as all other documents and instruments constituting a part thereof. Any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement will be retained by the Master Servicer as additional
servicing compensation.

                  Section 3.12. REALIZATION UPON DEFAULTED MORTGAGE LOANS;
                                DETERMINATION OF EXCESS PROCEEDS AND REALIZED
                                LOSSES; REPURCHASE OF CERTAIN MORTGAGE LOANS.

                  (a) The Master Servicer shall use reasonable efforts 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. In connection with such foreclosure or other conversion, the Master
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable and as shall be normal and usual in its general mortgage servicing
activities and the requirements of the insurer under any Required Insurance
Policy; provided that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation

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<PAGE>

Proceeds (respecting which it shall have priority for purposes of withdrawals
from the Certificate Account pursuant to Section 3.08 hereof). The Master
Servicer shall be responsible for all other costs and expenses incurred by it in
any such proceedings; provided that it shall be entitled to reimbursement
thereof from the proceeds of liquidation of the related Mortgaged Property, as
contemplated in Section 3.08 hereof. If the Master Servicer has knowledge that a
Mortgaged Property that the Master Servicer is contemplating acquiring in
foreclosure or by deed-in-lieu of foreclosure is located within a one-mile
radius of any site with environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer will, prior to acquiring the Mortgaged
Property, consider such risks and only take action in accordance with its
established environmental review procedures.

                  With respect to any REO Property, the deed or certificate of
sale shall be taken in the name of the Trustee for the benefit of the
Certificateholders (or the Trustee's nominee on behalf of the
Certificateholders). The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Master Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity thereunder. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Master Servicer and the
Certificateholders for the period prior to the sale of such REO Property. The
Master Servicer shall prepare for and deliver to the Trustee a statement with
respect to each REO Property that has been rented showing the aggregate rental
income received and all expenses incurred in connection with the management and
maintenance of such REO Property at such times as is necessary to enable the
Trustee to comply with the reporting requirements of the REMIC Provisions. The
net monthly rental income, if any, from such REO Property shall be deposited in
the Certificate Account no later than the close of business on each
Determination Date. The Master Servicer shall perform the tax reporting and
withholding related to foreclosures, abandonments and cancellation of
indebtedness income as specified by Sections 1445, 6050J and 6050P of the Code
by preparing and filing such tax and information returns, as may be required.

                  In the event that the Trust Fund acquires any Mortgaged
Property as aforesaid or otherwise in connection with a default or imminent
default on a Mortgage Loan, the Master Servicer shall dispose of such Mortgaged
Property as soon as practicable in a manner that maximizes the Liquidation
Proceeds, but in no event later than three years after its acquisition by the
Trust Fund or, at the expense of the Trust Fund, the Master Servicer shall
request, more than 60 days prior to the day on which such three-year period
would otherwise expire, an extension of the three-year grace period. In the
event the Trustee shall have been supplied with an Opinion of Counsel (such
opinion not to be an expense of the Trustee) to the effect that the holding by
the Trust Fund of such Mortgaged Property subsequent to such three-year period
will not result in the imposition of taxes on "prohibited transactions" of the
Trust Fund as defined in section 860F of the Code or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding,
the Trust Fund may continue to hold such Mortgaged Property

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<PAGE>

(subject to any conditions contained in such Opinion of Counsel) after the
expiration of such three-year period. Notwithstanding any other provision of
this Agreement, no Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the Trust Fund in such a manner or pursuant to any
terms that would (i) cause such Mortgaged Property to fail to qualify as
"foreclosure property" within the meaning of section 860G(a)(8) of the Code or
(ii) subject the Trust Fund to the imposition of any federal, state or local
income taxes on the income earned from such Mortgaged Property under section
860G(c) of the Code or otherwise, unless the Master Servicer has agreed to
indemnify and hold harmless the Trust Fund with respect to the imposition of any
such taxes.

                  The decision of the Master Servicer to foreclose on a
defaulted Mortgage Loan shall be subject to a determination by the Master
Servicer that the proceeds of such foreclosure would exceed the costs and
expenses of bringing such a proceeding. The income earned from the management of
any Mortgaged Properties acquired through foreclosure or other judicial
proceeding, net of reimbursement to the Master Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of unreimbursed Servicing Fees, Advances, Servicing Advances and any
management fee paid or to be paid with respect to the management of such
Mortgaged Property, shall be applied to the payment of principal of, and
interest on, the related defaulted Mortgage Loans (with interest accruing as
though such Mortgage Loans were still current) and all such income shall be
deemed, for all purposes in this Agreement, to be payments on account of
principal and interest on the related Mortgage Notes and shall be deposited into
the Certificate Account. To the extent the income received during a Prepayment
Period is in excess of the amount attributable to amortizing principal and
accrued interest at the related Mortgage Rate on the related Mortgage Loan, such
excess shall be considered to be a partial Principal Prepayment for all purposes
hereof.

                  The Liquidation Proceeds from any liquidation of a Mortgage
Loan, net of any payment to the Master Servicer as provided above, shall be
deposited in the Certificate Account on the next succeeding Determination Date
following receipt thereof for distribution on the related Distribution Date,
except that any Excess Proceeds shall be retained by the Master Servicer as
additional servicing compensation.

                  The proceeds of any Liquidated Loan, as well as any recovery
resulting from a partial collection of Liquidation Proceeds or any income from
an REO Property, will be applied in the following order of priority: first, to
reimburse the Master Servicer for any related unreimbursed Servicing Advances
and Servicing Fees, pursuant to Section 3.08(a)(v) or this Section 3.12; second,
to reimburse the Master Servicer for any unreimbursed Advances, pursuant to
Section 3.08(a)(ii) or this Section 3.12; third, to accrued and unpaid interest
(to the extent no Advance has been made for such amount) on the Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fourth, as a
recovery of principal of the Mortgage Loan.

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<PAGE>

                  (b) On each Determination Date, the Master Servicer shall
determine the respective aggregate amounts of Excess Proceeds and Realized
Losses, if any, for the related Prepayment Period.

                  (c) The Master Servicer, in its sole discretion, shall have
the right to elect (by written notice sent to the Trustee) to purchase for its
own account from the Trust Fund any Mortgage Loan that is 150 days or more
delinquent at a price equal to the Purchase Price; provided, however, that the
Master Servicer may only exercise this right on or before the last day of the
calendar month in which such Mortgage Loan became 150 days delinquent (such
month, the "Eligible Repurchase Month"); provided further, that any such
Mortgage Loan which becomes current but thereafter becomes delinquent may be
purchased by the Master Servicer pursuant to this Section in any ensuing
Eligible Repurchase Month. The Purchase Price for any Mortgage Loan purchased
hereunder shall be delivered to the Trustee for deposit in the Certificate
Account and the Trustee, upon receipt of such deposit and a Request for Release
from the Master Servicer in the form of Exhibit N hereto, shall release or cause
to be released to the purchaser of such Mortgage Loan the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment
prepared by the purchaser of such Mortgage Loan, in each case without recourse,
as shall be necessary to vest in the purchaser of such Mortgage Loan any
Mortgage Loan released pursuant hereto and the purchaser of such Mortgage Loan
shall succeed to all the Trustee's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and
documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto.

                  Section 3.13. CO-TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE
                                FILES.

                  Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Master Servicer will promptly
notify the Co-Trustee by delivering a Request for Release substantially in the
form of Exhibit N. Upon receipt of such request, the Co-Trustee shall promptly
release the related Mortgage File to the Master Servicer, and the Co-Trustee
shall at the Master Servicer's direction execute and deliver to the Master
Servicer the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage
in each case provided by the Master Servicer, together with the Mortgage Note
with written evidence of cancellation thereon. The Master Servicer is authorized
to cause the removal from the registration on the MERS(R) System of such
Mortgage and to execute and deliver, on behalf of the Trust Fund and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Certificate Account, the Distribution Account, the Carryover Reserve Fund
or the related subservicing account. From time to time and as shall be
appropriate for the servicing or foreclosure of any Mortgage Loan, including for
such purpose, collection under any policy of flood insurance any fidelity bond
or errors or omissions policy, or for the purposes of effecting a partial
release of any Mortgaged Property from the lien of the Mortgage or the making of
any

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<PAGE>

corrections to the Mortgage Note or the Mortgage or any of the other documents
included in the Mortgage File, the Co-Trustee shall, upon delivery to the
Co-Trustee of a Request for Release in the form of Exhibit M signed by a
Servicing Officer, release the Mortgage File to the Master Servicer. Subject to
the further limitations set forth below, the Master Servicer shall cause the
Mortgage File or documents so released to be returned to the Co-Trustee when the
need therefor by the Master Servicer no longer exists, unless the Mortgage Loan
is liquidated and the proceeds thereof are deposited in the Certificate Account,
in which case the Co-Trustee shall deliver the Request for Release to the Master
Servicer.

                  If the Master Servicer at any time seeks to initiate a
foreclosure proceeding in respect of any Mortgaged Property as authorized by
this Agreement, the Master Servicer shall deliver or cause to be delivered to
the Trustee, for signature, as appropriate, any court pleadings, requests for
trustee's sale or other documents necessary to effectuate such foreclosure or
any legal action brought to obtain judgment against the Mortgagor on the
Mortgage Note or the Mortgage or to obtain a deficiency judgment or to enforce
any other remedies or rights provided by the Mortgage Note or the Mortgage or
otherwise available at law or in equity. Notwithstanding the foregoing, the
Master Servicer shall cause possession of any Mortgage File or of the documents
therein that shall have been released by the Co-Trustee to be returned to the
Co-Trustee within 21 calendar days after possession thereof shall have been
released by the Co-Trustee unless (i) the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Certificate Account, and the Master Servicer shall have delivered to the
Co-Trustee a Request for Release in the form of Exhibit N or (ii) the Mortgage
File or document shall 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 and the Master Servicer shall have delivered to the Trustee an
Officer's Certificate of a Servicing Officer certifying as to the name and
address of the Person to which the Mortgage File or the documents therein were
delivered and the purpose or purposes of such delivery.

                  Section 3.14. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
                                MASTER SERVICER TO BE HELD FOR THE TRUSTEE.

                  Notwithstanding any other provisions of this Agreement, the
Master Servicer shall transmit to the Co-Trustee as required by this Agreement
all documents and instruments in respect of a Mortgage Loan coming into the
possession of the Master Servicer from time to time and shall account fully to
the Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in the
Certificate Account, shall be held by the Master Servicer for and on behalf of
the Trust Fund and shall be and remain the sole and exclusive property of the
Trust Fund, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Certificate Account, Distribution
Account or Carryover Reserve Fund or in any Escrow Account

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(as defined in Section 3.06), or any funds that otherwise are or may become due
or payable to the Trustee for the benefit of the Certificateholders, to any
claim, lien, security interest, judgment, levy, writ of attachment or other
encumbrance, or assert by legal action or otherwise any claim or right of set
off against any Mortgage File or any funds collected on, or in connection with,
a Mortgage Loan, except, however, that the Master Servicer shall be entitled to
set off against and deduct from any such funds any amounts that are properly due
and payable to the Master Servicer under this Agreement.

                  Section 3.15. SERVICING COMPENSATION.

                  As compensation for its activities hereunder, the Master
Servicer shall be entitled to retain or withdraw from the Certificate Account
out of each payment of interest on a Mortgage Loan included in the Trust Fund an
amount equal to interest at the applicable Servicing Fee Rate on the Stated
Principal Balance of the related Mortgage Loan for the period covered by such
interest payment.

                  Additional servicing compensation in the form of Excess
Proceeds, assumption fees, late payment charges, Prepayment Interest Excess, and
all income and gain net of any losses realized from Permitted Investments shall
be retained by the Master Servicer to the extent not required to be deposited in
the Certificate Account pursuant to Section 3.05 or 3.12(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.10 hereof and maintenance of the other forms
of insurance coverage required by Section 3.10 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08 and
3.12 hereof.

                  Section 3.16. ACCESS TO CERTAIN DOCUMENTATION.

                  The Master Servicer shall provide to the OTS and the FDIC and
to comparable regulatory authorities supervising Holders of the Certificates and
the examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Master Servicer designated by it.
Nothing in this Section shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach of
this Section.

                  Section 3.17. ANNUAL STATEMENT AS TO COMPLIANCE.

                  The Master Servicer shall deliver to the Depositor and the
Trustee on or before the 120th day after the end of the Master Servicer's fiscal
year, commencing with its 2003 fiscal year, an Officer's Certificate stating, as
to the signer thereof, that (i) a review of the activities of the Master
Servicer during the preceding calendar year and of the performance of the Master

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Servicer under this Agreement has been made under such officer's supervision and
(ii) to the best of such officer's knowledge, based on such review, the Master
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof and (iii) to the best of such officer's knowledge, each Subservicer has
fulfilled all its obligations under its Subservicing Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation
specifying each such default known to such officer and the nature and status
thereof. The Trustee shall forward a copy of each such statement to each Rating
Agency. Copies of such statement shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
statement is delivered by the Master Servicer to the Trustee.

                  Section 3.18. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
                                STATEMENT; FINANCIAL STATEMENTS.

                  On or before the later of (i) the 120th day after the end of
the Master Servicer's fiscal year, commencing with its 2003 fiscal year or (ii)
within 30 days of the issuance of the annual audited financial statements
beginning with the audit for the period ending in 2003, the Master Servicer at
its expense shall cause a nationally recognized firm of independent public
accountants (who may also render other services to the Master Servicer, the
Seller or any affiliate thereof) that is a member of the American Institute of
Certified Public Accountants to furnish a report to the Trustee, Depositor and
the Seller in compliance with the Uniform Single Attestation Program for
Mortgage Bankers. Copies of such report shall be provided by the Trustee to any
Certificateholder upon request at the Master Servicer's expense, provided such
report is delivered by the Master Servicer to the Trustee. Upon written request,
the Master Servicer shall provide to the Certificateholders its publicly
available annual financial statements (or, for so long as Countrywide Home Loans
Servicing LP is the Master Servicer hereunder, the Master Servicer's parent
company's publicly available annual financial statements), if any, promptly
after they become available.

                  Section 3.19. THE CAP CONTRACT.

                  The Seller shall assign all of its right, title and interest
in and to the interest rate cap transactions evidenced by the Cap Contract to,
and shall cause all of its obligations in respect of each such transaction to be
assumed by, the Trustee on behalf of the Trust Fund, on the terms and conditions
set forth in the Cap Contract Assignment Agreement. The Cap Contract will be an
asset of the Trust Fund but will not be an asset of any REMIC. The Master
Servicer, on behalf of the Trustee, shall deposit any amounts received from time
to time with respect to the Cap Contract into the Distribution Account.

                  The Master Servicer, on behalf of the Trustee, shall prepare
and deliver any notices required to be delivered under the Cap Contract.

                  The Master Servicer, on behalf of the Trustee, shall act as
calculation agent and/or shall terminate the Cap Contract, in each case upon the
occurrence of certain events of default or

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termination events to the extent specified thereunder. Upon any such
termination, the Cap Contract Counterparty will be obligated to pay the Trustee
or the Master Servicer for the benefit of the Trust Fund an amount in respect of
such termination. Any amounts received by the Trustee or the Master Servicer for
the benefit of the Trust Fund, as the case may be, in respect of such
termination shall be deposited and held in the Distribution Account to pay Net
Rate Carryover for the Certificates (by deposit of the amount of any such Net
Rate Carryover in the Carryover Reserve Fund for payment to the related
Certificateholders) as provided in Section 4.04(a) on Distribution Dates
following such termination to and including the Cap Contract Termination Date.
On the Cap Contract Termination Date, after all other distributions on such
date, if any such amounts in respect of early termination remain in the
Carryover Reserve Fund, such amounts shall be distributed by the Trustee to the
Class C Certificateholder.

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                                  ARTICLE IV.

                                DISTRIBUTIONS AND
                         ADVANCES BY THE MASTER SERVICER

                  Section 4.01. ADVANCES.

                  Subject to the conditions of this Article IV, the Master
Servicer, as required below, shall make an Advance and deposit such Advance in
the Certificate Account. Each such Advance shall be remitted to the Certificate
Account no later than 1:00 p.m. Pacific time on the Master Servicer Advance Date
in immediately available funds. The Master Servicer shall be obligated to make
any such Advance only to the extent that such advance would not be a
Nonrecoverable Advance. If the Master Servicer shall have determined that it has
made a Nonrecoverable Advance or that a proposed Advance or a lesser portion of
such Advance would constitute a Nonrecoverable Advance, the Master Servicer
shall deliver (i) to the Trustee for the benefit of the Certificateholders funds
constituting the remaining portion of such Advance, if applicable, and (ii) to
the Depositor, each Rating Agency and the Trustee an Officer's Certificate
setting forth the basis for such determination.

                  In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may (i) cause to be made an appropriate entry in
its records relating to the Certificate Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance and (ii) transfer such funds from the
Certificate Account to the Distribution Account. Any funds so applied and
transferred shall be replaced by the Master Servicer by deposit in the
Certificate Account no later than the close of business on the Business Day
immediately preceding the Distribution Date on which such funds are required to
be distributed pursuant to this Agreement. The Master Servicer shall be entitled
to be reimbursed from the Certificate Account for all Advances of its own funds
made pursuant to this Section as provided in Section 3.08. The obligation to
make Advances with respect to any Mortgage Loan shall continue until such
Mortgage Loan is paid in full or the related Mortgaged Property or related REO
Property has been liquidated or until the purchase or repurchase thereof (or
substitution therefor) from the Trust Fund pursuant to any applicable provision
of this Agreement, except as otherwise provided in this Section 4.01.

                  Section 4.02. REDUCTION OF SERVICING COMPENSATION IN
                                CONNECTION WITH PREPAYMENT INTEREST SHORTFALLS.

                  In the event that any Mortgage Loan is the subject of a
Prepayment Interest Shortfall, the Master Servicer shall, to the extent of
one-half of the Servicing Fee for such Distribution Date, deposit into the
Certificate Account, as a reduction of the Servicing Fee (but not in excess of
one-half thereof) for such Distribution Date, no later than the close of
business on the Business Day immediately preceding such Distribution Date, an
amount equal to the Prepayment Interest Shortfall; and in case of such deposit,
the Master Servicer shall not be entitled to any recovery or reimbursement from
the Depositor, the Trustee, the Trust Fund or the Certificateholders.

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                  Section 4.03. [Reserved]

                  Section 4.04. DISTRIBUTIONS.

                  (a) On each Distribution Date, the Interest Funds for such
Distribution Date shall be allocated by the Trustee from the Distribution
Account in the following order of priority:

                  (i) to the Class A-1 Certificates and Class A-IO Certificates,
         pro rata, the Current Interest and any Interest Carry Forward Amount
         for such Class;

                  (ii) to the Class M-1 Certificates, the Current Interest for
         such Class;

                  (iii) to the Class M-2 Certificates, the Current Interest for
         such Class;

                  (iv) to the Class B-1 Certificates, the Current Interest for
         such Class; and

                  (v) any remainder, as part of the Excess Cashflow.

                  (b) On each Distribution Date on or prior to the Cap Contract
Termination Date, amounts received in respect of the Cap Contract for such
Distribution Date will be deposited in the Carryover Reserve Fund to be
distributed to each Class of Certificates (other than the Class A-IO, Class A-R,
Class C and Class P Certificates) to the extent of any Net Rate Carryover for
such Class of Certificates for such Distribution Date sequentially to the Class
A-1, Class M-1, Class M-2 and Class B-1 Certificates, and any remaining amounts
shall be distributed to the Class C Certificateholder; provided, however, that
if the Cap Contract is subject to early termination, early termination payments
shall be held by the Trustee until the Cap Contract Termination Date and
deposited in the Carryover Reserve Fund, as necessary, to pay any Net Rate
Carryover as provided in Section 3.19.

                  (c) On each Distribution Date, after payment of the amounts
received on the Cap Contract as provided in Section 4.04(b) above, amounts on
deposit in the Carryover Reserve Fund (after deposits therein as provided in
Section 4.04(e)(ii)) shall be allocated by the Trustee to each Class of
Certificates (other than the Class A-IO, Class A-R, Class C and Class P
Certificates) to the extent of any remaining Net Rate Carryover for such Class
of Certificates for such Distribution Date as provided in Section 4.04(e)(ii).

                  (d) On each Distribution Date, the Principal Distribution
Amount for such Distribution Date shall be allocated by the Trustee from the
Distribution Account in the following order of priority:

                  (i) with respect to any Distribution Date prior to the
         Stepdown Date or as to which a Trigger Event is in effect:

                  (A) sequentially, to the Class A-R, Class A-1, Class M-1,
         Class M-2 and Class B-1 Certificates, in that order, in each case until
         the Certificate Principal Balance thereof is reduced to zero;

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                  (B) any remainder, as part of the Excess Cashflow to the Class
A-R Certificates.

                  (ii) with respect to each Distribution Date on and after the
         Stepdown Date and as to which a Trigger Event is not in effect:

                  (A) to the Class A-1 Certificates, the Class A-1 Principal
         Distribution Amount, until the Certificate Principal Balance thereof is
         reduced to zero;

                  (B) to the Class M-1 Certificates, the Class M-1 Principal
         Distribution Amount, until the Certificate Principal Balance thereof is
         reduced to zero;

                  (C) to the Class M-2 Certificates, the Class M-2 Principal
         Distribution Amount, until the Certificate Principal Balance thereof is
         reduced to zero;

                  (D) to the Class B-1 Certificates, the Class B-1 Principal
         Distribution Amount, until the Certificate Principal Balance thereof is
         reduced to zero; and

                  (E) any remainder, as part of the Excess Cashflow.

                  (e) With respect to any Distribution Date, any Excess Cashflow
will be paid to the classes of Certificates as follows:

                  (i) to the holders of the Classes of Offered Certificates then
         entitled to receive distributions in respect of principal, in an amount
         equal to the Extra Principal Distribution Amount, payable to such
         holders as part of the Principal Distribution Amount pursuant to
         Section 4.04(d) above;

                  (ii) from any remaining Excess Cashflow to the Carryover
         Reserve Fund in an amount needed to pay any remaining unpaid Net Rate
         Carryover for each Class of Offered Certificates (other than the Class
         A-IO Certificates and Class A-R Certificates) (after application of
         amounts received on the Cap Contract to pay Net Rate Carryover as
         provided in Section 4.04(b)); and then to pay such amount from the
         Carryover Reserve Fund, sequentially to the Class A-1, Class M-1, Class
         M-2 and Class B-1 Certificates in amount equal to such Net Rate
         Carryover for each such Class;

                  (iii) from any remaining Excess Cashflow, to the Class A-1
         Certificates in an amount equal to any remaining unpaid Interest Carry
         Forward Amount for such Class;

                  (iv) from any remaining Excess Cashflow, to the Class M-1
         Certificates in an amount equal to any Interest Carry Forward Amount
         for such Class;

                  (v) from any remaining Excess Cashflow, to the Class M-1
         Certificates in an amount equal to the Unpaid Realized Loss Amounts for
         the such Class;

                  (vi) from any remaining Excess Cashflow, to the Class M-2
         Certificates in an amount equal to any Interest Carry Forward Amount
         for such Class;

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                  (vii) from any remaining Excess Cashflow, to the Class M-2
         Certificates in an amount equal to the Unpaid Realized Loss Amounts for
         such Class;

                  (viii) from any remaining Excess Cashflow, to the Class B-1
         Certificates in an amount equal to any Interest Carry Forward Amount
         for such Class;

                  (ix) from any remaining Excess Cashflow, to the Class B-1
         Certificates in an amount equal to the Unpaid Realized Loss Amounts for
         such Class;

                  (x) from any remaining Excess Cashflow, to the Carryover
         Reserve Fund, in an amount equal to the Secondary Carryover Reserve
         Fund Deposit;

                  (xi) from any remaining Excess Cashflow, to the Class P
         Certificates, on the earlier of (a) the exercise of the Optional
         Termination by the Master Servicer pursuant to Section 9.01 and (b) the
         last Distribution Date immediately following the expiration of the
         latest Prepayment Charge as identified on the Prepayment Charge
         Schedule, any remaining Excess Cashflow shall be paid to the Class P
         Certificates, in reduction of the Certificate Principal Balance
         thereof, until reduced to zero;

                  (xii) from any remaining Excess Cashflow, to the Class C
         Certificates, (x) the Current Interest for such Class and (y) any
         remaining Excess Cashflow shall be paid to the Class C Certificates to
         reduce the Class C Notional Amount, until the Class C Notional Amount
         has been reduced to zero; and

                  (xiii) any remaining Excess Cashflow, to the Class A-R
         Certificates.

                  (f) On each Distribution Date, an amount equal to all
Prepayment Charges received during the related Prepayment Period will be
distributed to the holders of the Class P Certificates.

                  (g) To the extent that a Class of Certificates (other than the
Class A-IO, Class A-R, Class C and Class P Certificates) receives interest in
excess of the Net Rate Cap, such interest shall be treated as having been paid
to the Carryover Reserve Fund and then paid by the Carryover Reserve Fund to
such Certificateholders.

                  (h) [reserved]

                  (i) On each Distribution Date, the Trustee shall allocate the
         Applied Realized Loss Amount to reduce the Certificate Principal
         Balances of the Certificates in the following order of priority:

                  (i) to the Class B-1 Certificates until the Class B-1
         Certificate Principal Balance is reduced to zero;

                  (ii) to the Class M-2 Certificates until the Class M-2
         Certificate Principal Balance is reduced to zero; and

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                  (iii) to the Class M-1 Certificates until the Class M-1
         Certificate Principal Balance is reduced to zero.

                  (j) Subject to Section 9.02 hereof respecting the final
distribution, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if (i) such Holder has
so notified the Trustee at least 5 Business Days prior to the related Record
Date and (ii) such Holder shall hold Regular Certificates with aggregate
principal denominations of not less than $1,000,000 or evidencing a Percentage
Interest aggregating 10% or more with respect to such Class or, if not, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 9.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.

                  On or before 5:00 p.m. Pacific time on the fifth Business Day
following each Determination Date (but in no event later than 5:00 p.m. Pacific
time on the third Business Day before the related Distribution Date), the Master
Servicer shall deliver a report to the Trustee in the form of a computer
readable magnetic tape (or by such other means as the Master Servicer and the
Trustee may agree from time to time) containing such data and information as
agreed to by the Master Servicer and the Trustee such as to permit the Trustee
to prepare the Monthly Statement to Certificateholders and make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Trustee shall, not later than 9:00 a.m. Pacific time on the Master Servicer
Advance Date, other than any Master Servicer Advance Date relating to any
Distribution Date on which the proceeds of any Optional Termination are being
distributed, (i) furnish by telecopy a statement to the Master Servicer (the
information in such statement to be made available to Certificateholders by the
Trustee on request) setting forth the Interest Funds and Principal Funds for
such Distribution Date and the amount to be withdrawn from the Certificate
Account and (ii) determine (and notify the Master Servicer by telecopy of the
results of such determination) the amount of Advances to be made by the Master
Servicer in respect of the related Distribution Date; provided that no Advance
shall be made if it would be a Nonrecoverable Advance; provided further that any
failure by the Trustee to notify the Master Servicer will not relieve the Master
Servicer from any obligation to make any such Advances. The Trustee shall not be
responsible to recompute, recalculate or verify information provided to it by
the Master Servicer and shall be permitted to conclusively rely on any
information provided to it by the Master Servicer.

                  Section 4.05. MONTHLY STATEMENTS TO CERTIFICATEHOLDERS.

                  (a) Not later than each Distribution Date, the Trustee shall
prepare and cause to be forwarded by first class mail to each Holder of a Class
of Certificates of the Trust Fund, the Master Servicer, the Seller and the
Depositor a statement setting forth for the Certificates:

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                  (i) the amount of the related distribution to Holders of each
         Class allocable to principal, separately identifying (A) the aggregate
         amount of any Principal Prepayments included therein and (B) the
         aggregate of all scheduled payments of principal included therein; (ii)
         the amount of such distribution to Holders of each Class allocable to
         interest;

                  (iii) any Interest Carry Forward Amount for each Class;

                  (iv) the Certificate Principal Balance of each Class after
         giving effect (i) to all distributions allocable to principal on such
         Distribution Date and (ii) the allocation of any Applied Realized Loss
         Amounts for such Distribution Date;

                  (v) the aggregate of the Stated Principal Balances of the
         Mortgage Loans for the Mortgage Pool;

                  (vi) the related amount of the Servicing Fees paid to or
         retained by the Master Servicer for the related Due Period;

                  (vii) the Pass-Through Rate for each Class of Certificates
         with respect to the current Accrual Period;

                  (viii) with respect to the February 2003 Distribution Date,
         the Seller Shortfall Interest Requirement (if any) for the related
         Master Servicer Advance Date;

                  (ix) the amount of Advances included in the distribution on
         such Distribution Date;

                  (x) the cumulative amount of Applied Realized Loss Amounts to
         date;

                  (xi) the cumulative amount of claim payments made pursuant to
         the Mortgage Insurance Policy and the cumulative amount of claims
         rejected or denied under the Mortgage Insurance Policy;

                  (xii) the number and aggregate principal amounts of Mortgage
         Loans: (A) Delinquent (exclusive of Mortgage Loans in foreclosure) (1)
         30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, and (B) in
         foreclosure and Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3)
         90 or more days, in each case as of the close of business on the last
         day of the calendar month preceding such Distribution Date;

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

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                  (xiv) and the aggregate Stated Principal Balances of any
         Mortgage Loans converted to REO Properties as of the close of business
         on the Determination Date preceding such Distribution Date;

                  (xv) the aggregate Stated Principal Balances of all Liquidated
         Loans;

                  (xvi) with respect to any Liquidated Loan, the loan number and
         Stated Principal Balance relating thereto;

                  (xvii) whether a Trigger Event has occurred;

                  (xviii) any Net Rate Carryover paid on each Class of
         Certificates (other than the Class A-IO, Class A-R, Class C and Class P
         Certificates) and any remaining Net Rate Carryover remaining on each
         Class of Certificates (other than the Class A-IO, Class A-R, Class C
         and Class P Certificates) on such Distribution Date;

                  (xix) the amount of Prepayment Charges collected or waived by
         the Master Servicer;

                  (xx) [reserved];

                  (xxi) [reserved]; and

                  (xxii) the amount, if any, received under the Cap Contract for
         such Distribution Date.

                  (b) The Trustee's responsibility for disbursing the above
information to the Certificateholders is limited to the availability, timeliness
and accuracy of the information derived from the Master Servicer. The Trustee
will send a copy of each statement provided pursuant to this Section 4.05 to
each Rating Agency. The Trustee may make the above information available to
Certificateholders via the Trustee's website at http://www.mbsreporting.com.

                  (c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.05 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.

                  (d) Upon filing with the Internal Revenue Service, the Trustee
shall furnish to the Holders of the Class A-R Certificates the Form 1066 and
each Form 1066Q and shall respond promptly to written requests made not more
frequently than quarterly by any Holder of Class A-R Certificates with respect
to the following matters:

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                  (i) The original projected principal and interest cash flows
         on the Closing Date on each related Class of regular and residual
         interests created hereunder and on the Mortgage Loans, based on the
         Prepayment Assumption;

                  (ii) The projected remaining principal and interest cash flows
         as of the end of any calendar quarter with respect to each related
         Class of regular and residual interests created hereunder and the
         Mortgage Loans, based on the Prepayment Assumption;

                  (iii) The applicable Prepayment Assumption and any interest
         rate assumptions used in determining the projected principal and
         interest cash flows described above;

                  (iv) The original issue discount (or, in the case of the
         Mortgage Loans, market discount) or premium accrued or amortized
         through the end of such calendar quarter with respect to each related
         Class of regular or residual interests created hereunder and to the
         Mortgage Loans, together with each constant yield to maturity used in
         computing the same;

                  (v) The treatment of losses realized with respect to the
         Mortgage Loans or the regular interests created hereunder, including
         the timing and amount of any cancellation of indebtedness income of the
         related REMIC with respect to such regular interests or bad debt
         deductions claimed with respect to the Mortgage Loans;

                  (vi) The amount and timing of any non-interest expenses of the
         related REMIC; and

                  (vii) Any taxes (including penalties and interest) imposed on
         the related REMIC, including, without limitation, taxes on "prohibited
         transactions," "contributions" or "net income from foreclosure
         property" or state or local income or franchise taxes.

                  The information pursuant to clauses (i), (ii), (iii) and (iv)
above shall be provided by the Depositor pursuant to Section 8.11.

                  Section 4.06. [RESERVED]

                  Section 4.07. [RESERVED]

                  Section 4.08. CARRYOVER RESERVE FUND.

                  (a) On the Closing Date, the Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the
Certificates, the Carryover Reserve Fund. On the Closing Date, the Seller shall
remit $5,000 to the Trustee, who shall deposit said funds in the Carryover
Reserve Fund. The Carryover Reserve Fund shall be an Eligible Account, and funds
on deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including without limitation, other moneys
held by the Trustee pursuant to this Agreement.

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                  (b) The Trustee shall make withdrawals from the Carryover
Reserve Fund to make distributions pursuant to paragraphs (b), (c) and (e) of
Section 4.04 hereof. Any amounts remaining after the distributions required
pursuant to preceding sentence shall be FIRST maintained in the Carryover
Reserve Fund up to an amount equal to the Secondary Carryover Reserve Fund
Deposit, and SECOND, distributed to the Class C Certificates; provided, however,
that if the Cap Contract is subject to early termination, early termination
payments received on such Cap Contract will be held by the Trustee until the Cap
Contract Termination Date and deposited in the Carryover Reserve Fund as
necessary to cover any Net Rate Carryover on the Certificates entitled thereto
on future Distribution Dates.

                  (c) Funds in the Carryover Reserve Fund may be invested in
Permitted Investments. Any earnings on such amounts shall be payable to the
Class C Certificates. The Class C Certificates shall evidence ownership of the
Carryover Reserve Fund for federal tax purposes and the Holders thereof
evidencing not less than 50% of the Voting Rights of such Class shall direct the
Trustee in writing as to the investment of amounts therein. In the absence of
such written direction, all funds in the Carryover Reserve Fund shall be
invested by the Trustee in The Bank of New York cash reserves.

                  (d) Upon termination of the Trust Fund, any amounts remaining
in the Carryover Reserve Fund shall be distributed to the Holders of the Class C
Certificates in the same manner as if distributed pursuant to Section 4.04(f)
hereof.

                  Section 4.09. DISTRIBUTIONS ON THE REMIC I REGULAR INTERESTS.

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

                  (A) first, to the Holders of REMIC I Regular Interest LT-IO,
in an amount equal to (A) the Uncertificated Accrued Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid from
previous Distribution Dates and second, to Holders of REMIC I Regular Interest
LT-1 and REMIC I Regular Interest LT-P in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any amounts
in respect thereof remaining unpaid from previous Distribution Dates; and

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

                  (2) second, to the Holders of REMIC I Regular Interests, in an
amount equal to the remainder of the Available Funds for such Distribution Date
after the distributions made pursuant to clause (1) above, allocated as follows:

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                  (A) to the Holders of REMIC I Regular Interest LT-IO, until
the Uncertificated Principal Balance of REMIC I Regular Interest LT-IO is
reduced to zero;

                  (B) to the Holders of REMIC I Regular Interest LT-1, until the
Uncertificated Principal Balance of REMIC I Regular Interest LT-1 is reduced to
zero; and

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

                  Section 4.10. DISTRIBUTIONS ON THE REMIC II REGULAR INTERESTS

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

                  (i) first, to the Holders of REMIC II Regular interest MT-IO-1
and REMIC II Regular interest MT-IO-2, pro rata, an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any amounts
in respect thereof remaining unpaid from previous Distribution Dates; then to
Holders of REMIC II Regular Interest MT-AA, REMIC II Regular Interest MT-A1,
REMIC II Regular Interest MT-M1, REMIC II Regular Interest MT-M2, REMIC II
Regular Interest MT-B1, REMIC II Regular Interest MT-ZZ and REMIC II Regular
Interest MT-P, pro rata, in an amount equal to (A) the Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates. Amounts payable as
Uncertificated Accrued Interest in respect of REMIC II Regular Interest MT-ZZ
shall be reduced and deferred when the REMIC II Overcollateralized Amount is
less than the REMIC II Overcollateralization Target Amount, by the lesser of (x)
the amount of such difference and (y) the REMIC II Regular Interest MT-ZZ
Maximum Interest Deferral Amount and such amount will be payable to the Holders
of REMIC II Regular Interest MT-A1, REMIC II Regular Interest MT-M1, REMIC II
Regular Interest MT-M2 and REMIC II Regular Interest MT-B1 in the same
proportion as the Overcollateralization Deficiency Amount is allocated to the
Corresponding Certificates;

         (ii) second, to the Holders of REMIC II Regular Interests, in an amount
equal to the remainder of the collections on the Mortgage Loans available for
distribution for such Distribution Date after the distributions made pursuant to
clause (i) above, allocated as follows:

         (a) to the Holders of REMIC II Regular Interest MT-AA and REMIC II
Regular Interest MT-P, 98.00% of such remainder (other than amounts payable
under clause (d) below), until the Uncertificated Balance of such REMIC II
Regular Interest is reduced to zero, provided, however, that REMIC II Regular
Interest MT-P shall not be reduced until the Distribution Date immediately
following the expiration of the latest Prepayment Charge as identified on the
Prepayment Charge Schedule or any Distribution Date thereafter, at which point
such amount

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<PAGE>

shall be distributed to REMIC II Regular Interest MT-P, until $100 has been
distributed pursuant to this clause;

         (b) to the Holders of REMIC II Regular Interest MT-A1, REMIC II Regular
Interest MT-M1, REMIC II Regular Interest MT-M2 and REMIC II Regular Interest
MT-B1, 1.00% of such remainder (other than amounts payable under clause (d)
below), in the same proportion as principal payments are allocated to the
Corresponding Certificates, until the Uncertificated Principal Balances of such
REMIC II Regular Interests are reduced to zero;

         (c) to the Holders of REMIC II Regular Interest MT-ZZ, 1.00% of such
remainder (other than amounts payable under clause (d) below), until the
Uncertificated Principal Balance of such REMIC II Regular Interest is reduced to
zero; then

         (d) any remaining amount to the Holders of the Class R Certificates (in
respect of the Class R-II Interest); and

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

                  On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period will be distributed by REMIC II to the Holders of REMIC II Regular
Interest MT-P. The payment of the foregoing amounts to the Holders of REMIC II
Regular Interest MT-P shall not reduce the Uncertificated Balance thereof.

                  Section 4.11. ALLOCATION OF REALIZED LOSSES ON THE REMIC I AND
                                REMIC II REGULAR INTERESTS.

                  (a) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date, first to REMIC I Regular
Interest LT-1 until the Uncertificated Principal Balance of such REMIC I Regular
Interest has been reduced to zero and then to REMIC I Regular Interest LT-IO,
until the Uncertificated Principal Balance of such REMIC I Regular Interest has
been reduced to zero.

                  (b) All Realized Losses on the Mortgage Loans shall be
allocated by the Trustee on each Distribution Date to the following REMIC II
Regular Interests in the specified percentages, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC II Regular Interest MT-AA
and REMIC II Regular Interest MT-ZZ up to an aggregate amount equal to the REMIC
II Interest Loss Allocation Amount, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of the REMIC II Regular Interest MT-AA and
REMIC II Regular Interest MT-ZZ up to an aggregate amount equal to the REMIC II
Principal Loss

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<PAGE>

Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC II Regular Interest MT-AA, REMIC II Regular Interest
MT-B1 and REMIC II Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Balance of REMIC II Regular Interest MT-B1 has been reduced
to zero; fourth to the Uncertificated Principal Balances of REMIC II Regular
Interest MT-AA, REMIC II Regular Interest MT-M2 and REMIC II Regular Interest
MT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC II Regular Interest MT-M2 has been reduced to zero; and fifth, to the
Uncertificated Principal Balances of REMIC II Regular Interest MT-AA, REMIC II
Regular Interest MT-M1 and REMIC II Regular Interest MT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest MT-M1 has been reduced to zero.

                  Section 4.12. TERMINATION OF THE MORTGAGE INSURANCE POLICY.

                  If on any given date the rating of Mortgage Guarantee
Insurance Corporation's claims-paying ability from S&P is downgraded below and
remains below "AA-" from S&P or "Aa3" from Moody's, the Master Servicer may
direct the Co-Trustee to terminate the Mortgage Insurance Policy and the
Co-Trustee shall act in accordance with such direction. The Master Servicer
hereby covenants and agrees that it will not direct the Co-Trustee to exercise
its right to terminate the Mortgage Insurance Policy unless the Co-Trustee
obtains a mortgage insurance policy that meets the following conditions (any
such mortgage insurance policy that meets the following conditions, the
"Replacement Mortgage Insurance Policy," and the issuer of such policy, the
"Replacement Mortgage Insurer"): (i) such mortgage insurance policy must be
issued by a mortgage insurer that has a rating with respect to its claims-paying
ability at or above "AA-" from S&P or "Aa3" from Moody's and (ii) such mortgage
insurance policy must cover the Covered Mortgage Loans outstanding as of such
date.

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<PAGE>

                                   ARTICLE V.
                                THE CERTIFICATES

                  Section 5.01. THE CERTIFICATES.

                  The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through A-5, B, C and D. The Certificates shall be
issuable in registered form, in the minimum dollar denominations, integral
dollar multiples in excess thereof and aggregate dollar denominations as set
forth in the following table:

<TABLE>
<CAPTION>
                                                           Integral                            Original
                                                           Multiples                          Certificate
                             Minimum                     in Excess of                          Principal
      Class               Denomination                      Minimum                             Balance
------------------    ----------------------    --------------------------------    --------------------------------
<S>                   <C>                       <C>                                 <C>
       A-1                   $20,000                        $1,000                           $773,500,000
      A-IO                   $20,000                        $1,000                           $  85,00,000(1)
       A-R                  $99.95(2)                         N/A                                    $100
       M-1                   $20,000                        $1,000                            $29,750,000
       M-2                   $20,000                        $1,000                            $25,500,000
       B-1                   $20,000                        $1,000                            $21,250,000
        C                      20%                            1%                            $16,144,218.00
        P                      20%                            1%                                   $100
</TABLE>

(1) Notional amount.
(2) The Tax Matters Person Certificate may be issued in a denomination of $0.05.

                  The Certificates shall be executed by manual or facsimile
signature on behalf of the Trustee by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures were affixed, authorized to sign on behalf of the Trustee
shall bind the Trustee, notwithstanding that such individuals or any of them
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such authentication and
delivery. No Certificate shall be entitled to any benefit under this Agreement,
or be valid for any purpose, unless there appears on such Certificate a
certificate of authentication substantially in the form set forth as attached
hereto executed by the Trustee by manual signature, and such certificate of
authentication upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the written direction of the Depositor, or any affiliate thereof.

                  Section 5.02. CERTIFICATE REGISTER; REGISTRATION OF TRANSFER
                                AND EXCHANGE OF CERTIFICATES.

                  (a) The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.09 hereof, a Certificate Register
for the Trust Fund in which, subject to the provisions of subsections (b) and
(c) below and to such reasonable regulations as it may prescribe, the Trustee
shall provide for the registration of Certificates and of Transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
Transfer of any

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<PAGE>

Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.

                  At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates that the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
registration of Transfer or exchange shall be accompanied by a written
instrument of Transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.

                  No service charge to the Certificateholders shall be made for
any registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.

                  All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.

                  (b) No Transfer of a Private Certificate shall be made unless
such Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a transfer is to be made in reliance upon an exemption
from the Securities Act and such state securities laws, in order to assure
compliance with the Securities Act and such state securities laws, the
Certificateholder desiring to effect such Transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee in writing the facts
surrounding the Transfer in substantially the forms set forth in Exhibit J (the
"Transferor Certificate") and (i) deliver a letter in substantially the form of
either Exhibit K (the "Investment Letter") or Exhibit L (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the
Certificateholder desiring to effect such transfer an Opinion of Counsel that
such Transfer may be made pursuant to an exemption from the Securities Act. The
Depositor shall provide to any Holder of a Private Certificate and any
prospective transferee designated by any such Holder, information regarding the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by Rule
144A. The Trustee, the Co-Trustee and the Master Servicer shall cooperate with
the Depositor in providing the Rule 144A information referenced in the preceding
sentence, including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect such
Transfer shall, and does hereby agree to, indemnify the Trustee, the Co-Trustee,
the Depositor, the Seller and the Master

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<PAGE>

Servicer against any liability that may result if the Transfer is not so exempt
or is not made in accordance with such federal and state laws.

                  No Transfer of an ERISA-Restricted Certificate shall be made
unless the Trustee shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Trustee (in the event such Certificate is a Private
Certificate that is a Definitive Certificate, such requirement is satisfied only
by the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit K or Exhibit L, or in the event such
Certificate is a Class A-R Certificate, such requirement is satisfied only by
the Trustee's receipt of a representation letter from the transferee
substantially in the form of Exhibit I), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA or a
plan or arrangement subject to Section 4975 of the Code, nor a Person acting on
behalf of any such plan or arrangement or using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of the Class M-1, Class
M-2 and Class B-1 Certificates (A) it has acquired and is holding such
Certificate in reliance on the Underwriters' Exemption and that it understands
that there are certain conditions to the availability of the Underwriters'
Exemption, including that the Certificate must be rated, at the time of
purchase, not less than "BBB-" or its equivalent by one of the Rating Agencies
or (B) the purchaser is an insurance company which is purchasing such
Certificates with funds contained in an "insurance company general account" (as
such term is defined in Section V(e) of Prohibited Transaction Class Exemption
95-60 ("PTCE 95-60")) and the conditions of Sections I and III of PTCE 95-60
have been satisfied or (iii) in the case of any ERISA-Restricted Certificate
which is a Class A-R, Class C or Class P Certificate presented for registration
in the name of an employee benefit plan subject to ERISA, or a plan or
arrangement subject to Section 4975 of the Code (or comparable provisions of any
subsequent enactments), or a trustee of any such plan or any other person acting
on behalf of any such plan or arrangement, or using such plan's or arrangement's
assets, an opinion of counsel satisfactory to the Trustee, which opinion of
counsel shall not be an expense of either the Trustee or the Trust Fund,
addressed to the Trustee to the effect that the purchase and holding of such
ERISA-Restricted Certificate is permissible under applicable law, will not
constitute or result in a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code and will not subject the Depositor, the
Seller, the Master Servicer or Trustee to any obligation, or liability
(including liabilities or obligations under ERISA or Section 4975 of the Code)
in addition to those expressly undertaken in this Agreement or to any liability.
For purposes of the preceding sentence, with respect to an ERISA-Restricted
Certificate that is not a Book-Entry Certificate or a Class A-R Certificate, in
the event the representation letter referred to in the preceding sentence is not
so furnished, such representation shall be deemed to have been made to the
Trustee by the transferee's (including an initial acquiror's) acceptance of such
ERISA-Restricted Certificate. Notwithstanding anything else to the contrary
herein, any purported transfer of an ERISA-Restricted Certificate to or on
behalf of an employee benefit plan subject to ERISA or the Code without the
delivery to the Trustee of an opinion of counsel satisfactory to the Trustee as
described above shall be void and of no effect. Any purported beneficial owner
whose acquisition or holding of the Certificate or interest therein was effected
in violation of the conditions described in this paragraph shall indemnify and
hold harmless the Depositor, the Trustee, the Co-Trustee, the Master Servicer,
the Seller, any Subservicer and the

                                      102
<PAGE>

Trust Fund from and against any and all liabilities, claims, costs or expenses
incurred by those parties as a result of that acquisition or holding.

                  To the extent permitted under applicable law (including, but
not limited to, ERISA), the Trustee shall be under no liability to any Person
for any registration of Transfer of any ERISA-Restricted Certificate that is in
fact not permitted by this Section 5.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement so long as the Transfer
was registered by the Trustee in accordance with the foregoing requirements.

                  (c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:

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

                  (ii) No Ownership Interest in a Class A-R Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Class A-R Certificate
         unless, in addition to the representation letters required to be
         delivered to the Trustee under subparagraph (b) above, the Trustee
         shall have been furnished with an affidavit (a "Transfer Affidavit") of
         the initial owner or the proposed transferee in the form attached
         hereto as Exhibit I.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Class A-R Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Class A-R Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer of
         a Class A-R Certificate and (C) not to Transfer its Ownership Interest
         in a Class A-R Certificate or to cause the Transfer of an Ownership
         Interest in a Class A-R Certificate to any other Person if it has
         actual knowledge that such Person is not a Permitted Transferee.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported Transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and this Section 5.02(c) or for making
         any payments due on such Certificate to the Holder thereof or taking
         any other action with respect to such Holder under the provisions of
         this

                                      103
<PAGE>

         Agreement so long as the Transfer was registered after receipt of the
         related Transfer Affidavit, Transferor Certificate and either the Rule
         144A Letter or the Investment Letter. The Trustee shall be entitled but
         not obligated to recover from any Holder of a Class A-R Certificate
         that was in fact not a Permitted Transferee at the time it became a
         Holder or, at such subsequent time as it became other than a Permitted
         Transferee, all payments made on such Class A-R Certificate at and
         after either such time. Any such payments so recovered by the Trustee
         shall be paid and delivered by the Trustee to the last preceding
         Permitted Transferee of such Certificate.

                  (v) The Depositor shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under Section 860E(e)
         of the Code as a result of a Transfer of an Ownership Interest in a
         Class A-R Certificate to any Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class A-R Certificate hereby
consents to any amendment of this Agreement that, based on an Opinion of Counsel
furnished to the Trustee, is reasonably necessary (a) to ensure that the record
ownership of, or any beneficial interest in, a Class A-R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class A-R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.

                  (d) The preparation and delivery of all representation letters
and opinions referred to above in this Section 5.02 in connection with any
Transfers shall be at the expense of the parties to such Transfers.

                  Section 5.03. MUTILATED, DESTROYED, LOST OR STOLEN
                                CERTIFICATES.

                  If (a) any mutilated Certificate is surrendered to the
Trustee, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof and
(b) there is delivered to the Master Servicer and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Trustee that such Certificate has been acquired by a
bona fide purchaser, the Trustee shall execute, authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like Class, tenor and Percentage Interest. In
connection with the issuance of any new Certificate under this Section 5.03, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the

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<PAGE>

Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. All Certificates
surrendered to the Trustee under the terms of this Section 5.03 shall be
canceled and destroyed by the Trustee in accordance with its standard procedures
without liability on its part.

                  Section 5.04. PERSONS DEEMED OWNERS.

                  The Master Servicer, the Trustee and any agent of the Master
Servicer or the Trustee may treat the person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Master Servicer, the Trustee nor any agent of the
Master Servicer or the Trustee shall be affected by any notice to the contrary.

                  Section 5.05. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
                                ADDRESSES.

                  If three or more Certificateholders (a) request such
information in writing from the Trustee, (b) state that such Certificateholders
desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or Master Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.

                  Section 5.06. BOOK-ENTRY CERTIFICATES.

                  The Regular Certificates, upon original issuance, shall be
issued in the form of one or more typewritten Certificates representing the
Book-Entry Certificates, to be delivered to the Depository by or on behalf of
the Depositor. Such Certificates shall initially be registered on the
Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of such Certificates will receive a definitive certificate
representing such Certificate Owner's interest in such Certificates, except as
provided in Section 5.08. Unless and until definitive, fully registered
Certificates ("Definitive Certificates") have been issued to the Certificate
Owners of such Certificates pursuant to Section 5.08:

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

                  (b) the Depositor, the Seller, the Master Servicer and the
Trustee may deal with the Depository and the Depository Participants for all
purposes (including the making of

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<PAGE>

distributions) as the authorized representative of the respective Certificate
Owners of such Certificates;

                  (c) registration of the Book-Entry Certificates may not be
transferred by the Trustee except to another Depository;

                  (d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 5.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;

                  (e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;

                  (f) the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
Depository Participants; and

                  (g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.

                  For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.

                  Section 5.07. NOTICES TO DEPOSITORY.

                  Whenever any notice or other communication is required to be
given to Certificateholders of the Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Trustee shall give all
such notices and communications to the Depository.

                  Section 5.08. DEFINITIVE CERTIFICATES.

                  If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Trustee or the Depositor is unable to locate a qualified
successor, (b) the Depositor, at its sole option, advises the Trustee that it
elects to terminate the book-entry system with respect to such Certificates
through the Depository or (c) after the occurrence and continuation of an Event
of Default, Certificate Owners of such Book-Entry Certificates having not less
than 51% of the

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<PAGE>

Voting Rights evidenced by any Class of Book-Entry Certificates advise the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Trustee shall notify
all Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to Certificate Owners of such Class requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall
authenticate and deliver such Definitive Certificates. Neither the Depositor nor
the Trustee shall be liable for any delay in delivery of such instructions and
each may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of such Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.

                  Section 5.09. MAINTENANCE OF OFFICE OR AGENCY.

                  The Trustee will maintain or cause to be maintained at its
expense an office or offices or agency or agencies in New York City where
Certificates may be surrendered for registration of transfer or exchange. The
Trustee initially designates its offices at 101 Barclay Street, New York, New
York 10286, Attention: Corporate Trust MBS Administration, as offices for such
purposes. The Trustee will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.

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                                  ARTICLE VI.

                THE DEPOSITOR, THE MASTER SERVICER AND THE SELLER

                  Section 6.01. RESPECTIVE LIABILITIES OF THE DEPOSITOR, THE
                                MASTER SERVICER AND THE SELLER.

                  The Depositor, the Master Servicer and the Seller shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.

                  Section 6.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE
                                MASTER SERVICER OR THE SELLER.

                  Each of the Depositor and the Seller will keep in full effect
its existence, rights and franchises as a corporation under the laws of the
United States or under the laws of one of the states thereof and will each
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. The Master
Servicer will keep in effect its existence, rights and franchises as a limited
partnership under the laws of the United States or under the laws of one of the
states thereof and will obtain and preserve its qualification or registration to
do business as a foreign partnership in each jurisdiction in which such
qualification or registration 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 Depositor, the Master Servicer or
the Seller may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or the
Seller shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or the Seller, shall be the successor of the
Depositor, the Master Servicer or the Seller, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided that the successor or surviving Person to the Master Servicer shall be
qualified to service mortgage loans on behalf of Fannie Mae or Freddie Mac.

                  Section 6.03. LIMITATION ON LIABILITY OF THE DEPOSITOR, THE
                                SELLER, THE MASTER SERVICER AND OTHERS.

                  None of the Depositor, the Seller, the Master Servicer or any
of the directors, officers, employees or agents of the Depositor, the Seller or
the Master Servicer shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided that this provision shall not protect the Depositor, the Seller, the
Master Servicer or any such Person against any breach of representations or
warranties made by it herein or protect the

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Depositor, the Seller, the Master Servicer or any such Person from any liability
that would otherwise be imposed by reasons of willful misfeasance, bad faith or
gross negligence in the performance of duties or by reason of reckless disregard
of obligations and duties hereunder. The Depositor, the Seller, the Master
Servicer and any director, officer, employee or agent of the Depositor, the
Seller or the Master Servicer may rely in good faith on any document of any kind
PRIMA FACIE properly executed and submitted by any Person respecting any matters
arising hereunder. The Depositor, the Seller, the Master Servicer and any
director, officer, employee or agent of the Depositor, the Seller or the Master
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder. None of the Depositor, the Seller or the Master Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided that any of the Depositor, the
Seller or the Master Servicer may, in its discretion undertake any such action
that it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Seller and the Master
Servicer shall be entitled to be reimbursed therefor out of the Certificate
Account as provided by Section 3.08 hereof.

                  Section 6.04. LIMITATION ON RESIGNATION OF MASTER SERVICER.

                  The Master Servicer shall not resign from the obligations and
duties hereby imposed on it except upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
shall become effective until the Trustee or a successor servicer to such
appointment shall have assumed the Master Servicer's responsibilities, duties,
liabilities and obligations hereunder.

                  Section 6.05. ERRORS AND OMISSIONS INSURANCE; FIDELITY BONDS.

                  The Master Servicer shall, for so long as it acts as servicer
under this Agreement, obtain and maintain in force (a) a policy or policies of
insurance covering errors and omissions in the performance of its obligations as
servicer hereunder, and (b) a fidelity bond in respect of its officers,
employees and agents. Each such policy or policies and bond shall, together,
comply with the requirements from time to time of Fannie Mae or Freddie Mac for
persons performing servicing for mortgage loans purchased by Fannie Mae or
Freddie Mac. In the event that any such policy or bond ceases to be in effect,
the Master Servicer shall use its reasonable best efforts

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to obtain a comparable replacement policy or bond from an insurer or issuer,
meeting the requirements set forth above as of the date of such replacement.

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                                  ARTICLE VII.

                     DEFAULT; TERMINATION OF MASTER SERVICER

                  Section 7.01. EVENTS OF DEFAULT.

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

                  (i) any failure by the Master Servicer to deposit in the
         Certificate Account or the Distribution Account or remit to the Trustee
         any payment (excluding a payment required to be made under Section 4.01
         hereof) required to be made under the terms of this Agreement, which
         failure shall continue unremedied for five calendar days and, with
         respect to a payment required to be made under Section 4.01 hereof, for
         one calendar day, after the date on which written notice of such
         failure shall have been given to the Master Servicer by the Trustee,
         the Seller or the Depositor, or to the Trustee and the Master Servicer
         by the Holders of Certificates evidencing not less than 25% of the
         Voting Rights evidenced by the Certificates; or

                  (ii) any failure by the Master Servicer to observe or perform
         in any material respect any other of the covenants or agreements on the
         part of the Master Servicer contained in this Agreement or any
         representation or warranty shall prove to be untrue, which failure or
         breach shall continue unremedied for a period of 60 days after the date
         on which written notice of such failure shall have been given to the
         Master Servicer by the Trustee or the Depositor, or to the Trustee by
         the Holders of Certificates evidencing not less than 25% of the Voting
         Rights evidenced by the Certificates; provided that the sixty-day cure
         period shall not apply to the initial delivery of the Mortgage File for
         Delay Delivery Mortgage Loans nor the failure to repurchase or
         substitute in lieu thereof; or

                  (iii) a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises for the appointment of a
         receiver or liquidator in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings, or for
         the winding-up or liquidation of its affairs, shall have been entered
         against the Master Servicer and such decree or order shall have
         remained in force undischarged or unstayed for a period of 60
         consecutive days; or

                  (iv) the Master Servicer shall consent to the appointment of a
         receiver or liquidator in any insolvency, readjustment of debt,
         marshalling of assets and liabilities or similar proceedings of or
         relating to the Master Servicer or all or substantially all of the
         property of the Master Servicer; or

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

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                  If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee shall, but only at the direction of the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates,
by notice in writing to the Master Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder. On or after the receipt by the
Master Servicer of such written notice, all authority and power of the Master
Servicer hereunder, whether with respect to the Mortgage Loans or otherwise,
shall pass to and be vested in the Trustee. The Trustee shall thereupon make any
Advance described in Section 4.01 hereof subject to Section 3.04 hereof. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Master Servicer, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Master Servicer
to pay amounts owed pursuant to Article VIII. The Master Servicer agrees to
cooperate with the Trustee in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer to the Trustee of all cash amounts which shall at the time be credited
to the Certificate Account, or thereafter be received with respect to the
Mortgage Loans. The Trustee shall promptly notify the Rating Agencies of the
occurrence of an Event of Default.

                  Notwithstanding any termination of the activities of a Master
Servicer hereunder, such Master Servicer shall be entitled to receive, out of
any late collection of a Scheduled Payment on a Mortgage Loan that was due prior
to the notice terminating such Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which such Master Servicer would have been entitled pursuant to Sections
3.08(a)(i) through (viii), and any other amounts payable to such Master Servicer
hereunder the entitlement to which arose prior to the termination of its
activities hereunder.

                  Section 7.02. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

                  On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 hereof, the Trustee shall, to the extent
provided in Section 3.04, be the successor to the Master Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof and applicable law including the obligation to make advances
pursuant to Section 4.01. As compensation therefor, the Trustee shall be
entitled to all fees, costs and expenses relating to the Mortgage Loans that the
Master Servicer would have been entitled to if the Master Servicer had continued
to act hereunder. Notwithstanding the foregoing, if the Trustee has become the
successor to the Master Servicer in accordance with Section 7.01 hereof, the
Trustee may, if it shall be unwilling to so act, or shall, if it is prohibited
by applicable law from making Advances pursuant to Section 4.01 hereof or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the

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appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Any successor Master Servicer
shall be an institution that is a Fannie Mae and Freddie Mac approved
seller/servicer in good standing, that has been approved by the Mortgage
Insurer, that has a net worth of at least $15,000,000, and that is willing to
service the Mortgage Loans and executes and delivers to the Depositor and the
Trustee an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than liabilities of
the Master Servicer under Section 6.03 hereof incurred prior to termination of
the Master Servicer under Section 7.01), with like effect as if originally named
as a party to this Agreement; and provided further that each Rating Agency
acknowledges that its rating of the Certificates in effect immediately prior to
such assignment and delegation will not be qualified or reduced as a result of
such assignment and delegation. No appointment of a successor to the Master
Servicer hereunder shall be effective until the Trustee shall have consented
thereto, and written notice of such proposed appointment shall have been
provided by the Trustee to each Certificateholder. The Trustee shall not resign
as servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.04 hereof, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree; provided that no such
compensation shall be in excess of that permitted the Master Servicer hereunder.
The Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. Neither the
Trustee nor any other successor servicer shall be deemed to be in default
hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any delay
in delivering or providing, any cash, information, documents or records to it.

                  Any successor to the Master Servicer as servicer shall give
notice to the Mortgagors of such change of servicer and shall, during the term
of its service as servicer maintain in force the policy or policies that the
Master Servicer is required to maintain pursuant to Section 6.05.

                  In connection with the termination or resignation of the
Master Servicer hereunder, either (i) the successor Master Servicer, including
the Trustee if the Trustee is acting as successor Master Servicer, shall
represent and warrant that it is a member of MERS in good standing and shall
agree to comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered with
MERS, or (ii) the predecessor Master Servicer shall cooperate with the successor
Master Servicer in causing MERS to execute and deliver an assignment of Mortgage
in recordable form to transfer the Mortgage from MERS to the Trustee and to
execute and deliver such other notices, documents and other instruments as may
be necessary or desirable to effect a transfer of such

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Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.

                  Section 7.03. NOTIFICATION TO CERTIFICATEHOLDERS.

                  (a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.

                  (b) Within 60 days after the occurrence of any Event of
Default, the Trustee shall transmit by mail to all Certificateholders notice of
each such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.

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                                 ARTICLE VIII.

                    CONCERNING THE TRUSTEE AND THE CO-TRUSTEE

                  Section 8.01. DUTIES OF TRUSTEE.

                  The Trustee, prior to the occurrence of an Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred and remains
uncured, the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.

                  The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee (or the Co-Trustee, to the extent provided in this Agreement)
that are specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether they conform to the
requirements of this Agreement, to the extent provided in this Agreement. If any
such instrument is found not to conform to the requirements of this Agreement in
a material manner, the Trustee shall take action as it deems appropriate to have
the instrument corrected.

                  No provision of this Agreement shall be construed to relieve
the Trustee from liability for its own grossly negligent action, its own gross
negligent failure to act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or any liability that
would be imposed by reason of its willful misfeasance or bad faith; provided
that:

                  (i) prior to the occurrence of an Event of Default, and after
         the curing of all such Events of Default that may have occurred, the
         duties and obligations of the Trustee shall be determined solely by the
         express provisions of this Agreement, the Trustee shall not be liable,
         individually or as Trustee, except for the performance of such duties
         and obligations as are specifically set forth in this Agreement, no
         implied covenants or obligations shall be read into this Agreement
         against the Trustee and the Trustee may conclusively rely, as to the
         truth of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Agreement that it reasonably
         believed in good faith to be genuine and to have been duly executed by
         the proper authorities respecting any matters arising hereunder;

                  (ii) the Trustee shall not be liable, individually or as
         Trustee, for an error of judgment made in good faith by a Responsible
         Officer or Responsible Officers of the Trustee, unless the Trustee was
         grossly negligent or acted in bad faith or with willful misfeasance;
         and

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                  (iii) the Trustee shall not be liable, individually or as
         Trustee, with respect to any action taken, suffered or omitted to be
         taken by it in good faith in accordance with the direction of Holders
         of each Class of Certificates evidencing not less than 25% of the
         Voting Rights of such Class relating to the time, method and place of
         conducting any proceeding for any remedy available to the Trustee, or
         exercising any trust or power conferred upon the Trustee under this
         Agreement.

                  Section 8.02. CERTAIN MATTERS AFFECTING THE TRUSTEE.

                  (a) Except as otherwise provided in Section 8.01:

                  (i) the Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officer's Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document believed by
         it to be genuine and to have been signed or presented by the proper
         party or parties;

                  (ii) the Trustee may consult with counsel and any Opinion of
         Counsel shall be full and complete authorization and protection in
         respect of any action taken or suffered or omitted by it hereunder in
         good faith and in accordance with such Opinion of Counsel;

                  (iii) the Trustee shall not be liable, individually or as
         Trustee, for any action taken, suffered or omitted by it in good faith
         and believed by it to be authorized or within the discretion or rights
         or powers conferred upon it by this Agreement;

                  (iv) prior to the occurrence of an Event of Default hereunder
         and after the curing of all Events of Default that may have occurred,
         the Trustee shall not be bound to make any investigation into the facts
         or matters stated in any resolution, certificate, statement,
         instrument, opinion, report, notice, request, consent, order, approval,
         bond or other paper or document, unless requested in writing so to do
         by Holders of each Class of Certificates evidencing not less than 25%
         of the Voting Rights of such Class;

                  (v) the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents, accountants or attorneys;

                  (vi) the Trustee shall not be required to expend its own funds
         or otherwise incur any financial liability in the performance of any of
         its duties hereunder if it shall have reasonable grounds for believing
         that repayment of such funds or adequate indemnity against such
         liability is not assured to it;

                  (vii) the Trustee shall not be liable, individually or as
         Trustee, for any loss on any investment of funds pursuant to this
         Agreement (other than in its commercial capacity as issuer of the
         investment security);

                  (viii) the Trustee shall not be deemed to have knowledge of an
         Event of Default until a Responsible Officer of the Trustee shall have
         received written notice thereof; and

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                  (ix) the Trustee shall be under no obligation to exercise any
         of the trusts or powers vested in it by this Agreement or to make any
         investigation of matters arising hereunder or to institute, conduct or
         defend any litigation hereunder or in relation hereto at the request,
         order or direction of any of the Certificateholders, pursuant to the
         provisions of this Agreement, unless such Certificateholders shall have
         offered to the Trustee reasonable security or indemnity against the
         costs, expenses and liabilities that may be incurred therein or
         thereby.

                  (b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by the Trustee
without the possession of any of the Certificates, or the production thereof at
the trial or other proceeding relating thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name for the
benefit of all the Holders of the Certificates, subject to the provisions of
this Agreement.

                  Section 8.03. TRUSTEE NOT LIABLE FOR MORTGAGE LOANS.

                  The recitals contained herein shall be taken as the statements
of the Depositor or the Master Servicer, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Trustee's execution and authentication of the Certificates.
The Trustee shall not be accountable for the use or application by the Depositor
or the Master Servicer of any funds paid to the Depositor or the Master Servicer
in respect of the Mortgage Loans or deposited in or withdrawn from the
Certificate Account by the Depositor or the Master Servicer.

                  Section 8.04. TRUSTEE MAY OWN CERTIFICATES.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.

                  Section 8.05. MASTER SERVICER TO PAY TRUSTEE'S FEES AND
                                EXPENSES.

                  The Master Servicer covenants and agrees to pay or reimburse
the Trustee, upon its request, for all reasonable expenses, disbursements and
advances incurred or made by the Trustee on behalf of the Trust Fund in
accordance with any of the provisions of this Agreement (including, without
limitation: (A) the reasonable compensation and the expenses and disbursements
of its counsel, but only for representation of the Trustee acting in its
capacity as Trustee hereunder and (B) to the extent that the Trustee must engage
persons not regularly in its employ to perform acts or services on behalf of the
Trust Fund, which acts or services are not in the ordinary course of the duties
of a trustee, paying agent or certificate registrar, in the absence of a breach
or default by any party hereto, the reasonable compensation, expenses and
disbursements of such persons, except any such expense, disbursement or advance
as may arise from its negligence, bad faith or willful misconduct). The Trustee
and any director, officer, employee or agent of the Trustee shall be indemnified
by the Master Servicer and held harmless

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against any loss, liability or expense (i) incurred in connection with any legal
action relating to this Agreement or the Certificates, or in connection with the
performance of any of the Trustee's duties hereunder, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of any of the Trustee's duties hereunder or by
reason of reckless disregard of the Trustee's obligations and duties hereunder
and (ii) resulting from any error in any tax or information return prepared by
the Master Servicer. Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee hereunder.

                  Section 8.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.

                  The Trustee hereunder shall, at all times, be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating that would not cause any of the Rating Agencies to reduce their
respective ratings of any Class of Certificates below the ratings issued on the
Closing Date (or having provided such security from time to time as is
sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.06, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.07 hereof. The corporation or
national banking association serving as Trustee may have normal banking and
trust relationships with the Depositor, the Seller and the Master Servicer and
their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.

                  Section 8.07. RESIGNATION AND REMOVAL OF TRUSTEE.

                  The Trustee may at any time resign and be discharged from the
trusts hereby created by (1) giving written notice of resignation to the
Depositor and the Master Servicer and by mailing notice of resignation by first
class mail, postage prepaid, to the Certificateholders at their addresses
appearing on the Certificate Register and each Rating Agency, not less than 60
days before the date specified in such notice when, subject to Section 8.08,
such resignation is to take effect, and (2) acceptance of appointment by a
successor trustee in accordance with Section 8.08 and meeting the qualifications
set forth in Section 8.06. If no successor trustee shall have been so appointed
and have accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.

                  If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 hereof and shall fail to resign
after written request thereto by the

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Depositor, (ii) the Trustee shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or (iii)(A) a tax is imposed with respect to the
Trust Fund by any state in which the Trustee or the Trust Fund is located, (B)
the imposition of such tax would be avoided by the appointment of a different
trustee and (C) the Trustee fails to indemnify the Trust Fund against such tax,
then the Depositor or the Master Servicer may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which
instrument shall be delivered to the Trustee, one copy of which shall be
delivered to the Master Servicer and one copy of which shall be delivered to the
successor trustee.

                  The Holders evidencing at least 51% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which instruments shall be delivered by the successor Trustee to the Master
Servicer one complete set to the Trustee so removed and one complete set to the
successor so appointed. Notice of any removal of the Trustee shall be given to
each Rating Agency by the Successor Trustee.

                  Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.07 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.08 hereof.

                  Section 8.08. SUCCESSOR TRUSTEE.

                  Any successor trustee appointed as provided in Section 8.07
hereof shall execute, acknowledge and deliver to the Depositor, its predecessor
trustee and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein.

                  No successor trustee shall accept appointment as provided in
this Section 8.08 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section 8.06 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.

                  Upon acceptance of appointment by a successor trustee as
provided in this Section 8.08, the Depositor shall mail notice of the succession
of such trustee hereunder to all Holders of Certificates. If the Depositor fails
to mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Depositor.

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                  Section 8.09. MERGER OR CONSOLIDATION OF TRUSTEE.

                  Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be eligible under the provisions of Section
8.06 hereof without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.

                  Section 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.

                  Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 8.10, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
8.06 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 8.08.

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

                  (i) All rights, powers, duties and obligations conferred or
         imposed upon the Trustee, except for the obligation of the Trustee
         under this Agreement to advance funds on behalf of the Master Servicer,
         shall be conferred or imposed upon and exercised or performed by the
         Trustee and such separate trustee or co-trustee jointly (it being
         understood that such separate trustee or co-trustee is not authorized
         to act separately without the Trustee joining in such act), except to
         the extent that under any law of any jurisdiction in which any
         particular act or acts are to be performed (whether as Trustee
         hereunder or as successor to the Master Servicer hereunder), the
         Trustee shall be incompetent or unqualified to perform such act or
         acts, in which event such rights, powers, duties and obligations
         (including the holding of title to the Trust Fund or any portion
         thereof in any such jurisdiction) shall be exercised and performed
         singly by such separate trustee or co-trustee, but solely at the
         direction of the Trustee;

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                  (ii) No trustee hereunder shall be held personally liable by
         reason of any act or omission of any other trustee hereunder; and

                  (iii) The Trustee may at any time accept the resignation of or
         remove any separate trustee or co-trustee.

                  Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Master Servicer and the Depositor.

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

                  Section 8.11. TAX MATTERS.

                  It is intended that the Trust Fund shall constitute, and that
the affairs of the Trust Fund shall be conducted so that each of REMIC I, REMIC
II and REMIC III will qualify as, a "real estate mortgage investment conduit" as
defined in and in accordance with the REMIC Provisions. In furtherance of such
intention, the Trustee covenants and agrees that it shall act as agent (and the
Trustee is hereby appointed to act as agent) on behalf of the Trust Fund and
that in such capacity it shall: (a) prepare and file, or cause to be prepared
and filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit
Income Tax Returns (Form 1066 or any successor form adopted by the Internal
Revenue Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each REMIC
created hereunder containing such information and at the times and in the manner
as may be required by the Code or state or local tax laws, regulations, or
rules, and furnish or cause to be furnished to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby; (b) within thirty days of the Closing Date, furnish or cause to be
furnished to the Internal Revenue Service, on Forms 8811 or as otherwise may be
required by the Code, the name, title, address, and telephone number of the
person that the holders of the Certificates may contact for tax information
relating thereto, together with such additional information as may be required
by such Form, and update such information at the time or times in the manner
required by the Code for the Trust Fund; (c) make or cause to be made elections,

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on behalf of each REMIC created hereunder to be treated as a REMIC on the
federal tax return of each such REMIC for its first taxable year (and, if
necessary, under applicable state law); (d) prepare and forward, or cause to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) provide information necessary for
the computation of tax imposed on the transfer of a Class A-R Certificate to a
Person that is not a Permitted Transferee, or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax); (f) to the extent that they are under its
control conduct the affairs of the Trust Fund at all times that any Certificates
are outstanding so as to maintain the status of each REMIC created hereunder as
a REMIC under the REMIC Provisions; (g) not knowingly or intentionally take any
action or omit to take any action that would cause the termination of the REMIC
status of any REMIC created hereunder; (h) pay, from the sources specified in
the last paragraph of this Section 8.11, the amount of any federal, state and
local taxes, including prohibited transaction taxes as described below, imposed
on any REMIC created hereunder prior to the termination of the Trust Fund when
and as the same shall be due and payable (but such obligation shall not prevent
the Trustee or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Trustee from withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings); (i) sign or cause to be signed federal, state or local income tax
or information returns; (j) maintain records relating to each REMIC created
hereunder, including but not limited to the income, expenses, assets and
liabilities of each such REMIC, and the fair market value and adjusted basis of
the Trust Fund property determined at such intervals as may be required by the
Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and (k) as and when necessary and appropriate,
represent the Trust Fund in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any REMIC created hereunder,
enter into settlement agreements with any governmental taxing agency, extend any
statute of limitations relating to any tax item of the Trust Fund, and otherwise
act on behalf of any REMIC created hereunder in relation to any tax matter
involving any such REMIC.

                  In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within 10 days after the Closing Date all information or data that the
Trustee requests in writing and determines to be relevant for tax purposes to
the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee promptly upon written request therefor, any such additional
information or data that the Trustee may, from time to time, request in order to
enable the Trustee to perform its duties as set forth herein. The Depositor
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors, omissions or miscalculations of
the Trustee that result

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from any failure of the Depositor to provide, or to cause to be provided,
accurate information or data to the Trustee on a timely basis.

                  In the event that any tax is imposed on "prohibited
transactions" of the Trust Fund as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contribution to the Trust Fund after the
startup day pursuant to Section 860G(d) of the Code, or any other tax is
imposed, including, without limitation, any federal, state or local tax or
minimum tax imposed upon the Trust Fund pursuant to Sections 23153 and 24872 of
the California Revenue and Taxation Code if not paid as otherwise provided for
herein, such tax shall be paid by (i) the Trustee, if any such other tax arises
out of or results from a breach by the Trustee of any of its obligations under
this Agreement, (ii) (x) the Master Servicer, in the case of any such minimum
tax, and (y) any party hereto (other than the Trustee) to the extent any such
other tax arises out of or results from a breach by such other party of any of
its obligations under this Agreement or (iii) in all other cases, or in the
event that any liable party here fails to honor its obligations under the
preceding clauses (i) or (ii), any such tax will be paid first with amounts
otherwise to be distributed to the Class A-R Certificateholders , and second
with amounts otherwise to be distributed to all other Certificateholders in the
following order of priority: first, to the Class B-1 Certificates (pro rata),
second, to the Class M-2 Certificates (pro rata), third, to the Class M-1
Certificates (pro rata), and fourth, to the Class A-1 Certificates (pro rata).
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Class A-R Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holders of the Class A-R
Certificates (and, if necessary, second, from the Holders of the all other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
The Trustee agrees to promptly notify in writing the party liable for any such
tax of the amount thereof and the due date for the payment thereof.

                  The Trustee shall treat the rights of the Class A-1, Class
M-1, Class M-2 and Class B-1 Certificateholders to receive payments from the
Carryover Reserve Fund as rights in an interest rate cap contract written by the
Cap Contract Counterparty with respect to the Net Rate Carryover funded by the
Cap Contract and Excess Cashflow, in favor of the Certificateholders (other than
the Holders of the Class A-IO, Class A-R, Class C and Class P Certificates).
Thus, each Certificate (other than the Class A-IO, Class A-R, Class C and Class
P Certificates) shall be treated as representing ownership of not only REMIC III
Regular Interests, but also ownership of an interest in an interest rate cap
contract. For purposes of determining the issue price of the REMIC III Regular
Interests, the Trustee shall assume that the interest rate cap contract has a
value of $2,125,000.

                  Section 8.12. CO-TRUSTEE.

                  (a) The Co-Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Co-Trustee that are specifically required to be
furnished pursuant to any provision of this Agreement shall examine them to
determine whether they conform to the requirements of this Agreement, to the
extent required by this Agreement. If any such instrument is found not to
conform to the requirements

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of this Agreement in a material manner, the Co-Trustee shall take action as it
deems appropriate to have the instrument corrected. In addition, the Co-Trustee
shall act as the insured under the Mortgage Insurance Policy and hereby directs
the Master Servicer, on behalf of the Co-Trustee, to take all actions
appropriate or required of the Co-Trustee under the Mortgage Insurance Policy,
other than the payment of the Mortgage Insurance Premium and obtaining the
approval of the Mortgage Insurer with respect to the appointment of a successor
servicer.

                  (b) No provision of this Agreement shall be construed to
relieve the Co-Trustee from liability for its own grossly negligent action, its
own gross negligent failure to act or its own misconduct, its grossly negligent
failure to perform its obligations in compliance with this Agreement, or any
liability that would be imposed by reason of its willful misfeasance or bad
faith; provided that:

                  (i) the duties and obligations of the Co-Trustee shall be
         determined solely by the express provisions of this Agreement with the
         exception of Section 8.10, the Co-Trustee shall not be liable,
         individually or as Co-Trustee, except for the performance of such
         duties and obligations as are specifically set forth in this Agreement,
         no implied covenants or obligations shall be read into this Agreement
         against the Co-Trustee and the Co-Trustee may conclusively rely, as to
         the truth of the statements and the correctness of the opinions
         expressed therein, upon any certificates or opinions furnished to the
         Co-Trustee and conforming to the requirements of this Agreement that it
         reasonably believed in good faith to be genuine and to have been duly
         executed by the proper authorities respecting any matters arising
         hereunder; and

                  (ii) the Co-Trustee shall not be liable, individually or as
         Co-Trustee, for an error of judgment made in good faith by a
         Responsible Officer or Responsible Officers of the Trustee, unless the
         Co-Trustee was grossly negligent or acted in bad faith or with willful
         misfeasance.

                  (c) Except as otherwise provided in paragraph (b) above:

                  (i) the Co-Trustee may request and rely upon and shall be
         protected in acting or refraining from acting upon any resolution,
         Officer's Certificate, certificate of auditors or any other
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, appraisal, bond or other paper or document believed by
         it to be genuine and to have been signed or presented by the proper
         party or parties;

                  (ii) the Co-Trustee may consult with counsel and any Opinion
         of Counsel shall be full and complete authorization and protection in
         respect of any action taken or suffered or omitted by it hereunder in
         good faith and in accordance with such Opinion of Counsel;

                  (iii) the Co-Trustee shall not be liable, individually or as
         Co-Trustee, for any action taken, suffered or omitted by it in good
         faith and believed by it to be authorized or within the discretion or
         rights or powers conferred upon it by this Agreement;

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                  (iv) the Co-Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         consent, order, approval, bond or other paper or document;

                  (v) the Co-Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents, accountants or attorneys; and

                  (vi) the Co-Trustee shall not be required to expend its own
         funds or otherwise incur any financial liability in the performance of
         any of its duties hereunder if it shall have reasonable grounds for
         believing that repayment of such funds or adequate indemnity against
         such liability is not assured to it.

                  (d) The recitals contained herein shall be taken as the
statements of the Depositor or the Master Servicer, as the case may be, and the
Co-Trustee assumes no responsibility for their correctness. The Co-Trustee makes
no representations as to the validity or sufficiency of this Agreement or of any
Mortgage Loan or related document or of MERS or the MERS(R) System other than
with respect to the Co-Trustee's execution and authentication of the
Certificates. The Co-Trustee shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Certificate Account by the Depositor or the Master Servicer.

                  (e) The Co-Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates with the same rights as it would
have if it were not the Co-Trustee.

                  (f) The Master Servicer covenants and agrees (i) to pay to the
Co-Trustee from time to time, and the Co-Trustee shall be entitled to, such
compensation as shall be agreed in writing by the Master Servicer and the
Co-Trustee (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Co-Trustee and (ii)
to pay or reimburse the Co-Trustee, upon its request, for all reasonable
expenses, disbursements and advances incurred or made by the Co-Trustee on
behalf of the Trust Fund in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation of
the Co-Trustee acting in its capacity as Co-Trustee hereunder and (B) to the
extent that the Co-Trustee must engage persons not regularly in its employ to
perform acts or services on behalf of the Trust Fund, which acts or services are
not in the ordinary course of the duties of a trustee, paying agent or
certificate registrar, in the absence of a breach or default by any party
hereto, the reasonable compensation, expenses and disbursements of such persons,
except any such expense, disbursement or advance as may arise from its
negligence, bad faith or willful misconduct). The Co-Trustee and any director,
officer, employee or agent of the Co-Trustee shall be indemnified by the Master
Servicer and held harmless against any loss, liability or expense (i) incurred
in connection with any legal action relating to this Agreement or the
Certificates, or in connection with the performance of any of the Co-Trustee's
duties hereunder, other than any loss, liability or expense

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incurred by reason of willful misfeasance, bad faith or negligence in the
performance of any of the Co-Trustee's duties hereunder or by reason of reckless
disregard of the Co-Trustee's obligations and duties hereunder and (ii)
resulting from any error in any tax or information return prepared by the Master
Servicer. Such indemnity shall survive the termination of this Agreement or the
resignation or removal of the Co-Trustee hereunder.

                  (g) The Co-Trustee hereunder shall, at all times, be a
corporation or association organized and doing business under the laws of a
state or the United States of America, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by federal or state authority
and with a credit rating that would not cause any of the Rating Agencies to
reduce their respective ratings of any Class of Certificates below the ratings
issued on the Closing Date (or having provided such security from time to time
as is sufficient to avoid such reduction). If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.12 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Co-Trustee shall cease to be eligible in accordance with
the provisions of this Section 8.12, the Co-Trustee shall resign immediately in
the manner and with the effect specified in paragraph (h) below. The corporation
or national banking association serving as Co-Trustee may have normal banking
and trust relationships with the Depositor, the Seller and the Master Servicer
and their respective affiliates; provided that such corporation cannot be an
affiliate of the Master Servicer other than the Trustee in its role as successor
to the Master Servicer.

                  (h) The Co-Trustee may at any time resign and be discharged
from the trusts hereby created by giving 30 days prior written notice of
resignation to the Trustee, the Depositor and the Master Servicer. Upon such
resignation the Trustee (x) may appoint a successor Co-Trustee meeting the
requirements in paragraph (g) above and acceptable to the Master Servicer (in
its sole discretion), so long as such Co-Trustee executes and delivers to the
other parties hereto an instrument agreeing to be bound by the provisions of
this Agreement or (y) may if permitted by the Master Servicer (in its sole
discretion) assume the rights and duties of the resigning Co-Trustee so long as
the Trustee executes and delivers an instrument to that effect.

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                                  ARTICLE IX.

                                   TERMINATION

                  Section 9.01. TERMINATION UPON LIQUIDATION OR REPURCHASE OF
                                ALL MORTGAGE LOANS.

         Subject to Section 9.03, the Trust Fund shall terminate and the
obligations and responsibilities of the Depositor, the Master Servicer, the
Seller and the Trustee created hereby shall terminate upon the earlier of (a)
the purchase by the Master Servicer of all of the Mortgage Loans (and REO
Properties) remaining in the Trust Fund at the price equal to the sum of (i)
100% of the Stated Principal Balance of each Mortgage Loan in the Trust Fund
(other than in respect of REO Property), (ii) accrued interest thereon at the
applicable Mortgage Rate (or, if such repurchase is effected by the Master
Servicer, at the applicable Net Mortgage Rate), (iii) the appraised value of any
REO Property in the Trust Fund (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Master Servicer and the Trustee and (iv) any unreimbursed
Servicing Advances, and the principal portion of any unreimbursed Advances, made
on the Mortgage Loans prior to the exercise of such repurchase and (b) the later
of (i) the maturity or other liquidation (or any Advance with respect thereto)
of the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (ii) the distribution to related Certificateholders of all
amounts required to be distributed to them pursuant to this Agreement, as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of 21 years from the death of the last survivor of
the descendants of Joseph P. Kennedy, the late Ambassador of the United States
to the Court of St. James's, living on the date hereof and (ii) the Latest
Possible Maturity Date.

         The right to purchase all Mortgage Loans and REO Properties by the
Master Servicer (the party exercising such purchase option, the "Terminator")
pursuant to clause (a) above shall be conditioned upon the Stated Principal
Balance of the Mortgage Loans, at the time of any such repurchase, aggregating
ten percent (10%) or less of the Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

                  Section 9.02. FINAL DISTRIBUTION ON THE CERTIFICATES.

                  If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Trust Fund other than the funds in the Certificate Account, the
Master Servicer shall direct the Trustee to send a final distribution notice
promptly to each Certificateholder or (ii) the Trustee determines that a Class
of Certificates shall be retired after a final distribution on such Class, the
Trustee shall notify the related Certificateholders within five (5) Business
Days after such Determination Date that the final distribution in retirement of
such Class of Certificates is scheduled to be made on the immediately following
Distribution Date. Any final distribution made pursuant to the immediately
preceding sentence will be made only upon presentation and surrender of the
related Certificates at the Corporate Trust Office of the Trustee. If the Master
Servicer elects to

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terminate the Trust Fund pursuant to clause (a) of Section 9.01, at least 20
days prior to the date notice is to be mailed to the Certificateholders, such
electing party shall notify the Depositor and the Trustee of the date such
electing party intends to terminate the Trust Fund and of the applicable
repurchase price of the related Mortgage Loans and REO Properties.

                  Notice of any termination of the Trust Fund, specifying the
Distribution Date on which related Certificateholders may surrender their
Certificates for payment of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to related Certificateholders mailed not
earlier than the 10th day and no later than the 15th day of the month
immediately preceding the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on related
Certificates will be made upon presentation and surrender of such Certificates
at the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made, and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of such Certificates at the office therein specified.
The Master Servicer will give such notice to each Rating Agency at the time such
notice is given to the affected Certificateholders.

                  In the event such notice is given, the Master Servicer shall
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
related Certificates. Upon such final deposit and the receipt by the Trustee of
a Request for Release therefor, the Co-Trustee shall promptly release to the
Master Servicer the Mortgage Files for the related Mortgage Loans.

                  Upon presentation and surrender of the related Certificates,
the Trustee shall cause to be distributed to Certificateholders of each affected
Class the amounts allocable to such Certificates held in the Distribution
Account (and, if applicable, the Carryover Reserve Fund) in the order and
priority set forth in Section 4.04 hereof on the final Distribution Date and in
proportion to their respective Percentage Interests.

                  In the event that any affected Certificateholders shall not
surrender related Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their related
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets that remain a part of the Trust Fund. If within one year after the second
notice all related Certificates shall not have been surrendered for
cancellation, the Class A-R Certificates shall be entitled to all unclaimed
funds and other assets that remain subject hereto.

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                  Section 9.03. ADDITIONAL TERMINATION REQUIREMENTS.

                  (a) In the event the Master Servicer exercises its purchase
option on the Mortgage Loans, the Trust Fund shall be terminated in accordance
with the following additional requirements, unless the Trustee has been supplied
with an Opinion of Counsel, at the expense of the Master Servicer, to the effect
that the failure of the Trust Fund to comply with the requirements of this
Section 9.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of a REMIC, or (ii) cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding:

                           (1) The Master Servicer shall establish a 90-day
liquidation period and notify the Trustee thereof, which shall in turn specify
the first day of such period in a statement attached to the Trust Fund's final
Tax Return pursuant to Treasury Regulation Section 1.860F-1. The Master Servicer
shall prepare a plan of complete liquidation and shall otherwise satisfy all the
requirements of a qualified liquidation under Section 860F of the Code and any
regulations thereunder, as evidenced by an Opinion of Counsel obtained at the
expense of the Master Servicer;

                           (2) During such 90-day liquidation period, and at or
prior to the time of making the final payment on the Certificates, the Master
Servicer as agent of the Trustee shall sell all of the assets of the Trust Fund
for cash; and

                           (3) At the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Class A-R Certificateholders all cash on hand
(other than cash retained to meet claims) related to such Class of Certificates,
and the Trust Fund shall terminate at that time.

                  (b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Master Servicer to specify the 90-day liquidation
period for the Trust Fund, which authorization shall be binding upon all
successor Certificateholders.

                  (c) The Trustee as agent for each REMIC created hereunder
hereby agrees to adopt and sign such a plan of complete liquidation upon the
written request of the Master Servicer, and, together with the holders of the
Class A-R Certificates, agree to take such other action in connection therewith
as may be reasonably requested by the Master Servicer.

                                      129
<PAGE>
                                   ARTICLE X.

                            MISCELLANEOUS PROVISIONS

Section 10.01.    AMENDMENT.

                  This Agreement may be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee, without the consent
of any of the Certificateholders to cure any ambiguity, to correct or supplement
any provisions herein, to make such other provisions with respect to matters or
questions arising under this Agreement, as shall not be inconsistent with any
other provisions herein or to give effect to the expectations of the investors
if such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder; provided
that any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
shall be required if the Person requesting such amendment obtains a letter from
each Rating Agency stating that such amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates, it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the trust created by this
Agreement may be made without the consent of Certificateholders representing not
less than 51% of the Voting Rights of each Class of Certificates affected by
such amendment.

                  The Trustee, the Depositor, the Master Servicer and the Seller
may also at any time and from time to time amend this Agreement, without the
consent of the Certificateholders, to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or appropriate to maintain the
qualification of the Trust Fund as a REMIC under the Code or to avoid or
minimize the risk of the imposition of any tax on the Trust Fund pursuant to the
Code that would be a claim against the Trust Fund at any time prior to the final
redemption of the Certificates, provided that the Trustee have been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee, to the
effect that such action is necessary or appropriate to maintain such
qualification or to avoid or minimize the risk of the imposition of such a tax.

                  This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Seller and the Trustee and the Holders of
each Class of Certificates adversely affected thereby evidencing not less than a
majority Percentage Interest of the Voting Rights of such Class for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided that no such amendment pursuant to this
paragraph shall (i) reduce in any manner the amount of, or delay the timing of,
payments required to be distributed on any Certificate without the consent of
the Holder of such Certificate, (ii) adversely affect in any material respect
the interests of the Holders of any Class of Certificates in a manner other than
as described in (i), without the consent of the Holders of Certificates of such
Class

                                      130
<PAGE>

evidencing 66% or more of the Voting Rights of such Class, or (iii) reduce the
aforesaid percentages of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of all such
Certificates then outstanding.

                  Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel, which opinion shall be an expense of
the party requesting such amendment but in any case shall not be an expense of
the Trustee, to the effect that such amendment will not cause the imposition of
any tax on the Trust Fund or the Certificateholders or cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are outstanding.

                  Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.

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

                  Nothing in this Agreement shall require the Trustee to enter
into an amendment without receiving an Opinion of Counsel, satisfactory to the
Trustee that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with; and (ii) either (A) the amendment does not adversely affect in
any material respect the interests of any Certificateholder or (B) the
conclusion set forth in the immediately preceding clause (A) is not required to
be reached pursuant to this Section 10.01.

                  Section 10.02. RECORDATION OF AGREEMENT; COUNTERPARTS.

                  This Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer at its expense.

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

                  Section 10.03. GOVERNING LAW.

                  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE

                                      131
<PAGE>

OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND
THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

                  Section 10.04. INTENTION OF PARTIES.

                  It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Depositor to the Trustee be, and be construed as, an absolute sale
thereof to the Trustee. It is, further, not the intention of the parties that
such conveyance be deemed a pledge thereof by the Depositor to the Trustee.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other reason
this Agreement is held or deemed to create a security interest in such assets,
then (i) this Agreement shall be deemed to be a security agreement (within the
meaning of the Uniform Commercial Code of the State of New York) with respect to
all such assets and security interests and (ii) the conveyance provided for in
this Agreement shall be deemed to be an assignment and a grant pursuant to the
terms of this Agreement by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets that constitute
the Trust Fund, whether now owned or hereafter acquired.

                  The Depositor for the benefit of the Certificateholders shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the assets of the Trust Fund, such security interest would be deemed
to be a perfected security interest of first priority under applicable law and
will be maintained as such throughout the term of the Agreement. The Depositor
shall arrange for filing any Uniform Commercial Code continuation statements in
connection with any security interest granted or assigned to the Trustee for the
benefit of the Certificateholders.

                  Section 10.05. NOTICES.

                  (a) The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it
has actual knowledge:

                  (i) Any material change or amendment to this Agreement;

                  (ii) The occurrence of any Event of Default that has not been
         cured;

                  (iii) The resignation or termination of the Master Servicer or
         the Trustee and the appointment of any successor;

                  (iv) The repurchase or substitution of Mortgage Loans pursuant
         to Sections 2.02, 2.03, 2.04 and 3.12; and

                                      132
<PAGE>

                  (v) The final payment to Certificateholders.

                  In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:

                  (i) Each report to Certificateholders described in Section
         4.05;

                  (ii) Each annual statement as to compliance described in
         Section 3.17; and

                  (iii) Each annual independent public accountants' servicing
         report described in Section 3.18.

                  (b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when sent by facsimile
transmission, first class mail or delivered to (i) in the case of the Depositor,
CWABS, Inc., 4500 Park Granada, Calabasas, California 91302, Attention: Josh
Adler, with a copy to the same address, Attention: Legal Department; (ii) in the
case of the Seller, Countrywide Home Loans, Inc., 4500 Park Granada, Calabasas,
California 91302, Attention: Josh Adler, with a copy to the same address,
Attention: Legal Department, or such other address as may be hereafter furnished
to the Depositor and the Trustee by the Master Servicer in writing; (iii) in the
case of the Master Servicer, Countrywide Home Loans Servicing LP, 400
Countrywide Way, Simi Valley, California 93065, Attention: Mark Wong or such
other address as may be hereafter furnished to the Depositor and the Trustee by
the Master Servicer in writing; (iv) in the case of the Trustee, The Bank of New
York, 101 Barclay Street, New York, New York 10286 Attention: Corporate Trust
MBS Administration, CWABS, Series 2003-BC1, or such other address as the Trustee
may hereafter furnish to the Depositor or the Master Servicer; (v) in the case
of the Co-Trustee, BNY Western Trust Company, a subsidiary of The Bank of New
York Company Inc., 700 S. Flower Street, Suite 200, Los Angeles, California,
90017, Attention: MBS Support Services; and (vi) in the case of the Rating
Agencies, (x) Moody's Investors Service, Inc., Attention: ABS Monitoring
Department, 99 Church Street, Sixth Floor, New York, New York 10007, and (y)
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., Attention: Mortgage Surveillance Group, 25 Broadway, 12th Floor, New York,
New York 10004. Notices to Certificateholders shall be deemed given when mailed,
first class postage prepaid, to their respective addresses appearing in the
Certificate Register.

                  Section 10.06. SEVERABILITY OF PROVISIONS.

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

                                      133
<PAGE>

                  Section 10.07. ASSIGNMENT.

                  Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 6.02, this Agreement may not be assigned
by the Master Servicer without the prior written consent of the Trustee and the
Depositor.

                  Section 10.08. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.

                  The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.

                  No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.

                  No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.

                                      134
<PAGE>

                  Section 10.09. INSPECTION AND AUDIT RIGHTS.

                  The Master Servicer agrees that, on reasonable prior notice,
it will permit any representative of the Depositor, the Seller or the Trustee
during the Master Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Master Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor, the Seller or the Trustee and to discuss its affairs, finances and
accounts relating to the Mortgage Loans with its officers, employees and
independent public accountants (and by this provision the Master Servicer hereby
authorizes such accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense incident to the exercise by the
Depositor, the Seller or the Trustee of any right under this Section 10.09 shall
be borne by the party requesting such inspection; all other such expenses shall
be borne by the Master Servicer.

                  Section 10.10. CERTIFICATES NONASSESSABLE AND FULLY PAID.

                  It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.

                            *            *            *

                                      135
<PAGE>

                  IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Seller, the Trustee and the Co-Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.

                                             CWABS, INC.,
                                               as Depositor

                                             By: /s/ Celia Coulter
                                                 -------------------------------
                                                Name:  Celia Coulter
                                                Title:  Vice President

                                             COUNTRYWIDE HOME LOANS, INC.,
                                               as Seller

                                             By: /s/ Celia Coulter
                                                 -------------------------------
                                                Name:  Celia Coulter
                                                Title:  Executive Vice President

                                             COUNTRYWIDE HOME LOANS
                                               SERVICING LP,
                                               as Master Servicer

                                             By:  COUNTRYWIDE GP, INC.

                                             By: /s/ Celia Coulter
                                                 -------------------------------
                                                Name:  Celia Coulter
                                                Title:  Senior Vice President

                                             THE BANK OF NEW YORK,
                                               not in its individual capacity,
                                               but solely as Trustee

                                             By: /s/ John Hannon
                                                 -------------------------------
                                                Name:  John Hannon
                                                Title:   Assistant Treasurer

                                      136
<PAGE>

                                             BNY WESTERN TRUST COMPANY,
                                               not in its individual capacity,
                                               but solely as Co-Trustee

                                             By: /s/ Stephanie Whited
                                                 -------------------------------
                                                Name:  Stephanie Whited
                                                Title:  Vice President

                                      137
<PAGE>

STATE OF CALIFORNIA                 )
                                    )        ss.:
COUNTY OF LOS ANGELES               )

                  On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Celia Coulter, personally known to me on the
basis of satisfactory evidence to be a Executive Vice President of Countrywide
Home Loans, Inc., one of the corporations that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation and acknowledged to me that such corporation executed the within
instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        ________________________
                                                              Notary Public

[Notarial Seal]

                                      138
<PAGE>

STATE OF CALIFORNIA                 )
                                    )        ss.:
COUNTY OF LOS ANGELES               )

                  On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Celia Coulter, personally known to me on the
basis of satisfactory evidence to be a Senior Vice President of Countrywide GP,
Inc., the general partner of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to be
the person who executed it on behalf of such corporation and acknowledged to me
that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        ________________________
                                                              Notary Public

[Notarial Seal]

                                      139
<PAGE>

STATE OF CALIFORNIA                 )
                                    )        ss.:
COUNTY OF LOS ANGELES               )

                  On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Celia Coulter, personally known to me on the
basis of satisfactory evidence to be a Vice President of CWABS, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of such corporation and acknowledged to me that
such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        ________________________
                                                              Notary Public

[Notarial Seal]

                                      140
<PAGE>

STATE OF NEW YORK                   )
                                    )        ss.:
COUNTY OF NEW YORK                  )

                  On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared John Hannon, personally known to me on the basis
of satisfactory evidence to be a Vice President of The Bank of New York, a New
York banking corporation that executed the within instrument, and also known to
me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        ________________________
                                                              Notary Public

[Notarial Seal]

                                      141
<PAGE>

STATE OF CALIFORNIA                 )
                                    )        ss.:
COUNTY OF LOS ANGELES               )

                  On this 28th day of January, 2003, before me, a notary public
in and for said State, appeared Stephanie Whited, personally known to me on the
basis of satisfactory evidence to be a Vice President of BNY Western Trust
Company, a California banking corporation that executed the within instrument,
and also known to me to be the person who executed it on behalf of such
corporation, and acknowledged to me that such corporation executed the within
instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                                        ________________________
                                                              Notary Public

[Notarial Seal]

                                      142

<PAGE>

                                                                     Exhibit A-1

                           Exhibit A-1 is a photocopy
                         of the Class A-1 Certificate as
                                   delivered.

                [See appropriate documents delivered at closing]

                                      A-1
<PAGE>

                                                                     Exhibit A-2

                           Exhibit A-2 is a photocopy
                          of the Class A-IO Certificate
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-2
<PAGE>

                                                                     Exhibit A-3

                           Exhibit A-3 is a photocopy
                          of the Class M-1 Certificates
                                  as delivered.

                [See appropriate documents delivered at closing.]

                                      A-3
<PAGE>

                                                                     Exhibit A-4

                           Exhibit A-4 is a photocopy
                          of the Class M-2 Certificate
                                                   as delivered.

                [See appropriate documents delivered at closing]

                                      A-4
<PAGE>

                                                                     Exhibit A-5

                           Exhibit A-5 is a photocopy
                          of the Class B-1 Certificate
                                 as delivered.

                [See appropriate documents delivered at closing]

                                      A-5
<PAGE>

                                                                       Exhibit B

                            Exhibit B is a photocopy
                           of the Class C Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      B-1

<PAGE>

                                                                       Exhibit C

                            Exhibit C is a photocopy
                           of the Class P Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      C-1

<PAGE>

                                                                       Exhibit D

                            Exhibit D is a photocopy
                          of the Class A-R Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      D-1

<PAGE>

                                                                       Exhibit E

                            Exhibit E is a photocopy
                      of the Tax Matters Person Certificate
                                  as delivered.

                [See appropriate documents delivered at closing]

                                      E-1

<PAGE>

                                                             Exhibit F-1 and F-2

               Exhibit F-1 and F-2 are schedules of Mortgage Loans

         [Delivered to Trustee at closing and on file with the Trustee]

                                  F-1 and F-2

<PAGE>

                                   EXHIBIT G-1

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

                  Re:      Pooling and Servicing Agreement dated as of January
                           1, 2003 among CWABS, Inc., as Depositor, Countrywide
                           Home Loans, Inc., as Seller, Countrywide Home Loans
                           Servicing LP, as Master Servicer, and The Bank of New
                           York, as Trustee, and BNY Western Trust Company, as
                           Co-Trustee, relating to the Asset-Backed
                           Certificates, Series 2003-BC1
                           -----------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee (the "Trustee"), hereby
certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or listed on the attachment hereto)
it has reviewed the Mortgage File and the Mortgage Loan Schedule and has
determined that: (i) all documents required to be included in the Mortgage File
are in its possession; (ii) such documents have been reviewed by it and appear
regular on their face and relate to such Mortgage Loan; and (iii) based on
examination by it, and only as to such documents, the information set forth in
items (i), (ii), (iii) and (iv) of the definition or description of "Mortgage
Loan Schedule" is correct.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.

                                     G-1-1

<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                   The Bank of New York,
                                                     as Trustee

                                                   By:__________________________
                                                   Name:
                                                   Title:

                                     G-1-2

<PAGE>

                                   EXHIBIT G-2

                    FORM OF INTERIM CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

                  Re:      Pooling and Servicing Agreement dated as of January
                           1, 2003 among CWABS, Inc., as Depositor, Countrywide
                           Home Loans, Inc., as Seller, Countrywide Home Loans
                           Servicing LP, as Master Servicer, The Bank of New
                           York, as Trustee, and BNY Western Trust Company, as
                           Co-Trustee, relating to the Asset-Backed
                           Certificates, Series 2003-BC1
                           ----------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
the attached list of exceptions) the Co-Trustee has received:

         (i)      the original Mortgage Note, endorsed by the Seller or the
                  originator of such Mortgage Loan, without recourse in the
                  following form: "Pay to the order of _______________ without
                  recourse", with all intervening endorsements that show a
                  complete chain of endorsement from the originator to the
                  Seller, or, if the original Mortgage Note has been lost or
                  destroyed and not replaced, an original lost note affidavit
                  from the Seller, stating that the original Mortgage Note was
                  lost or destroyed, together with a copy of the related
                  Mortgage Note;

         (ii)     in the case of each Mortgage Loan that is not a MERS Mortgage
                  Loan, the original recorded Mortgage[, and in the case of each
                  Mortgage Loan that is a MERS Mortgage Loan, the original
                  Mortgage, noting thereon the presence of the MIN of the
                  Mortgage Loan and language indicating that the Mortgage Loan
                  is a MOM Loan if the Mortgage Loan is a MOM Loan, with
                  evidence of recording indicated thereon, or a copy of the
                  Mortgage certified by the public recording office in which
                  such Mortgage has been recorded;

                                     G-2-1
<PAGE>

         (iii)    in the case of each Mortgage Loan that is not a MERS Mortgage
                  Loan, a duly executed assignment of the Mortgage to
                  "Asset-Backed Certificates, Series 2003-BC1, CWABS, Inc., by
                  The Bank of New York, a New York banking corporation, as
                  trustee under the Pooling and Servicing Agreement dated as of
                  January 1, 2003, without recourse", or, in the case of each
                  Mortgage Loan with respect to property located in the State of
                  California that is not a MERS Mortgage Loan, a duly executed
                  assignment of the Mortgage in blank (each such assignment,
                  when duly and validly completed, to be in recordable form and
                  sufficient to effect the assignment of and transfer to the
                  assignee thereof, under the Mortgage to which such assignment
                  relates);

         (iv)     the original recorded assignment or assignments of the
                  Mortgage together with all interim recorded assignments of
                  such Mortgage [(noting the presence of a MIN in the case of
                  each MERS Mortgage Loan)];

         (v)      the original or copies of each assumption, modification,
                  written assurance or substitution agreement, if any, with
                  evidence of recording thereon if recordation thereof is
                  permissible under applicable law; and

         (vi)     the original or duplicate original lender's title policy or a
                  printout of the electronic equivalent and all riders thereto
                  or, in the event such original title policy has not been
                  received from the insurer, any one of an original title
                  binder, an original preliminary title report or an original
                  title commitment, or a copy thereof certified by the title
                  company, with the original policy of title insurance to be
                  delivered within one year of the Closing Date.

         In the event that in connection with any Mortgage Loan that is not a
MERS Mortgage Loan the Seller cannot deliver the original recorded Mortgage or
all interim recorded assignments of the Mortgage satisfying the requirements of
clause (ii), (iii) or (iv), as applicable, the Trustee has received, in lieu
thereof, a true and complete copy of such Mortgage and/or such assignment or
assignments of the Mortgage, as applicable, each certified by the Seller, the
applicable title company, escrow agent or attorney, or the originator of such
Mortgage Loan, as the case may be, to be a true and complete copy of the
original Mortgage or assignment of Mortgage submitted for recording.

         Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xi) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage

                                     G-2-2
<PAGE>

File of any of the Mortgage Loan identified on the Mortgage Loan Schedule or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan.

                                     G-2-3
<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                     The Bank of New York,
                                                          as Trustee

                                                     By:________________________
                                                        Name:
                                                        Title:

                                     G-2-4
<PAGE>

                                   EXHIBIT G-3

                      FORM OF DELAY DELIVERY CERTIFICATION

                                     [Date]

[Depositor]

[Seller]

[Master Servicer]

                  Re:      Pooling and Servicing Agreement dated as of January
                           1, 2003 (the "Pooling and Servicing Agreement") among
                           CWABS, Inc., as Depositor, Countrywide Home Loans,
                           Inc., as Seller, Countrywide Home Loans Servicing LP,
                           as Master Servicer, The Bank of New York, as Trustee,
                           and BNY Western Trust Company, as Co-Trustee,
                           relating to the Asset-Backed Certificates, Series
                           2003-BC1
                           -----------------------------------------------------

Gentlemen:

         Reference is made to the Initial Certification of Trustee relating to
the above-referenced series, with the schedule of exceptions attached thereto,
delivered by the undersigned, as Trustee, on the Closing Date in accordance with
Section 2.02 of the above-captioned Pooling and Servicing Agreement. The
undersigned hereby certifies that as to each Delay Delivery Mortgage Loan listed
on the Schedule A attached hereto (other than any Mortgage Loan paid in full or
listed on Schedule B attached hereto) the Co-Trustee has received:

                  the original Mortgage Note, endorsed by the Seller or the
         originator of such Mortgage Loan, without recourse in the following
         form: "Pay to the order of _______________ without recourse", with all
         intervening endorsements that show a complete chain of endorsement from
         the originator to the Seller, or, if the original Mortgage Note has
         been lost or destroyed and not replaced, an original lost note
         affidavit from the Seller, stating that the original Mortgage Note was
         lost or destroyed, together with a copy of the related Mortgage Note;

                  in the case of each Mortgage Loan that is not a MERS Mortgage
         Loan, a duly executed assignment of the Mortgage to "Asset-Backed
         Certificates, Series 2003-BC1, CWABS, Inc., by The Bank of New York, a
         New York banking corporation, as trustee under the Pooling and
         Servicing Agreement dated as of January 1, 2003, without recourse", or,
         in the case of each Mortgage Loan with respect to property located in
         the State of California that is not a MERS Mortgage Loan, a duly
         executed assignment of the Mortgage in blank (each such assignment,
         when duly and validly completed, to be in

                                     G-3-1
<PAGE>

         recordable form and sufficient to effect the assignment of and transfer
         to the assignee thereof, under the Mortgage to which such assignment
         relates).

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loan identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                     THE BANK OF NEW YORK,
                                                     as Trustee

                                                     By:______________________
                                                     Name:
                                                     Title:

                                     G-3-2
<PAGE>

                                   EXHIBIT G-4

                                   [RESERVED]

                                      G-4

<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [Date]

[Depositor]

[Master Servicer]

[Seller]

         Re:      Pooling and Servicing Agreement dated as of January 1, 2003
                  (the "Pooling and Servicing Agreement") among CWABS, Inc., as
                  Depositor, Countrywide Home Loans, Inc., as Seller,
                  Countrywide Home Loans Servicing LP, as Master Servicer, The
                  Bank of New York, as Trustee, and BNY Western Trust Company,
                  as Co-Trustee, relating to the Asset-Backed Certificates,
                  Series 2003-BC1
                  ------------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Co-Trustee has received:

         (i) the original Mortgage Note, endorsed by the Seller or the
originator of such Mortgage Loan, without recourse in the following form: "Pay
to the order of _________________ without recourse", with all intervening
endorsements that show a complete chain of endorsement from the originator to
the Seller, or, if the original Mortgage Note has been lost or destroyed and not
replaced, an original lost note affidavit from the Seller, stating that the
original Mortgage Note was lost or destroyed, together with a copy of the
related Mortgage Note;

         (ii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original recorded Mortgage[, and in the case of each Mortgage Loan
that is a MERS Mortgage Loan, the original Mortgage, noting thereon the presence
of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan
is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public recording
office in which such Mortgage has been recorded;

         (iii) in the case of each Mortgage Loan that is not a MERS Mortgage
Loan, a duly executed assignment of the Mortgage to "Asset-Backed Certificates,
Series 2003-BC1, CWABS, Inc., by The Bank of New York, a New York banking
corporation, as trustee under the Pooling

                                      H-1
<PAGE>

and Servicing Agreement dated as of January 1, 2003, without recourse", or, in
the case of each Mortgage Loan with respect to property located in the State of
California that is not a MERS Mortgage Loan, a duly executed assignment of the
Mortgage in blank (each such assignment, when duly and validly completed, to be
in recordable form and sufficient to effect the assignment of and transfer to
the assignee thereof, under the Mortgage to which such assignment relates);

         (iv) the original recorded assignment or assignments of the Mortgage
together with all interim recorded assignments of such Mortgage [(noting the
presence of a MIN in the case of each MERS Mortgage Loan)];

         (v) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, with evidence of recording thereon
if recordation thereof is permissible under applicable law; and

         (vi) the original or duplicate original lender's title policy or a
printout of the electronic equivalent and all riders thereto or any one of an
original title binder, an original preliminary title report or an original title
commitment, or a copy thereof certified by the title company.

         If the public recording office in which a Mortgage or assignment
thereof is recorded has retained the original of such Mortgage or assignment,
the Trustee has received, in lieu thereof, a copy of the original Mortgage or
assignment so retained, with evidence of recording thereon, certified to be true
and complete by such recording office.

         Based on its review and examination and only as to the foregoing
documents, (i) such documents appear regular on their face and related to such
Mortgage Loan, and (ii) the information set forth in items (i), (iv), (v), (vi),
(viii), (xiii) and (xiv) of the definition of the "Mortgage Loan Schedule" in
Section 1.01 of the Pooling and Servicing Agreement accurately reflects
information set forth in the Mortgage File.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule or (ii) the
collectibility, insurability, effectiveness or suitability of any such Mortgage
Loan.

                                      H-2
<PAGE>

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                                     The Bank of New York,
                                                           as Trustee

                                                     By:________________________
                                                        Name:
                                                        Title:

                                      H-3
<PAGE>

                                    EXHIBIT I

                               TRANSFER AFFIDAVIT

STATE OF                   )
                           )   ss.:
COUNTY OF                  )

         The undersigned, being first duly sworn, deposes and says as follows:

    1. The undersigned is an officer of __________, the proposed transferee of
an Ownership Interest in a Class A-R Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement, dated as of January 1, 2003
(the "Agreement"), by and among CWABS, Inc., as depositor (the "Depositor"),
Countrywide Home Loans, Inc., as Seller, Countrywide Home Loans Servicing LP, as
Master Servicer, and The Bank of New York, as Trustee. Capitalized terms used,
but not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed
to such terms in the Agreement. The transferee has authorized the undersigned to
make this affidavit on behalf of the transferee.

    2. Either (a) the transferee is not an employee benefit plan that is subject
to Section 406 of ERISA or to section 4975 of the Internal Revenue Code of 1986,
nor is it acting on behalf of or with plan assets of any such plan, or (b) the
transferee has provided the opinion of counsel specified in Section 5.02(b) of
the Agreement. The transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The transferee is acquiring its
Ownership Interest in the Certificate for its own account.

    3. The transferee has been advised of, and understands that (i) a tax will
be imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent transferee furnished to such Person an affidavit that such subsequent
transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.

    4. The transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The transferee
understands that such tax will not be imposed for any period with

                                      I-1
<PAGE>

respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)

    5. The transferee has reviewed the provisions of Section 5.02(c) of the
Agreement (attached hereto as Exhibit 2 and incorporated herein by reference)
and understands the legal consequences of the acquisition of an Ownership
Interest in the Certificate including, without limitation, the restrictions on
subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The transferee expressly agrees to be bound by and to abide by
the provisions of Section 5.02(c) of the Agreement and the restrictions noted on
the face of the Certificate. The transferee understands and agrees that any
breach of any of the representations included herein shall render the Transfer
to the transferee contemplated hereby null and void.

    6. The transferee agrees to require a Transfer Affidavit from any Person to
whom the transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
transferee is acting as nominee, trustee or agent, and the transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the transferee, the
transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit I to the Agreement (a "Transferor Certificate") to the
effect that such transferee has no actual knowledge that the Person to which the
Transfer is to be made is not a Permitted Transferee.

    7. The transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the Class A-R
Certificates.

    8. The transferee's taxpayer identification number is __________________.

    9. The transferee is a U.S. Person as defined in Code section 7701(a)(30).

    10. The transferee is aware that the Class A-R Certificates may be
"noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax. In addition, as the
holder of a noneconomic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and the
transferee hereby represents that it intends to pay taxes associated with
holding the residual interest as they become due.

    11. The transferee has provided financial statements or other financial
information requested by the Transferor in connection with the transfer of the
Class A-R Certificates to permit the Transferor to assess the financial
capability of the transferee to pay such taxes.

                                      I-2
<PAGE>

                      *                *                *

                                      I-3
<PAGE>

         IN WITNESS WHEREOF, the transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ____th day of _____________, 20__.

                                                     [NAME OF TRANSFEREE]

                                                     By:________________________
                                                        Name:
                                                        Title:

[Corporate Seal]

ATTEST:

_________________________
[Assistant] Secretary

         Personally appeared before me the above-named _____________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ____________ of the transferee, and acknowledged that he executed the
same as his free act and deed and the free act and deed of the transferee.

         Subscribed and sworn before me this ____th day of _______, 20__.

                                           ______________________________
                                                    NOTARY PUBLIC

                                           My Commission expires the
                                           ___ day of _______________, 20__.

                                      I-4
<PAGE>

                                                                       EXHIBIT 1

                               Certain Definitions

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

         "Permitted Transferee": Any person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, International Organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in section 521 of the Code) that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class A-R Certificate, (iv) rural electric and telephone cooperatives described
in section 1381(a)(2)(C) of the Code, (v) an "electing large partnership" as
defined in Section 775 of the Code, (vi) a Person that is not a citizen or
resident of the United States, a corporation, partnership, or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includible in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trustor unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI, and (vii) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the Transfer of an Ownership Interest in a Class A-R
Certificate to such Person may cause the Trust Fund to fail to qualify as a
REMIC at any time that any Certificates are Outstanding. The terms "United
States," "State" and "International Organization" shall have the meanings set
forth in section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of the Federal Home Loan Mortgage
Corporation, a majority of its board of directors is not selected by such
government unit.

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

         "Transfer": Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.

                                      I-5
<PAGE>

                        Section 5.02(c) of the Agreement
                        --------------------------------

                  (c) Each Person who has or who acquires any Ownership Interest
in a Class A-R Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following provisions,
and the rights of each Person acquiring any Ownership Interest in a Class A-R
Certificate are expressly subject to the following provisions:

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

                  (ii) No Ownership Interest in a Class A-R Certificate may be
         registered on the Closing Date or thereafter transferred, and the
         Trustee shall not register the Transfer of any Class A-R Certificate
         unless, in addition to the representation letters required to be
         delivered to the Trustee under subparagraph (b) above, the Trustee
         shall have been furnished with an affidavit (a "Transfer Affidavit") of
         the initial owner or the proposed transferee in the form attached
         hereto as Exhibit I.

                  (iii) Each Person holding or acquiring any Ownership Interest
         in a Class A-R Certificate shall agree (A) to obtain a Transfer
         Affidavit from any other Person to whom such Person attempts to
         Transfer its Ownership Interest in a Class A-R Certificate, (B) to
         obtain a Transfer Affidavit from any Person for whom such Person is
         acting as nominee, trustee or agent in connection with any Transfer of
         a Class A-R Certificate and (C) not to Transfer its Ownership Interest
         in a Class A-R Certificate or to cause the Transfer of an Ownership
         Interest in a Class A-R Certificate to any other Person if it has
         actual knowledge that such Person is not a Permitted Transferee.

                  (iv) Any attempted or purported Transfer of any Ownership
         Interest in a Class A-R Certificate in violation of the provisions of
         this Section 5.02(c) shall be absolutely null and void and shall vest
         no rights in the purported transferee. If any purported transferee
         shall become a Holder of a Class A-R Certificate in violation of the
         provisions of this Section 5.02(c), then the last preceding Permitted
         Transferee shall be restored to all rights as Holder thereof
         retroactive to the date of registration of Transfer of such Class A-R
         Certificate. The Trustee shall be under no liability to any Person for
         any registration of Transfer of a Class A-R Certificate that is in fact
         not permitted by Section 5.02(b) and

                                      I-6
<PAGE>

         Section 5.02(c) or for making any payments due on such Certificate to
         the Holder thereof or taking any other action with respect to such
         Holder under the provisions of this Agreement so long as the Transfer
         was registered after receipt of the related Transfer Affidavit,
         Transferor Certificate and either the Rule 144A Letter or the
         Investment Letter. The Trustee shall be entitled but not obligated to
         recover from any Holder of a Class A-R Certificate that was in fact not
         a Permitted Transferee at the time it became a Holder or, at such
         subsequent time as it became other than a Permitted Transferee, all
         payments made on such Class A-R Certificate at and after either such
         time. Any such payments so recovered by the Trustee shall be paid and
         delivered by the Trustee to the last preceding Permitted Transferee of
         such Certificate.

                  (v) The Depositor shall use its best efforts to make
         available, upon receipt of written request from the Trustee, all
         information necessary to compute any tax imposed under Section 860E(e)
         of the Code as a result of a Transfer of an Ownership Interest in a
         Class A-R Certificate to any Holder who is not a Permitted Transferee.

                  The restrictions on Transfers of a Class A-R Certificate set
forth in this Section 5.02(c) shall cease to apply (and the applicable portions
of the legend on a Class A-R Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee of an Opinion of Counsel,
which Opinion of Counsel shall not be an expense of the Trust Fund, the Trustee,
the Seller or the Master Servicer, to the effect that the elimination of such
restrictions will not cause any REMIC hereunder to fail to qualify as a REMIC at
any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Class A-R Certificate hereby
consents to any amendment of this Agreement that, based on an Opinion of Counsel
furnished to the Trustee, is reasonably necessary (a) to ensure that the record
ownership of, or any beneficial interest in, a Class A-R Certificate is not
transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Class A-R
Certificate that is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.

                                      I-7
<PAGE>

                                   EXHIBIT J-1

                       FORM OF TRANSFEROR CERTIFICATE FOR
                             CLASS A-R CERTIFICATES

                                                        Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed
                           Certificates, Series 2003-BC1
                           -----------------------------

Ladies and Gentlemen:

In connection with our disposition of the Class A-R Certificates, we certify
that we have no knowledge the Transferee is not a Permitted Transferee. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of January 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.

                                              Very truly yours,

                                              __________________________________
                                              Name of Transferor

                                              By: ______________________________
                                                  Name:
                                                  Title:

                                     J-1-1

<PAGE>

                                   EXHIBIT J-2

                       FORM OF TRANSFEROR CERTIFICATE FOR
                              PRIVATE CERTIFICATES

                                                        Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2003-BC1, Class [   ]
                           --------------------------------------

Ladies and Gentlemen:

In connection with our disposition of the above-captioned Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of January 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.

                                                     Very truly yours,

                                                     ___________________________
                                                     Name of Transferor

                                                     By: _______________________
                                                         Name:
                                                         Title:

                                     J-2-1

<PAGE>

                                    EXHIBIT K

                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

                                                             Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2003-BC1, Class [   ]
                           --------------------------------------

Ladies and Gentlemen:

In connection with our acquisition of the above-captioned Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has permitted the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement (e) we are acquiring the Certificates for investment for our own
account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with

                                      K-1
<PAGE>

respect thereto, or taken any other action which would result in a violation of
Section 5 of the Act, and (g) we will not sell, transfer or otherwise dispose of
any Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of January 1,
2003, among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, The Bank of New York,
as Trustee, and BNY Western Trust Company, as Co-Trustee.

                                                     Very truly yours,

                                                     ___________________________
                                                     Name of Transferee

                                                     By: _______________________
                                                           Authorized Officer

                                      K-2
<PAGE>

                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

                                                           Date:

CWABS, Inc.,
         as Depositor
4500 Park Granada
Calabasas, California 91302

The Bank of New York,
         as Trustee
101 Barclay Street
New York, New York 10286

                  Re:      CWABS, Inc. Asset-Backed Certificates,
                           Series 2003-BC1, Class [   ]
                           --------------------------------------

Ladies and Gentlemen:

In connection with our acquisition of the above-captioned Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan or arrangement, nor are we using the assets of any such plan or
arrangement to effect such acquisition or (ii) the transferee has permitted the
opinion of counsel specified in Section 5.02(b) of the Pooling and Servicing
Agreement (e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates,
any interest in the Certificates or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other

                                      L-1
<PAGE>

action, that would constitute a distribution of the Certificates under the
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act. All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement dated
as of January 1, 2003, among CWABS, Inc., as Depositor, Countrywide Home Loans,
Inc., as Seller, Countrywide Home Loans Servicing LP, as Master Servicer, The
Bank of New York, as Trustee, and BNY Western Trust Company, as Co-Trustee.

                                      L-2
<PAGE>

                              ANNEX 1 TO EXHIBIT L
                              --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

          [For Transferees Other Than Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

                  2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis either at least $100,000 in securities
or, if Buyer is a dealer, Buyer must own and/or invest on a discretionary basis
at least $10,000,000 in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the
criteria in the category marked below.

                  ___      CORPORATION, ETC. The Buyer is a corporation (other
                           than a bank, savings and loan association or similar
                           institution), Massachusetts or similar business
                           trust, partnership, or charitable organization
                           described in Section 501(c)(3) of the Internal
                           Revenue Code of 1986, as amended.

                  ___      BANK. The Buyer (a) is a national bank or banking
                           institution organized under the laws of any State,
                           territory or the District of Columbia, the business
                           of which is substantially confined to banking and is
                           supervised by the State or territorial banking
                           commission or similar official or is a foreign bank
                           or equivalent institution, and (b) has an audited net
                           worth of at least $25,000,000 as demonstrated in its
                           latest annual financial statements, A COPY OF WHICH
                           IS ATTACHED HERETO.

                  ___      SAVINGS AND LOAN. The Buyer (a) is a savings and loan
                           association, building and loan association,
                           cooperative bank, homestead association or similar
                           institution, which is supervised and examined by a
                           State or Federal authority having supervision over
                           any such institutions or is a foreign savings and
                           loan association or equivalent institution and (b)
                           has an audited net worth of at least $25,000,000 as
                           demonstrated in its latest annual financial
                           statements, A COPY OF WHICH IS ATTACHED HERETO.

                                      L-3
<PAGE>

                  ___      BROKER-DEALER. The Buyer is a dealer registered
                           pursuant to Section 15 of the Securities Exchange Act
                           of 1934.

                  ___      INSURANCE COMPANY. The Buyer is an insurance company
                           whose primary and predominant business activity is
                           the writing of insurance or the reinsuring of risks
                           underwritten by insurance companies and which is
                           subject to supervision by the insurance commissioner
                           or a similar official or agency of a State, territory
                           or the District of Columbia.

                  ___      STATE OR LOCAL PLAN. The Buyer is a plan established
                           and maintained by a State, its political
                           subdivisions, or any agency or instrumentality of the
                           State or its political subdivisions, for the benefit
                           of its employees.

                  ___      ERISA PLAN. The Buyer is an employee benefit plan
                           within the meaning of Title I of the Employee
                           Retirement Income Security Act of 1974.

                  ___      INVESTMENT ADVISOR. The Buyer is an investment
                           advisor registered under the Investment Advisors Act
                           of 1940.

                  ___      SMALL BUSINESS INVESTMENT COMPANY. Buyer is a small
                           business investment company licensed by the U.S.
                           Small Business Administration under Section 301(c) or
                           (d) of the Small Business Investment Act of 1958.

                  ___      BUSINESS DEVELOPMENT COMPANY. Buyer is a business
                           development company as defined in Section 202(a)(22)
                           of the Investment Advisors Act of 1940.

                  3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

                  4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated

                                      L-4
<PAGE>

subsidiary of another enterprise and the Buyer is not itself a reporting company
under the Securities Exchange Act of 1934, as amended.

                  5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.

                  6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                                          ______________________
                                                            Print Name of Buyer

                                                          By:___________________
                                                          Name:
                                                          Title:

                                                          Date:_________________

                                      L-5
<PAGE>

                                                            ANNEX 2 TO EXHIBIT L
                                                            --------------------

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

           [For Transferees That are Registered Investment Companies]

The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:

                  1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

                  2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.

                  ___      The Buyer owned $______ in securities (other than the
                           excluded securities referred to below) as of the end
                           of the Buyer's most recent fiscal year (such amount
                           being calculated in accordance with Rule 144A).

                  ___      The Buyer is part of a Family of Investment Companies
                           which owned in the aggregate $_______ in securities
                           (other than the excluded securities referred to
                           below) as of the end of the Buyer's most recent
                           fiscal year (such amount being calculated in
                           accordance with Rule 144A).

                  3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).

                                      L-6
<PAGE>

                  4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

                  5. The Buyer is familiar with Rule 144A and under-stands that
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

                  6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.

                                              __________________________________
                                                Print Name of Buyer or Adviser

                                              By: ______________________________
                                              Name:
                                              Title:

                                              IF AN ADVISER:

                                              __________________________________
                                                      Print Name of Buyer

                                              Date: ____________________________

                                      L-7
<PAGE>

                                    EXHIBIT M

                               REQUEST FOR RELEASE
                                (for Co-Trustee)

Loan Information
         Name of Mortgagor:
                                     -------------------------------------------
         Master Servicer
         Loan No.:
                                     -------------------------------------------
Co-Trustee
         Name:
                                     -------------------------------------------
         Address:
                                     -------------------------------------------
         Co-Trustee
         Mortgage File No.:
                                     -------------------------------------------

         The undersigned Master Servicer hereby acknowledges that it has
received from _______________________________________, as Co-Trustee for the
Holders of Asset-Backed Certificates, Series 2003-BC1, the documents referred to
below (the "Documents"). All capitalized terms not otherwise defined in this
Request for Release shall have the meanings given them in the Pooling and
Servicing Agreement dated as of January 1, 2003 (the "Pooling and Servicing
Agreement") among CWABS, Inc., as Depositor, Countrywide Home Loans, Inc., as
Seller, Countrywide Home Loans Servicing LP, as Master Servicer, the Trustee and
the Co-Trustee.

(  )      Mortgage Note dated ___________, ____, in the original principal sum
         of $________, made by __________________, payable to, or endorsed to
         the order of, the Trustee.

(  )     Mortgage recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image _____________.

(  )     Deed of Trust recorded on _________________ as instrument no.
         ________________ in the County Recorder's Office of the County of
         ________________, State of _______________ in book/reel/docket
         _______________ of official records at page/image _____________.

                                      M-1
<PAGE>

(  )     Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
         _________________ as instrument no. __________ in the County Recorder's
         Office of the County of __________, State of _______________ in
         book/reel/docket _______________ of official records at page/image
         _____________.

(  )     Other documents, including any amendments, assignments or other
         assumptions of the Mortgage Note or Mortgage.

(  )     ______________________________________________

(  )     ______________________________________________

(  )     ______________________________________________

(  )     ______________________________________________

         The undersigned Master Servicer hereby acknowledges and agrees as
follows:

                  (1) The Master Servicer shall hold and retain possession of
         the Documents in trust for the benefit of the Trust Fund, solely for
         the purposes provided in the Agreement.

                  (2) The Master Servicer shall not cause or knowingly permit
         the Documents to become subject to, or encumbered by, any claim, liens,
         security interest, charges, writs of attachment or other impositions
         nor shall the Master Servicer assert or seek to assert any claims or
         rights of setoff to or against the Documents or any proceeds thereof.

                  (3) The Master Servicer shall return each and every Document
         previously requested from the Mortgage File to the Co-Trustee when the
         need therefor no longer exists, unless the Mortgage Loan relating to
         the Documents has been liquidated and the proceeds thereof have been
         remitted to the Certificate Account and except as expressly provided in
         the Agreement.

                  (4) The Documents and any proceeds thereof, including any
         proceeds of proceeds, coming into the possession or control of the
         Master Servicer shall at all times be earmarked for the account of the
         Trust Fund, and the Master Servicer shall keep the Documents and any
         proceeds separate and distinct from all other property in the Master
         Servicer's possession, custody or control.

                                                     [Master Servicer]

                                                     By  _______________________

                                                     Its _______________________

Date: _________________, ____

                                      M-2
<PAGE>

                                    EXHIBIT N

                               REQUEST FOR RELEASE
             [Mortgage Loans Paid in Full, Repurchased or Replaced]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                           ASSET-BACKED CERTIFICATES,
                                 Series 2003-BC1

__________________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN
OFFICER OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER
SIGNATURE, AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

[ALL PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.13 OF THE
POOLING AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN
DELIVERED TO THE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE
CONDITIONS SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE POOLING AND SERVICING
AGREEMENT.]

LOAN NUMBER:_______________                 BORROWER'S NAME:_____________

COUNTY:____________________

[For Substitution or Repurchase Only: The Master Servicer certifies that [an]
[no] opinion is required by Section 2.05 [and is attached hereto].]

I HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
THAT ARE REQUIRED TO BE DEPOSITED IN THE CERTIFICATE ACCOUNT PURSUANT TO SECTION
3.05 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.

____________      _____________________              DATED:____________

/ /      VICE PRESIDENT

/ /      ASSISTANT VICE PRESIDENT

                                      N-1

<PAGE>

                                                                       Exhibit O

                            Exhibit O is a photocopy
                           of the Depository Agreement
                                  as delivered.

                [see appropriate documents delivered at closing]

                                      O-1

<PAGE>

                                    EXHIBIT P

                       FORM OF MORTGAGE NOTE AND MORTGAGE

                                      P-1

<PAGE>

                                    EXHIBIT Q

                                   [RESERVED]

                                      Q-1

<PAGE>

                                    EXHIBIT R

                            FORM OF THE CAP CONTRACT

BANK OF AMERICA  N. A.
233 South Wacker Drive, Suite 2800
Chicago, Illinois 60606
Tel   312-234-2732
Fax  312-234-3603

TO:           CWABS Asset-Backed Certificates, Series 2003-BC1
              c/o The Bank of New York
                             as Trustee for CWABS Asset-Backed Certificates,
                             Series 2003-BC1
              101 Barclay Street - 8W
              New York, New York
              Corporate Trust, MBS Administration

TEL:          [______________]

FAX:          [______________]

FROM:         Bank of America, N.A.
              233 South Wacker Drive - Suite
2800
              Chicago, Illinois  60606
              Denny Trompeter / Mike
Dillon

Date:         [______________]

Our Reference No.            [______________]

Internal Tracking Nos.       [______________]

The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction originally entered into between Bank of America, N.A.. and
Countrywide Home Loans, Inc. on December 20, 2002 (Bank of America reference
number 3017354), which such Transaction is currently between The Bank of New
York solely as trustee for CWABS Asset-Backed Certificates, Series 2003-BC1
("Party B") and Bank of America, N.A. ("Party A", each a "party" and together
"the parties") pursuant to the terms of that certain Assignment Agreement dated
January 28, 2003 (the "Transaction").

This letter agreement constitutes a "Confirmation" and the definitions and
provisions

                                      R-1
<PAGE>

contained in the 2000 ISDA Definitions, as published by the International Swaps
and Derivatives Association, Inc. (the "Definitions") are incorporated into this
Confirmation. In the event of any inconsistency between the Definitions and this
Confirmation, this Confirmation will govern.

1. This Confirmation evidences a complete binding agreement between the parties
as to the terms of the Transaction to which this Confirmation relates. In
addition, the parties agree that for the purposes of this Transaction, this
Confirmation will supplement, form a part of, and be subject to an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) as if
the parties had executed an agreement in such form (but without any Schedule
except for the election of (i) the laws of the State of New York (without
reference to choice of law doctrine) as the governing law and (ii) USD as the
Termination Currency) on the Trade Date of the Transaction (the "Agreement"). In
the event of any inconsistency between the provisions of that agreement and this
Confirmation, this Confirmation will prevail for the purpose of this
Transaction.

Each party represents to the other party and will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent a
written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction)

         (I) NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgement and
upon advice from such advisors as it has deemed necessary. It is not relying on
any communication (written or oral) of the other party as investment advice or
as a recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. Further, such party has not received from the other
party any assurance or guarantee as to the expected results of that Transaction.

         (II) EVALUATION AND UNDERSTANDING. It is capable of evaluation and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the financial and
other risks of that Transaction.

         (III) STATUS OF PARTIES. The other party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.

                                      R-2
<PAGE>

1. In this Confirmation "Party A" means Bank of America, N.A. and "Party B"
means CWABS Asset-Backed Certificates, Series 2003-BC1

2. The terms of this Transaction to which this Confirmation relates are as
follows:

              Notional Amount:

              Trade Date:

              Effective Date:

              Assignment Effective Date:

              Termination Date:           [____________], subject to adjustment
                                          in accordance with the Modified
                                          Following Business Day Convention

              Amortization:               Applicable (see Schedule A attached
                                          hereto)

              FIXED AMOUNTS:

                  Fixed Payer:            Party B

II.
    FIXED RATE PAYER

                  Payment Dates:          Not Applicable

                  Fixed Amount:           Not Applicable

              FLOATING AMOUNTS:

III.                                      FLOATING RATE

                   Payer:                 Party A

                                      R-3
<PAGE>

                  Cap Rate:                             5.13000%

                  Floating Rate Payer Payment
                  Dates:                                One Business Day prior
                                                        to the end of each
                                                        Calculation Period,
                                                        subject to adjustment in
                                                        accordance with the
                                                        Modified Following
                                                        Business Day Convention.

                  Floating Rate Payer Calculation
                  Period End Dates:                     The 25th of each month,
                                                        commencing
                                                        [______________] and
                                                        ending on the
                                                        Termination Date,
                                                        subject to adjustment in
                                                        accordance with the
                                                        Modified Following
                                                        Business Day Convention

                  Floating Rate for the
                  Initial Calculation Period:           To be set

                  Floating Rate Option:                 USD-LIBOR-BBA

                  Designated Maturity:                  1 Month

                  Spread:                               None

                  Floating Rate Day Count
                  Fraction:                             Actual/360

                  Reset Dates:                          The first day of each
                                                        Calculation Period

                  Business Days:                        New York, London

                  Calculation Agent:                    Party A

      3.      RECORDING OF CONVERSATIONS:

              Each party to this Transaction acknowledges and agrees to the tape

                                      R-4
<PAGE>

              recording of conversations between the parties to this Transaction
              whether by one or other or both of the parties or their agents,
              and that any such tape recordings may be submitted in evidence in
              any Proceedings relating to the Agreement and/or this Transaction.

      4.      ACCOUNT DETAILS:

              Payments to Bank of America, N.A.:
                             USD
              NAME:          BANK OF AMERICA NA
              CITY:          NEW YORK
              ABA #:         026009593
              ATTN:          BOFAUS3N
              NAME:          BANK OF AMERICA NA
              CITY:          Charlotte
              ACCT:          6550219386
              ATTN:          RATE DERIVATIVE SETTLEMENTS
              ATTN:          BOFAUS6SGDS

              Payments to CWABS Asset-Backed Certificates, Series 2003-BC1
              c/o The Bank of New York

                                          USD
              NAME:                       THE BANK OF NEW YORK
              ABA #:                      021-000-018
              GLA #:                      111-565
              FFC TAS ACCT:  082255
              ATTN:                       Sean    O'Connell
                                          (212) 815-6312

      5.      OFFICES:
              The Office of Party A for this
              Transaction is:                                 Charlotte, NC

              Please send reset notices to fax no. (312-234-3603)

              The Office of Party B for this

                                      R-5
<PAGE>

              Transaction is:

      6.      GOVERNING LAW:              The Laws of the State of New York
                                          (without reference to the conflict of
                                          laws provisions thereof)

      7.      ADDITIONAL                  Notwithstanding the terms of Sections
              PROVISIONS:                 5 and 6 of the Master Agreement, the
                                          provisions of Sections 5(a)(ii),
                                          5(a)(iii), 5(a)(iv), 5(a)(v) and
                                          5(a)(vi) shall not apply to Party A or
                                          Party B.

       8.     TRANSFER, AMENDMENT         No transfer, amendment or assignment
              AND ASSIGNMENT:             of this Transaction shall be permitted
                                          by either party unless each of Moody's
                                          Investors Services, Inc. ("Moody's")
                                          and Standard & Poors Ratings Group, a
                                          Division of the McGraw-Hill Companies,
                                          Inc. ("S&P") has been provided notice
                                          of such transfer, amendment or
                                          assignment in writing.

       9.     PROCEEDINGS:                Party A shall not institute against or
                                          cause any other person to institute
                                          against, or join any other person in
                                          instituting against, Party B any
                                          bankruptcy, reorganization,
                                          arrangement, insolvency or liquidation
                                          proceedings, or other proceedings
                                          under any federal or state

                                      R-6
<PAGE>

                                          bankruptcy or similar law for a period
                                          of one year and one day following
                                          payment in full of the CWABS
                                          Asset-Backed Certificates, Series
                                          2003-BC1.

      10.      SET-OFF:                   The provisions for Set-off set forth
                                          in Section 6(e) of the Agreement shall
                                          not apply for purposes of this
                                          Transaction.

      11.      DOWNGRADE:                 If a Ratings Event (as defined below)
                                          occurs with respect to Party A, then
                                          Party A shall, at its own expense, (i)
                                          assign this Transactions hereunder to
                                          a third party within thirty (30) days
                                          of such Ratings Event that meets or
                                          exceeds, or as to which any applicable
                                          credit support provider meets or
                                          exceeds, the Approved Ratings
                                          Thresholds (as defined below) and that
                                          is approved by Party B on terms
                                          substantially similar to this
                                          Confirmation and (ii) deliver
                                          collateral, in an amount equal to the
                                          Exposure (as defined

                                      R-7
<PAGE>

                                          below), and an executed ISDA Credit
                                          Support Annex (satisfactory to Party
                                          B) within thirty (30) days of such
                                          Ratings Event and subject to S&P's and
                                          Moody's written confirmation that
                                          delivery of such collateral in the
                                          context of such downgrade will not
                                          result in a withdrawal, qualification
                                          or downgrade of the then current
                                          ratings assigned to the CWABS
                                          Asset-Backed Certificates Series
                                          2003-BC1 (the "Certificates"). For
                                          purposes of this Transaction, a
                                          "RATINGS EVENT" shall occur with
                                          respect to Party A, if short-term
                                          certificates of deposit cease to be
                                          rated at least "A-1" by S&P, and at
                                          least "P-1" by Moody's (including in
                                          connection with a merger,
                                          consolidation or other similar
                                          transaction by Party A) such ratings
                                          being referred to herein as the
                                          "APPROVED RATINGS THRESHOLDS." Only
                                          with respect to such Ratings Event,
                                          "EXPOSURE" shall mean the greater of
                                          the following: (i) the mark-to-market
                                          value of the Transaction as of the
                                          Valuation Date (as such

                                      R-8
<PAGE>

                                          term is defined in the ISDA Credit
                                          Support Annex); (ii) the amount of the
                                          next payment due under the Transaction
                                          and (iii) one percent of the Notional
                                          Amount for the respective Calculation
                                          Period.

12.      FINANCIAL INSTITUTION.           Party A is a "financial institution"
                                          within the meaning of the Federal
                                          Deposit Insurance Corporation
                                          Improvement Act of 1991 as
                                          supplemented by Regulation EE of the
                                          Federal Reserve Board.

13.      ELIGIBLE CONTRACT PARTICIPANT.   Party A is an "eligible contract
                                          participant" as such term is defined
                                          in Section 1a(12) of the Commodity
                                          Exchange Act, as amended."

              Please confirm that the foregoing correctly sets forth the terms
and conditions of our agreement by responding within three (3) Business Days by
returning via telecopier an executed copy of this Confirmation to the attention
of Global Derivative Operations at (fax no. (312) 234-3603).

                  Failure to respond within such period shall not affect the
         validity or enforceability of this Transaction, and shall be deemed to
         be an affirmation of the terms and conditions contained herein, absent
         manifest error.

                                      R-9
<PAGE>

Yours Sincerely,

Bank of America, N.A.

Authorized Signatory

Accepted and confirmed as of the date first written:

CWABS Asset-Backed Certificates, Series 2003-BC1
By The Bank of New York
Not in is individual capacity but solely as Trustee
For CWABS Asset-Backed Certificates, Series 2003-BC1

By:_____________ ________________

Name:______________________________

Title: _______________________________

Our Reference # 3017354

                                      R-10
<PAGE>

                          SCHEDULE OF NOTIONAL AMOUNTS

          (all such dates subject to adjustment in accordance with the
                            Business Day Convention)

                                                             APPLICABLE NOTIONAL
                                                             -------------------
FROM AND INCLUDING             TO BUT EXCLUDING                 AMOUNT (USD)
------------------             ----------------                 ------------

  Effective Date                                           [                  ]
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                               Termination Date            [                  ]

                                      R-11
<PAGE>

                                    EXHIBIT S

                 [FORM OF THE CAP CONTRACT ASSIGNMENT AGREEMENT]

                              ASSIGNMENT AGREEMENT

         ASSIGNMENT AGREEMENT, dated as of [_____________] ("Assignment
Agreement"), among COUNTRYWIDE HOME LOANS, INC. ("Assignor"), THE BANK OF NEW
YORK, not in an individual capacity but as Trustee for CWABS, Inc. Asset-Backed
Certificates, Series 2003-BC1 ("Assignee"), pursuant to a Pooling and Servicing
Agreement dated as of January 1, 2003 (the "Pooling and Servicing Agreement")
among CWABS, Inc., as depositor, Assignor, as seller, Countrywide Home Loans
Servicing LP, as master servicer, Assignee, as trustee, and BNY Western Trust
Company, as co-trustee, and BANK OF AMERICA, N.A. ("Remaining Party").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, effective as of [_________________], Assignor desires to
assign all of its rights and delegate all of its duties and obligations to
Assignee under that certain Transaction (the "Assigned Transaction") as
evidenced by the certain confirmation and agreement dated January 28, 2003 whose
reference number is [___________] (the "Confirmation and Agreement"), a copy of
which is attached hereto as Exhibit I;

         WHEREAS, Assignor and Remaining Party have executed and delivered the
Confirmation and Agreement in lieu of negotiating both an ISDA Master Agreement
(Multicurrency--Cross Border) form (the "ISDA Form Master Agreement") and a
Schedule thereto;

         WHEREAS, Assignee desires to accept the assignment of rights and assume
the delegation of duties and obligations of the Assignor under the Assigned
Transaction, including any modifications agreed to by the parties; and

         WHEREAS, Assignor desires to obtain the written consent of Remaining
Party to the assignment, delegation, and assumption and Remaining Party desires
to grant such consent in accordance with the terms hereof

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:

         1. ASSIGNMENT AND ASSUMPTION. Effective as of and from
[________________] (the "Effective Date"), Assignor hereby assigns all of its
rights and delegates all of its duties and

                                      S-1
<PAGE>

obligations to Assignee and Assignee hereby assumes all Assignor's rights,
duties, and obligations under the Assigned Transaction arising on or after the
Effective Date.

         2. RELEASE. Effective as of and from the Effective Date, Remaining
Party and Assignor hereby release one another from all duties and obligations
owed under and in respect of the Assigned Transaction, and Assignor hereby
terminates its rights under and in respect of the Assigned Transaction.

         3. LIMITATION ON LIABILITY. Assignor and Remaining Party agree to the
following: (a) the sole recourse in respect of the obligations of Assignee
hereunder and under the Assigned Transaction shall be to the Trust Fund (as
defined in the Pooling and Servicing Agreement); (b) The Bank of New York
("BONY") is entering into this Assignment Agreement solely in its capacity as
trustee and not in its individual capacity under the Pooling and Servicing
Agreement; and (c) in no case shall BONY (or any person acting as successor
trustee under the Pooling and Servicing Agreement) be personally liable for or
on account of any of the statements, representations, warranties, covenants or
obligations stated to be those of Assignor under the terms of the Assigned
Transaction, all such liability, if any, being expressly waived by Assignor and
Remaining Party and any person claiming by, through or under either such party.

         4. CONSENT AND ACKNOWLEDGMENT OF REMAINING PARTY. Remaining Party
hereby consents to the assignment and delegation by Assignor to Assignee of all
the rights, duties, and obligations of Assignor under the Assigned Transaction
pursuant to this Assignment Agreement. In addition, Remaining Party hereby
acknowledges that the responsibilities of Assignee under the Assigned
Transaction will be performed on its behalf by Countrywide Home Loans Servicing
LP, as master servicer under the Pooling and Servicing Agreement.

         5. REPRESENTATIONS. Each party hereby represents and warrants to the
other parties as follows:

         (a) It is duly organized, validly existing and in good standing under
         the laws of its organization or incorporation;

         (b) It has the power to execute and deliver this Assignment Agreement;
         and

         (c) Its obligations under this Assignment Agreement constitute its
         legal, valid and binding obligations, enforceable in accordance with
         their respective terms.

         Each of Assignor and Remaining Party represents that no event or
condition has occurred that constitutes an Event of Default, a Potential Event
of Default or, to the party's knowledge, a Termination Event (as such terms are
defined in the Confirmation and Agreement), with respect to the party, and no
such event would occur as a result of the party's entering into or performing
its obligations under this Assignment Agreement.

         6. INDEMNITY. Each of Assignor and Remaining Party hereby agrees to
indemnify and hold harmless Assignee with respect to any and all claims arising
under the Assigned

                                      S-2
<PAGE>

Transaction prior to the Effective Date. Each of Assignee (subject to the
limitations set forth in paragraph 3 above) and Remaining Party hereby agrees to
indemnify and hold harmless Assignor with respect to any and all claims arising
under the Assigned Transaction on or after the Effective Date.

         7. GOVERNING LAW. This Assignment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

         8. NOTICES For the purposes of this Assignment Agreement and Section
12(a) of the Assigned Transaction, the addresses for notices or communications
are as follows: (i) in the case of Assignor, Countrywide Home Loans, Inc., 4500
Park Granada, Calabasas, California 91302, Attention: Celia Coulter, with a copy
to the same address, Attention: Legal Department, or such other address as may
be hereafter furnished in writing to Assignee and Remaining Party; (ii) in the
case of Assignee, The Bank of New York, 101 Barclay Street - 8W, New York, New
York 10286, Attention: Corporate Trust MBS Administration, CWABS, Inc. Series
2003-BC1, or such other address as may be hereafter furnished in writing to
Assignor and Remaining Party; and (iii) in the case of Remaining Party, 233
South Wacker Drive, Suite 2800, Chicago, Illinois 60606, Attention: [DPC
Manager], facsimile (312) 234-3603, or such other address as may be hereafter
furnished in writing to Assignor and Assignee.

         9. PAYMENTS All payments remitted by Remaining Party under the Assigned
Transaction shall be made by wire transfer according to the following
instructions:

                  The Bank of New York
                  New York, NY
                  ABA # 021-000-018
                  GLA # 111-565
                  For Further Credit: [____________]
                  Attn:    Sean    O'Connell
                  (212) 815-6312

         10. COUNTERPARTS This Assignment Agreement may be executed and
delivered in counterparts (including by facsimile transmission), each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same instrument.

                                      S-3
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Assignment Agreement
as of the date first above written. COUNTRYWIDE HOME LOANS, INC.

                                                 By:____________________________
                                                 Name:  Celia Coulter
                                                 Title: Executive Vice President

                                                 THE BANK OF NEW YORK, not in an
                                                 individual capacity but as
                                                 Trustee for CWABS, Inc.,
                                                 Asset-Backed Certificates,
                                                 Series 2003-BC1

                                                 By:___________________________
                                                 Name:
                                                 Title:

                                                 BANK OF AMERICA, N.A.

                                                 By:___________________________
                                                 Name:
                                                 Title:

                                      S-4

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