Document:

EXHIBIT

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              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.,

                                    Depositor

                           DLJ MORTGAGE CAPITAL, INC.,

                                     Seller

                             CALMCO SERVICING L.P.,

                          Servicer and Special Servicer

                           OLD KENT MORTGAGE COMPANY,

                                    Servicer

                                       and

                            THE CHASE MANHATTAN BANK,

                                     Trustee
--------------------------------------------------------------------------------

                         POOLING AND SERVICING AGREEMENT

                          Dated as of February 1, 2001

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

               MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2001-HE8

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I
    DEFINITIONS................................................................5

    SECTION 1.01   DEFINITIONS.................................................5

    SECTION 1.02   INTEREST CALCULATIONS......................................39

    SECTION 1.03   ALLOCATION OF CERTAIN INTEREST SHORTFALLS..................39

ARTICLE II
    CONVEYANCE OF MORTGAGE LOANS;
    REPRESENTATIONS AND WARRANTIES............................................41

    SECTION 2.01   CONVEYANCE OF MORTGAGE LOANS...............................41

    SECTION 2.02   ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE LOANS............43

    SECTION 2.03   REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SERVICERS.44

    SECTION 2.04   REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AS TO THE
                   MORTGAGE LOANS.............................................47

    SECTION 2.05   DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
                   SUBSTITUTIONS..............................................47

    SECTION 2.06   EXECUTION AND DELIVERY OF CERTIFICATES.....................47

    SECTION 2.07   REMIC MATTERS..............................................48

    SECTION 2.08   COVENANTS OF EACH SERVICER.................................48

    SECTION 2.09   CONVEYANCE OF  REMIC REGULAR INTERESTS AND ACCEPTANCE OF
                   REMIC 1 BY THE TRUSTEE; ISSUANCE OF CERTIFICATES...........48

ARTICLE III

    ADMINISTRATION AND SERVICING
    OF MORTGAGE LOANS.........................................................50

    SECTION 3.01   SERVICERS TO SERVICE MORTGAGE LOANS........................50

                                        i

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    SECTION 3.02   SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF
                   SUBSERVICERS................................................5

    SECTION 3.03   NOTIFICATION OF ADJUSTMENTS................................52

    SECTION 3.04   TRUSTEE TO ACT AS SERVICER; THE SPECIAL SERVICER...........53

    SECTION 3.05   COLLECTION OF MORTGAGE LOANS; COLLECTION ACCOUNT;
                   CERTIFICATE ACCOUNT........................................53

    SECTION 3.06   ESTABLISHMENT OF AND DEPOSITS TO ESCROW ACCOUNTS; PERMITTED
                   WITHDRAWALS FROM ESCROW ACCOUNTS; PAYMENTS OF TAXES,
                   INSURANCE AND OTHER CHARGES; SIMPLE INTEREST EXCESS SUB-
                   ACCOUNTS; DEPOSITS IN SIMPLE INTEREST EXCESS SUB-ACCOUNTS..56

    SECTION 3.07   ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
                   THE MORTGAGE LOANS; INSPECTIONS............................59

    SECTION 3.08   PERMITTED WITHDRAWALS FROM THE COLLECTION ACCOUNTS AND
                   CERTIFICATE ACCOUNT........................................59

    SECTION 3.09   MAINTENANCE OF HAZARD INSURANCE; MORTGAGE IMPAIRMENT
                   INSURANCE AND PRIMARY INSURANCE POLICY; CLAIMS; RESTORATION
                   OF MORTGAGED PROPERTY......................................61

    SECTION 3.10   ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS
                    ..........................................................64

    SECTION 3.11   REALIZATION UPON DEFAULTED MORTGAGE LOANS; REPURCHASE OF
                   CERTAIN MORTGAGE LOANS.....................................66

    SECTION 3.12   TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES............69

    SECTION 3.13   DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF A SERVICER TO
                   BE HELD FOR THE TRUSTEE....................................70

    SECTION 3.14   SERVICING FEE..............................................71

    SECTION 3.15   ACCESS TO CERTAIN DOCUMENTATION............................71

    SECTION 3.16   ANNUAL STATEMENT AS TO COMPLIANCE..........................71

    SECTION 3.17   ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING STATEMENT;
                   FINANCIAL STATEMENTS.......................................72

    SECTION 3.18   MAINTENANCE OF FIDELITY BOND AND ERRORS AND OMISSIONS
                   INSURANCE..................................................72

                                       ii

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    SECTION 3.19   PREPAYMENT PREMIUMS........................................73

ARTICLE IV

    DISTRIBUTIONS AND
    ADVANCES BY THE SERVICERS.................................................74

    SECTION 4.01   ADVANCES BY THE SERVICER...................................74

    SECTION 4.02   PRIORITIES OF DISTRIBUTION.................................75

    SECTION 4.03   ALLOCATION OF LOSSES.......................................78

    SECTION 4.04   ...........................................................79

MONTHLY STATEMENTS TO CERTIFICATEHOLDERS......................................79

    SECTION 4.05   SERVICERS TO COOPERATE.....................................80

    SECTION 4.06   BASIS RISK RESERVE FUND....................................81

    SECTION 4.07   DISTRIBUTIONS ON THE REMIC REGULAR INTERESTS...............81

ARTICLE V

    THE CERTIFICATES..........................................................84

    SECTION 5.01   THE CERTIFICATES...........................................84

    SECTION 5.02   CERTIFICATE REGISTER; REGISTRATION OF TRANSFER AND EXCHANGE
                   OF CERTIFICATES............................................84

    SECTION 5.03   MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES..........89

    SECTION 5.04   PERSONS DEEMED OWNERS......................................89

    SECTION 5.05   ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES..89

    SECTION 5.06   MAINTENANCE OF OFFICE OR AGENCY............................90

ARTICLE VI

    THE DEPOSITOR, THE SELLER AND THE SERVICERS...............................91

                                       iii

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    SECTION 6.01   RESPECTIVE LIABILITIES OF THE DEPOSITOR, THE SELLER AND
                   THE SERVICERS .............................................91

    SECTION 6.02   MERGER OR CONSOLIDATION OF THE DEPOSITOR, THE SELLER OR
                   A SERVICER ................................................91

    SECTION 6.03   LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLER,
                   THE SERVICERS AND OTHERS...................................91

    SECTION 6.04   LIMITATION ON RESIGNATION OF A SERVICER....................92

ARTICLE VII

    DEFAULT...................................................................93

    SECTION 7.01   EVENTS OF DEFAULT..........................................93

    SECTION 7.02   TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR...................95

    SECTION 7.03   NOTIFICATION TO CERTIFICATEHOLDERS.........................95

ARTICLE VIII

    CONCERNING THE TRUSTEE....................................................97

    SECTION 8.01   DUTIES OF THE TRUSTEE......................................97

    SECTION 8.02   CERTAIN MATTERS AFFECTING THE TRUSTEE......................98

    SECTION 8.03   TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS......99

    SECTION 8.04   TRUSTEE MAY OWN CERTIFICATES..............................100

    SECTION 8.05   TRUSTEE'S FEES AND EXPENSES...............................100

    SECTION 8.06   ELIGIBILITY REQUIREMENTS FOR THE TRUSTEE..................100

    SECTION 8.07   RESIGNATION AND REMOVAL OF THE TRUSTEE....................101

    SECTION 8.08   SUCCESSOR TRUSTEE.........................................102

    SECTION 8.09   MERGER OR CONSOLIDATION OF THE TRUSTEE....................102

    SECTION 8.10   APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.............102

    SECTION 8.11   TAX MATTERS...............................................104

                                       iv

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    SECTION 8.12   PERIODIC FILINGS..........................................107

    SECTION 8.13   TRUST OBLIGATIONS.........................................107

    SECTION 8.14   DETERMINATION OF CERTIFICATE INDEX........................107

    SECTION 8.15   PROHIBITED TRANSACTIONS AND ACTIVITIES....................107

    SECTION 8.16   INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
                   REMIC STATUS..............................................108

ARTICLE IX

    TERMINATION..............................................................109

    SECTION 9.01   TERMINATION UPON LIQUIDATION OR PURCHASE OF THE MORTGAGE
                   LOANS.....................................................109

    SECTION 9.02   FINAL DISTRIBUTION ON THE CERTIFICATES....................109

    SECTION 9.03   ADDITIONAL TERMINATION REQUIREMENTS.......................110

ARTICLE X

    MISCELLANEOUS PROVISIONS.................................................112

    SECTION 10.01  AMENDMENT.................................................112

    SECTION 10.02  RECORDATION OF AGREEMENT; COUNTERPARTS....................113

    SECTION 10.03  GOVERNING LAW.............................................113

    SECTION 10.04  INTENTION OF PARTIES......................................114

    SECTION 10.05  NOTICES...................................................114

    SECTION 10.06  SEVERABILITY OF PROVISIONS................................115

    SECTION 10.07  ASSIGNMENT................................................115

    SECTION 10.08  LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS................115

    SECTION 10.09  CERTIFICATES NONASSESSABLE AND FULLY PAID.................116

    SECTION 10.10  PROTECTION OF ASSETS......................................116

                                       v

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                                    EXHIBITS

EXHIBIT A       Form of Senior Certificates
EXHIBIT B       Form of Subordinate Certificate
EXHIBIT C       Form of Residual Certificate
EXHIBIT D       Form of Notional Amount Certificate
EXHIBIT E       Form of Class P Certificate
EXHIBIT F       Form of Reverse Certificates
EXHIBIT G       Form of Initial Certification and Subsequent Certification of
                Trustee
EXHIBIT H       Form of Final Certification of Trustee
EXHIBIT I       Transfer Affidavit
EXHIBIT J       Form of Transferor Certificate
EXHIBIT K       Form of Investment Letter (Non-Rule 144A)
EXHIBIT L       Form of Rule 144A Letter
EXHIBIT M       Request for Release
EXHIBIT N       Officer's Certificate with Respect to Principal Prepayments
EXHIBIT P       Form of Servicer Report

SCHEDULE IA     Mortgage Loan Schedule for Mortgage Loans with August 31, 2000
                Representations and Warranties
SCHEDULE IB     Mortgage Loan Schedule for Mortgage Loans with Closing Date
                Representations and Warranties
SCHEDULE IIA    Representations and Warranties - DLJMC
SCHEDULE IIB    Representations and Warranties - Calmco
SCHEDULE IIC    Representations and Warranties - Old Kent
SCHEDULE IIIA   Representations and Warranties -Mortgage Loans

                                       vi

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     THIS POOLING AND SERVICING AGREEMENT, dated as of February 1, 2001, among
DLJ MORTGAGE ACCEPTANCE CORP., a Delaware corporation, as depositor (the
"Depositor"), DLJ MORTGAGE CAPITAL, INC., a Delaware corporation, as the Seller
(the "Seller"), CALMCO SERVICING L.P., a Delaware limited partnership, as a
servicer (in such capacity, a "Servicer") and as the special servicer (in such
capacity, the "Special Servicer"), OLD KENT MORTGAGE COMPANY, a Michigan
corporation, as a servicer (a "Servicer"), and THE CHASE MANHATTAN BANK, a
banking corporation organized under the laws of the State of New York, as
trustee (the "Trustee").

                                 WITNESSETH THAT

     In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

                              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 the Trust
Fund created hereunder. The Certificates will consist of eight classes of
certificates, designated as (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 B Certificates, (vi) the Class P Certificates, (vii) the Class X
Certificates and (viii) the Class R Certificates.

                                     REMIC 1
                                     -------

     As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Loan Group 1 Mortgage Loans, the
Loan Group 2 Mortgage Loans and certain other related assets subject to this
Agreement (exclusive of the Reserve Fund) 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 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal 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 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.

DESIGNATION   Uncertificated REMIC 1  Initial Uncertificated    Assumed Final
                Pass-Through Rate       Principal Balance     Maturity Date (1)
-----------   ----------------------- ----------------------  ----------------
LT1A                 Variable(2)            $118,420,032.88   February 25, 2031
LT1B                 Variable(2)              $1,042,220.00   February 25, 2031
LT1C                 Variable(2)                 $69,479.72   February 25, 2031
LT1D                 Variable(2)                 $54,375.02   February 25, 2031
LT1E                 Variable(2)                 $42,292.21   February 25, 2031
LT1F                 Variable(2)              $1,208,368.41   February 25, 2031
LT1G                 Variable(2)            $253,660,221.63   February 25, 2031
LT1H                 Variable(2)              $2,232,470.00   February 25, 2031

                                        1

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LT1I                 Variable(2)                $148,830.28   February 25, 2031
LT1J                 Variable(2)                $116,474.98   February 25, 2031
LT1K                 Variable(2)                 $90,592.79   February 25, 2031
LT1L                 Variable(2)              $2,588,371.17   February 25, 2031
-------------------
(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month following the month of the
     maturity date for the Mortgage Loan with the latest maturity date has been
     designated as the "latest possible maturity date" for each REMIC 1 Regular
     Interest.
(2)  Calculated in accordance with the definition of "Uncertificated REMIC 1
     Pass-Through Rate" herein.

                                        2

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                                     REMIC 2
                                     -------

     As provided herein, the Trustee shall make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2." The Class R-2 Interest represents the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.

     The following table sets forth (or describes) the Class designation,
Pass-Through Rate and Original Class Certificate Principal Balance for each
Class of Certificates which, except for the Class P Certificates and Class R
Certificates, represents one or more of the "regular interests" in REMIC 2
created hereunder:

                   Original Class
    Class      Certificate Principal      Pass-Through          Assumed Final
 Designation          Balance                 Rate             Maturity Date(1)
-------------- ----------------------   ----------------    -------------------
Class A-1         $104,222,000.00            6.49%           February 25, 2031
Class A-2         $223,247,000.00         Variable(2)        February 25, 2031
Class M-1         $21,831,000.00          Variable(2)        February 25, 2031
Class M-2         $17,085,000.00          Variable(2)        February 25, 2031
Class B           $13,288,500.00          Variable(2)        February 25, 2031
Class X           $229.09                 Variable(3)        February 25, 2031
Class P           $0.00                     N/A(4)           February 25, 2031
Class R           $50.00                  Variable(2)        February 25, 2031

(1)  Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
     regulations, the Distribution Date in the month following the month of the
     maturity date for the Mortgage Loan with the latest maturity date has been
     designated as the "latest possible maturity date" for each Class of
     Certificates that represents one or more of the "regular interests" in
     REMIC 2.
(2)  Calculated in accordance with the definition of "Pass-Through Rate" herein.
(3)  The Class X Certificates will accrue interest at their variable
     Pass-Through Rate on the Class X Notional Amount outstanding from time to
     time which shall equal the aggregate of the Uncertificated Principal
     Balances of the REMIC 1 Regular Interests. The Class X Certificates will
     not accrue interest on their Class Principal Balance.
(4)  The Class P Certificates will not accrue interest.

                                        3

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     Set forth below are designations of Classes of Certificates to the
categories used herein:

Book-Entry Certificates.........All Classes of Certificates other than the
                                Physical Certificates.

Class M Certificates............The Class M-1 and Class M-2 Certificates.

ERISA-Restricted Certificates...Residual Certificates, Class X Certificates and
                                Class P Certificates.

LIBOR Certificates..............Class A-2, Class R, Class M and Class B
                                Certificates.

Notional Amount Certificates....Class X Certificates.

Offered Certificates............All Classes of Certificates other than the
                                Private Certificates.

Private Certificates............Class P and Class X Certificates.

Physical Certificates...........Class R, Class P and Class X Certificates.

Rating Agencies.................Fitch, Moody's and S&P.

Regular Certificates............All Classes of Certificates other than the
                                Class R and Class P Certificates.

Residual Certificates...........Class R Certificates.

Senior Certificates.............Class A-1, Class A-2 and Class R Certificates.

Subordinate Certificates........Class M, Class B and Class X Certificates.

                                        4

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                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.01 DEFINITIONS.

     Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:

     ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.

     ACCRUAL PERIOD: For any interest bearing Class of Certificates, other than
the Class A-1 Certificates, and any Distribution Date, the period commencing on
the immediately preceding Distribution Date (or the Closing Date, in the case of
the first Accrual Period) and ending on the day immediately preceding the
related Distribution Date and for the Class A-1 Certificates and any
Distribution Date, the calendar month immediately preceding the related
Distribution Date.

     ADVANCE: The payment required to be made by a Servicer with respect to any
Distribution Date pursuant to Section 4.01.

     ADJUSTMENT DATE: With respect to each adjustable-rate Mortgage Loan, each
adjustment date on which the Mortgage Rate thereon changes pursuant to the
related Mortgage Note. The first Adjustment Date following the Cut-off Date as
to each such adjustable-rate Mortgage Loan is set forth in the Mortgage Loan
Schedule.

     AGGREGATE LOAN BALANCE: As of any date of determination will be equal to
the aggregate of the Stated Principal Balances of the Mortgage Loans as of the
last day of the prior month.

     AGGREGATE LOAN GROUP BALANCE: As to any Loan Group and as of any date of
determination will be equal to the aggregate of the Stated Principal Balances of
the Mortgage Loans in that Loan Group as of the last day of the prior month.

     AGREEMENT: This Pooling and Servicing Agreement and all amendments or
supplements hereto.

     ANCILLARY INCOME: All income derived from the Mortgage Loans, other than
Servicing Fees, including but not limited to, late charges, fees received with
respect to checks or bank drafts returned by the related bank for non-sufficient
funds, assumption fees, optional insurance administrative fees and all other
incidental fees and charges, including investment income on the applicable
Collection Account. Ancillary Income does not include any Prepayment Premiums.

     APPLIED LOSS AMOUNT: As to any Distribution Date, an amount equal to the
excess, if any of (i) the aggregate Class Principal Balance of the Certificates,
other than the Class X Certificates, after giving effect to all Realized Losses
incurred with respect to Mortgage Loans during the Due

                                        5

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Period for such Distribution Date and payments of principal on such Distribution
Date over (ii) the Aggregate Loan Balance for such Distribution Date.

     APPRAISED VALUE: The amount set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property.

     ASSIGNMENT AND ASSUMPTION AGREEMENT: That certain assignment and assumption
agreement dated as of February 1, 2001, by and between DLJMC, as assignor and
the Depositor, as assignee, relating to the Mortgage Loans.

     ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
transfer of the Mortgage.

     BALLOON LOAN: Any Mortgage Loan which, by its terms, does not fully
amortize the principal balance thereof by its stated maturity and thus requires
a payment at the stated maturity larger than the monthly payments due
thereunder.

     BANKRUPTCY CODE: The United States Bankruptcy Reform Act of 1978, as
amended.

     BASIS RISK RESERVE FUND: The separate Eligible Account created and
initially maintained by the Trustee pursuant to Section 4.07 in the name of the
Trustee for the benefit of the Certificateholders and designated "The Chase
Manhattan Bank in trust for registered holders of Credit Suisse First Boston
Mortgage Securities Corp., Mortgage Pass-Through Certificates, Series 2001-HE8."
Funds in the Basis Risk Reserve Fund shall be held in trust for the
Certificateholders for the uses and purposes set forth in this Agreement.

     BASIS RISK SHORTFALL: For any Class of LIBOR Certificates and any
Distribution Date, the sum of: (i) the excess, if any, of the related Current
Interest calculated on the basis of the lesser of (x) the Certificate Index plus
the applicable Certificate Margin and (y) the Maximum Interest Rate over the
related Current Interest for the applicable Distribution Date; (ii) any Basis
Risk Shortfall remaining unpaid from prior Distribution Dates; and (iii) 30 days
interest on the amount in clause (ii) calculated at a per annum rate equal to
the lesser of (x) the Certificate Index plus the applicable Certificate Margin
and (y) the Maximum Interest Rate.

     BOOK-ENTRY CERTIFICATES: As specified in the Preliminary Statement.

     B PRINCIPAL PAYMENT AMOUNT: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate Class Principal Balance of the Senior Certificates and the
aggregate Class Principal Balances of the Class M-1 and Class M-2 Certificates,
in each case, after giving effect to payments on such Distribution Date and (ii)
the Class Principal Balance of the Class B Certificates immediately prior to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 96.0%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

                                        6

<PAGE>

     BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in the City of New York, New York, or the city in
which the Corporate Trust Office of the Trustee is located, or savings and loan
institutions in the States of California, Illinois, Minnesota or Texas are
authorized or obligated by law or executive order to be closed.

     CALMCO: Calmco Servicing L.P., a Delaware limited partnership, and its
successors and assigns.

     CALMCO SERVICED LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

     CARRYFORWARD INTEREST: For any Class of Offered Certificates and
Distribution Date, the sum of (1) the amount, if any, by which (x) the sum of
(A) Current Interest for such Class for the immediately preceding Distribution
Date and (B) any unpaid Carryforward Interest from the immediately preceding
Distribution Date exceeds (y) the amount paid in respect of interest on such
Class on such immediately preceding Distribution Date, and (2) interest on such
amount for the related Accrual Period at the applicable Pass-Through Rate.

     CERTIFICATE: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.

     CERTIFICATE ACCOUNT: The separate Eligible Account created and maintained
with the Trustee, or any other bank or trust company acceptable to the Rating
Agencies which is incorporated under the laws of the United States or any state
thereof pursuant to Section 3.05, which account shall bear a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Trustee on behalf of the Certificateholders or any other account serving a
similar function acceptable to the Rating Agencies.

     CERTIFICATE BALANCE: With respect to any Certificate at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and, in the case
of any Subordinate Certificates, reduced by any Applied Loss Amounts allocated
to such Class on prior Distribution Dates pursuant to Section 4.03.

     CERTIFICATE INDEX: With respect to each Distribution Date, the rate for one
month United States dollar deposits quoted on Telerate Page 3750 as of 11:00
A.M., London time, on the related Interest Determination Date relating to each
Class of LIBOR Certificates. 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 LIBOR or comparable rates as
may be reasonably selected by the Trustee after consultation with Calmco), the
rate will be the Reference Bank Rate. If no such quotations can be obtained and
no Reference Bank Rate is available, the Certificate Index will be the
Certificate Index applicable to the preceding Distribution Date. On the Interest
Determination Date immediately preceding each Distribution Date, the Trustee
shall determine the Certificate Index for the Accrual Period commencing on such
Distribution Date and inform each Servicer of such rate.

                                        7

<PAGE>

     CERTIFICATE MARGIN: As to each Class of LIBOR Certificates, the applicable
amount set forth below:

            CLASS                      CERTIFICATE MARGIN
                                    (1)                   (2)
             A-2                   0.33%                 0.66%
             M-1                   0.70%                 1.05%
             M-2                   1.05%                 1.55%
              B                    2.40%                 2.90%
              R                    0.33%                 0.66%
----------------
(1)  Prior to the Optional Termination Date.
(2)  On and after the Optional Termination Date.

     CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Book-Entry Certificate.

     CERTIFICATE REGISTER: The register maintained pursuant to Section 5.02.

     CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, 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 Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
necessary to effect such consent has been obtained; provided, however, that if
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for purposes of any provision 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
the Preliminary Statement.

     CLASS PRINCIPAL BALANCE: With respect to any Class and as to any date of
determination, the aggregate of the Certificate Balances of all Certificates of
such Class as of such date.

     CLASS R CERTIFICATE: The Class R Certificate executed by the Trustee, and
authenticated and delivered by the Trustee, evidencing the ownership of the
Class R-1 Interest and the Class R-2 Interest.

     CLASS R-1 INTEREST: The uncertificated Residual Interest in REMIC 1.

     CLASS R-2 INTEREST: The uncertificated Residual Interest in REMIC 2.

                                        8

<PAGE>

     CLASS X DISTRIBUTABLE AMOUNT: With respect to any Distribution Date, the
amount of interest accrued during the related Accrual Period at the related
Pass-Through Rate on the Class X Notional Amount for such Distribution Date.

     CLASS X NOTIONAL AMOUNT: Immediately prior to any Distribution Date, with
respect to the Class X Certificates, an amount equal to the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interests.

     CLOSING DATE: March 8, 2001.

     CODE: The Internal Revenue Code of 1986, as the same may be amended from
time to time (or any successor statute thereto).

     COLLECTION ACCOUNT: The accounts established and maintained by a Servicer
in accordance with Section 3.05.

     COMPENSATING INTEREST PAYMENT: For any Servicer and Distribution Date,
the lesser of (i) the Servicing Fee received by such Servicer for such
Distribution Date and (ii) the aggregate Prepayment Interest Shortfall for such
Mortgage Loans serviced by such Servicer for the related Prepayment Period.

     CORPORATE TRUST OFFICE: The designated office of the Trustee in the State
of New York at which 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 450 West 33rd Street, 14th Floor, New
York, New York 10001.

     CORRESPONDING CERTIFICATE: With respect to (i) REMIC 1 Regular Interest
LT1B, (ii) REMIC 1 Regular Interest LT1H, (iii) REMIC 1 Regular Interest LT1C
and REMIC 1 Regular Interest LT1I, (iv) REMIC 1 Regular Interest LT1D and REMIC
1 Regular Interest LT1J and (v) REMIC 1 Regular Interest LT1E and REMIC 1
Regular Interest LT1K, (i) the Class A-1 Certificates, (ii) Class A-2
Certificates, (iii) Class M-1 Certificates, (iv) Class M-2 Certificates and (v)
Class B Certificates, respectively.

     CUMULATIVE NET LOSSES: As to any date of determination and with respect to
each Mortgage Loan, other than any Special Serviced Mortgage Loan, deemed to be
a Liquidated Mortgage Loan on or prior to the last day of the preceding Due
Period, the amount by which the aggregate principal balance of, and accrued
interest on, such Liquidated Mortgage Loan exceeds the Net Liquidation Proceeds
for such Mortgage Loan allocated to principal and accrued interest.

     CURRENT INTEREST: For any interest bearing Class of Offered Certificates
and Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Class Principal Balance, or Class X Notional
Amount, as applicable, of such Class during the related Accrual Period;
provided, that if and to the extent that on any Distribution Date the Interest
Remittance Amount is less than the aggregate distributions required pursuant to
Section 4.02(a)(i)A-E without regard to this proviso, then the Current Interest
on each Class will be reduced, on a PRO RATA basis in proportion to the amount
of Current Interest for each Class without regard to this proviso, by the

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lesser of (i) the amount of the deficiency described above in this proviso and
(ii) the Interest Shortfall for such Distribution Date.

     CURTAILMENT: Any payment of principal on a Mortgage Loan, made by or on
behalf of the related Mortgagor, other than a Scheduled Payment, a prepaid
Scheduled Payment or a Payoff, which is applied to reduce the outstanding Stated
Principal Balance of the Mortgage Loan.

     CUSTODIAN: Any one of Bank One Trust Company, N.A., a national banking
association, or its successor in interest, U.S. Bank Trust National Association,
a trust company chartered under the laws of the United States of America, or its
successor in interest, Bankers Trust Company of California, N.A., a national
banking association, or its successor in interest, or The Chase Manhattan Bank,
a New York banking corporation, or its successors in interest, each as the
context so requires.

     CUSTODIAL AGREEMENT: Those certain custodial agreements, each dated as of
the date hereof, among the applicable Custodian, the Trustee, the Seller and the
Servicers.

     CUT-OFF DATE: February 1, 2001.

     CUT-OFF DATE POOL PRINCIPAL BALANCE: $379,663,729.09.

     CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.

     DEFECTIVE MORTGAGE LOAN: Any Mortgage Loan which is required to be
repurchased pursuant to Section 2.02 or 2.03.

     DEFERRED AMOUNT: For any Class of Subordinate Certificates (other than the
Class X Certificates) and Distribution Date, will equal the amount by which (x)
the aggregate of the Applied Loss Amounts previously applied in reduction of the
Class Principal Balance thereof exceeds (y) the aggregate of amounts previously
paid in reimbursement thereof.

     DEFINITIVE CERTIFICATES: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).

     DELETED MORTGAGE LOAN: As defined in Section 2.03.

     DELINQUENCY RATE: For any month will be, generally, the fraction, expressed
as a percentage, the numerator of which is the aggregate outstanding principal
balance of all Mortgage Loans 60 or more days delinquent (including all
foreclosures, bankruptcies and REO Properties) as of the close of business on
the last day of such month, and the denominator of which is the Aggregate Loan
Balance as of the close of business on the last day of such month.

     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.

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<PAGE>

     DEPOSITOR: Credit Suisse First Boston Mortgage Securities Corp., a Delaware
corporation, or its successor in interest.

         DEPOSITORY: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as 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 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: As to any Distribution Date and any Mortgage Loan, the
Business Day immediately preceding the related Servicer Remittance Date.

     DISTRIBUTION DATE: The 25th day of each month or if such day is not a
Business Day, the first Business Day thereafter, in each case commencing in
March 2001.

     DISQUALIFIED ORGANIZATION: A "disqualified organization" under Section 860E
of the Code, which as of the Closing Date is any of: (i) the United States, any
State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (ii) any organization (other than a cooperative described in Section
521 of the Code) which 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, (iii) any organization described in Section 1381(a)(2)(C) of the Code,
(iv) an "electing large partnership" within the meaning of Section 775 of the
Code or (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel provided by nationally recognized counsel to the Trustee that the
holding of an ownership interest in a Class R Certificate by such Person may
cause the Trust Fund or any Person having an ownership interest in any Class of
Certificates (other than such Person) to incur liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the transfer
of an ownership interest in the Class R Certificate to such Person. A
corporation will not be treated as an instrumentality of the United States or of
any state or political subdivision thereof, if all of its activities are subject
to tax and, a majority of its board of directors is not selected by a
governmental unit. The term "United States", "State" and "international
organizations" shall have the meanings set forth in Section 7701 of the Code.

     DLJMC: DLJ Mortgage Capital, Inc., a Delaware corporation, and its
successors and assigns.

     DUE DATE: With respect to each Mortgage Loan and any Distribution Date, the
date on which Scheduled Payments on such Mortgage Loan are due which is either
the first day of the month of such Distribution Date, or if Scheduled Payments
on such Mortgage Loan are due on a day other than the first day of the month,
the first day of the calendar month in which such Scheduled Payments are due,
exclusive of any days of grace.

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<PAGE>

     DUE PERIOD: With respect to any Distribution Date, the period commencing on
the second day of the month preceding the month in which such Distribution Date
occurs and ending on the first day of the month in which such Distribution Date
occurs.

     ELIGIBLE ACCOUNT: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt obligations of such holding company) have been
rated by each Rating Agency in its highest short-term rating category, or (iii)
a segregated trust account or accounts (which shall be a "special deposit
account") maintained with the Trustee or any other federal or state chartered
depository institution or trust company, acting in its fiduciary capacity, in a
manner acceptable to the Trustee and the Rating Agencies. Eligible Accounts may
bear interest.

     ELIGIBLE INVESTMENTS: Any one or more of the obligations and securities
listed below:

          (i) direct obligations of, and obligations fully guaranteed by, the
     United States of America, or any agency or instrumentality of the United
     States of America the obligations of which are backed by the full faith and
     credit of the United States of America; or obligations fully guaranteed by,
     the United States of America; the FHLMC, FNMA, the Federal Home Loan Banks
     or any agency or instrumentality of the United States of America rated Aa3
     or higher by Moody's;

          (ii) federal funds, demand and time deposits in, certificates of
     deposits of, or bankers' acceptances issued by, any depository institution
     or trust company incorporated or organized under the laws of the United
     States of America or any state thereof and subject to supervision and
     examination by federal and/or state banking authorities, so long as at the
     time of such investment or contractual commitment providing for such
     investment the commercial paper or other short-term debt obligations of
     such depository institution or trust company (or, in the case of a
     depository institution or trust company which is the principal subsidiary
     of a holding company, the commercial paper or other short-term debt
     obligations of such holding company) are rated in the highest ratings by
     each Rating Agency, and the long-term debt obligations of such depository
     institution or trust company (or, in the case of a depository institution
     or trust company which is the principal subsidiary of a holding company,
     the long-term debt obligations of such holding company) are rated in one of
     two of the highest ratings, by each Rating Agency;

          (iii) repurchase obligations with a term not to exceed 30 days with
     respect to any security described in clause (i) above and entered into with
     a depository institution or trust company (acting as a principal) the
     short-term debt obligations of which are rated A-1 or higher by S&P rated
     A-2 or higher by Moody's and F-1+ or higher by Fitch; provided, however,
     that collateral transferred pursuant to such repurchase obligation must be
     of the type described in clause (i) above and must (A) be valued daily at
     current market price plus

                                       12

<PAGE>

     accrued interest, (B) pursuant to such valuation, be equal, at all times,
     to 105% of the cash transferred by the Trustee in exchange for such
     collateral, and (C) be delivered to the Trustee or, if the Trustee is
     supplying the collateral, an agent for the Trustee, in such a manner as to
     accomplish perfection of a security interest in the collateral by
     possession of certificated securities;

          (iv) securities bearing interest or sold at a discount issued by any
     corporation incorporated under the laws of the United States of America or
     any state thereof which has a long-term unsecured debt rating in the
     highest available rating category of Moody's, and a short-term unsecured
     debt rating of A-1 or higher by S&P and F-1+ or higher by Fitch, at the
     time of such investment;

          (v) commercial paper having an original maturity of less than 365 days
     and issued by an institution having a short-term unsecured debt rating in
     the highest available rating category by each Rating Agency, at the time of
     such investment;

          (vi) a guaranteed investment contract approved by each of the Rating
     Agencies and issued by an insurance company or other corporation having a
     long-term unsecured debt rating in the highest available rating category of
     Moody's, and a short-term unsecured debt rating of A-1 or higher by S&P and
     F-1+ or higher by Fitch, at the time of such investment; and

          (vii) money market funds having ratings in the highest available
     rating category of Moody's and either "AAAm" or "AAAm-G" of S&P at the time
     of such investment (any such money market funds which provide for demand
     withdrawals being conclusively deemed to satisfy any maturity requirements
     for Eligible Investments set forth herein) including money market funds of
     the Servicer or the Trustee and any such funds that are managed by the
     Servicer or the Trustee or their respective Affiliates or for the Servicer
     or the Trustee or any Affiliate of either acts as advisor, as long as such
     money market funds satisfy the criteria of this subparagraph (vii);

provided, however, that no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and 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.

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

     ERISA-RESTRICTED CERTIFICATE: As specified in the Preliminary Statement.

     ERISA-QUALIFYING UNDERWRITING: With respect to any ERISA-Restricted
Certificate, a best efforts or firm commitment underwriting or private placement
that meets the requirements of Prohibited Transaction Exemption 2000-58, 65 Fed.
Reg. 67765 (2000), as amended (or any

                                       13

<PAGE>

successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor (an "Underwriter's Exemption").

     ERRORS AND OMISSIONS INSURANCE POLICY: An errors and omissions insurance
policy to be maintained by each Servicer pursuant to Section 3.18.

     ESCROW ACCOUNT: The separate account or accounts created and maintained by
each Servicer pursuant to Section 3.06.

     ESCROW PAYMENTS: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, mortgage insurance premiums, fire and hazard
insurance premiums, and any other payments required to be escrowed by the
Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or any
other related document.

     EVENT OF DEFAULT: As defined in Section 7.01.

     EXPENSE FEE: As to each Mortgage Loan, the sum of the related Servicing
Fee, the GEMICO PMI Fee, if applicable and any other Primary Insurance Policy
premium, if applicable.

     EXPENSE FEE RATE: As to each Mortgage Loan, the sum of the related
Servicing Fee Rate and the GEMICO PMI Fee Rate and any other Primary Insurance
Policy premium, if applicable.

     FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.

     FHLMC: 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.

     FIDELITY BOND: A fidelity bond to be maintained by each Servicer pursuant
to Section 3.18.

     FIRREA: The Financial Institutions Reform, Recovery and Enforcement Act of
1989.

     FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date in February 2031.

     FITCH: Fitch, Inc. or its successor in interest. For purposes of Section
10.05(b) the address for notices to Fitch shall be Fitch, Inc., One State Street
Plaza, 32nd Floor, New York, New York 10004, or such other address as Fitch may
hereafter furnish to the Depositor, each Servicer and the Trustee.

     FNMA: 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.

     FNMA GUIDES: The FNMA Sellers' Guide and the FNMA Servicers' Guide and all
amendments or additions thereto.

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<PAGE>

     FORECLOSURE RESTRICTED LOAN: Any Mortgage Loan that is 60 or more days
delinquent as of the Closing Date, unless the Mortgage Loan has become current
for three consecutive Scheduled Payments after the Closing Date.

     FORMULA RATE: For any Distribution Date and the LIBOR Certificates, the
lesser of (i) LIBOR plus the related Certificate Margin and (ii) the related
Maximum Interest Rate.

     GEMICO PMI FEE: As to each GEMICO PMI Mortgage Loan and any Distribution
Date, an amount equal to one month's interest at the GEMICO PMI Fee Rate on the
Stated Principal Balance of such GEMICO PMI Mortgage Loan as of the Due Date in
the month of such Distribution Date (prior to giving effect to any Scheduled
Payments due on such GEMICO PMI Mortgage Loan on such Due Date).

     GEMICO PMI FEE RATE: With respect to each GEMICO PMI Mortgage Loan, the per
annum rate equal to 0.79%.

     GEMICO PMI MORTGAGE LOAN: Those Mortgage Loans identified on the Mortgage
Loan Schedule as to which the GEMICO PMI Policy provides coverage.

     GEMICO PMI POLICY: The mortgage guaranty insurance policy issued by General
Electric Mortgage Insurance Corporation, attached hereto as Exhibit O.

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

     INDEX: With respect to each adjustable-rate Mortgage Loan and with respect
to each related Adjustment Date, the index as specified in the related Mortgage
Note.

     INDIRECT PARTICIPANT: A broker, dealer, bank or other financial institution
or other Person that clears through or maintains a custodial relationship with a
Depository Participant.

     INSOLVENCY PROCEEDING: As defined in Section 4.04(h).

     INSURANCE POLICY: With respect to any Mortgage Loan included in the Trust
Fund, any Primary Insurance Policy, the GEMICO PMI Policy, any standard hazard
insurance policy, flood insurance policy or title insurance policy, including
all riders and endorsements thereto in effect, including any replacement policy
or policies for any Insurance Policies.

     INSURANCE PROCEEDS: Proceeds of any primary mortgage guaranty insurance
policies and any other Insurance Policies with respect to the Mortgage Loans, to
the extent such proceeds are not applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with the
Servicer's normal servicing procedures.

                                       15

<PAGE>

     INTEREST DETERMINATION DATE: With respect to the LIBOR Certificates and for
each Accrual Period, the second LIBOR Business Day preceding the commencement of
such Accrual Period.

     INTEREST RATE: With respect to each REMIC Interest, the applicable rate set
forth or calculated in the manner described in the Preliminary Statement.

     INTEREST REMITTANCE AMOUNT: For any Distribution Date, an amount equal to
the sum of (1) all interest collected (other than Payaheads and Simple Interest
Excess, if applicable) or advanced in respect of Scheduled Payments on the
Mortgage Loans during the related Due Period, the interest portion of Payaheads
previously received and intended for application in the related Due Period and
the interest portion of all Payoffs and Curtailments received on the Mortgage
Loans during the related Prepayment Period, less (x) the Servicing Fees with
respect to such Mortgage Loans and (y) unreimbursed Advances and other amounts
due to a Servicer with respect to such Mortgage Loans, to the extent allocable
to interest, (2) all Compensating Interest Payments paid by each Servicer with
respect to the Mortgage Loans with respect to such Distribution Date, (3) the
portion of any Substitution Adjustment Amount or Repurchase Price paid with
respect to such Mortgage Loans during the calendar month immediately preceding
the Distribution Date allocable to interest, (4) all Net Liquidation Proceeds,
and any Insurance Proceeds and other recoveries (net of unreimbursed Advances,
Servicing Advances and expenses, to the extent allocable to interest, and unpaid
Servicing Fees) collected with respect to the Mortgage Loans during the prior
calendar month, to the extent allocable to interest and (5) any amounts
withdrawn from the Simple Interest Excess Sub-Account to pay interest on the
Certificates with respect to such Distribution Date. If on any Determination
Date the amount deposited into the Collection Account with respect to
Compensating Interest is the amount calculated in clause (ii) of the definition
of Compensating Interest Payment for such Distribution Date, any remaining
Servicing Fee shall be available to cover any Net Simple Interest Shortfalls
remaining on such Distribution Date, after giving effect to the withdrawal from
the Simple Interest Excess Sub-Account pursuant to Section 3.06(g) on such
Determination Date.

     INTEREST SHORTFALL: For any Distribution Date, an amount equal to the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rate) on Mortgage Loans resulting from (a) Prepayment Interest
Shortfalls to the extent not covered by a Compensating Interest Payment and (b)
interest payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Soldiers' and Sailors' Civil Relief Act of 1940.

     LAST SCHEDULED DISTRIBUTION DATE: With respect to each Class of
Certificates, the Distribution Date in February 2031.

     LATEST POSSIBLE MATURITY DATE: The Distribution Date in the month following
the month of the scheduled maturity date of the Mortgage Loan having the latest
scheduled maturity date as of the Cut-off Date.

     LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the State of New York or in the city of
London, England are required or authorized by law to be closed.

                                       16

<PAGE>

     LIQUIDATED MORTGAGE LOAN: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has determined (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan, including the final disposition of the related REO Property.

     LIQUIDATION PROCEEDS: Amounts, including Insurance Proceeds, received in
connection with the partial or complete liquidation of defaulted 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.

     LOAN GROUP: Any of Loan Group 1 or Loan Group 2, as applicable.

     LOAN GROUP 1: All Mortgage Loans identified as Loan Group 1 Mortgage Loans
on the Mortgage Loan Schedule.

     LOAN GROUP 1 MARKER RATE: With respect to the Class X Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1
Regular Interest LT1E and REMIC 1 Regular Interest LTF, with the rate on REMIC 1
Regular Interest LT1B subject to a cap equal to (a) in the case of a
Distribution Date prior to the Optional Termination Date, 6.49% or (b) in the
case of a Distribution Date on and after the Optional Termination Date, 6.99%,
with the rate on REMIC 1 Regular Interest LT1C subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-1 Certificates
and (ii) the related Maximum Interest Rate for the purpose of this calculation,
with the rate on REMIC 1 Regular Interest LT1D subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-2 Certificates
and (ii) the related Maximum Interest Rate for the purpose of this calculation,
with the rate on REMIC 1 Regular Interest LT1E subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class B Certificates and
(ii) the related Maximum Interest Rate for the purpose of this calculation, and
with the rate on REMIC 1 Regular Interest LT1F subject to a cap of zero for the
purpose of this calculation.

     LOAN GROUP 1 SENIOR CERTIFICATES: Class A-1 Certificates.

     LOAN GROUP 2: All Mortgage Loans identified as Loan Group 2 Mortgage Loans
on the Mortgage Loan Schedule.

     LOAN GROUP 2 MARKER RATE: With respect to the Class X Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 1 Pass-Through Rates for REMIC 1 Regular Interest
LT1H, REMIC 1 Regular Interest LT1I, REMIC 1 Regular Interest LT1J, REMIC 1
Regular Interest LT1K and REMIC 1 Regular Interest LT1L, with the rate on REMIC
1 Regular Interest LT1H subject to a cap equal to the lesser of (i) LIBOR plus
the Certificate Margin of the Class A-2 Certificates and (ii) the related
Maximum Interest Rate for the purpose of this calculation, with the rate on
REMIC 1 Regular Interest LT1I subject to a cap equal to the lesser of (i) LIBOR
plus the Certificate Margin of the Class M-1 Certificates and (ii) the

                                       17

<PAGE>

related Maximum Interest Rate for the purpose of this calculation, with the rate
on REMIC 1 Regular Interest LT1J subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-2 Certificates and (ii) the
related Maximum Interest Rate for the purpose of this calculation, with the rate
on REMIC 1 Regular Interest LT1K subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class B Certificates and (ii) the
related Maximum Interest Rate for the purpose of this calculation, and with the
rate on REMIC 1 Regular Interest LT1L subject to a cap of zero for the purpose
of this calculation.

     LOAN GROUP 2 SENIOR CERTIFICATES: Class A-2 Certificates.

     LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan and as to any date
of determination, the fraction (expressed as a percentage) the numerator of
which is the sum of the principal balance of the related Mortgage Loan at such
date of determination, and the denominator of which is (a) in the case of a
purchase, the lesser of the selling price of the related Mortgaged Property and
the Appraised Value of the related Mortgaged Property, or (b) in the case of a
refinance, the amount set forth in an appraisal made in connection with the
refinancing of the related Mortgaged Loan as the value of the related Mortgaged
Property.

     LOST MORTGAGE NOTE: Any Mortgage Note the original of which was permanently
lost or destroyed and has not been replaced.

     M-1 PRINCIPAL PAYMENT AMOUNT: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate Class Principal Balance of the Senior Certificates after giving
effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-1 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 80.00% and (ii) the
Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by
which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii)
0.50% of the Aggregate Loan Balance as of the Cut-off Date.

     M-2 PRINCIPAL PAYMENT AMOUNT: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the sum of (i)
the aggregate Class Principal Balance of the Senior Certificates and the Class
Principal Balance of the Class M-1 Certificates, in each case, after giving
effect to payments on such Distribution Date and (ii) the Class Principal
Balance of the Class M-2 Certificates immediately prior to such Distribution
Date exceeds (y) the lesser of (A) the product of (i) 89.00% and (ii) the
Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by
which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii)
0.50% of the Aggregate Loan Balance as of the Cut-off Date.

     MAJORITY IN INTEREST: As to any Class of Regular Certificates, the Holders
of Certificates of such Class evidencing, in the aggregate, at least 51% of the
Percentage Interests evidenced by all Certificates of such Class.

     MAXIMUM INTEREST RATE: With respect to the Class A-2 Certificates and any
Distribution Date, an annual rate equal to the weighted average of the Maximum
Mortgage Rates of the

                                       18

<PAGE>

adjustable-rate mortgage loans in Loan Group 2 minus the weighted average
Expense Fee Rate for such Loan Group. With respect to the Subordinate
Certificates and any Distribution Date, an annual rate equal to the weighted
average of the Maximum Mortgage Rates of all the adjustable-rate mortgage loans
minus the weighted average Expense Fee Rate for such Mortgage Loans and the Net
Mortgage Rates of all the fixed-rate mortgage loans.

     MAXIMUM MORTGAGE RATE: With respect to each Mortgage Loan having an
adjustable-rate Mortgage Rate, the percentage set forth in the related Mortgage
Note as the maximum Mortgage Rate thereunder.

     MAXIMUM UNCERTIFICATED ACCRUED INTEREST DEFERRAL AMOUNT: With respect to
any Distribution Date, the excess of (a) the sum of (X) accrued interest at the
Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular Interest
LT1F for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1F plus (Y) accrued interest at
the Uncertificated REMIC 1 Pass-Through Rate applicable to REMIC 1 Regular
Interest LT1L for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1L minus (Z) the
REMIC 1 Overcollateralization Amount, in each case for such Distribution Date,
over (b) Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1B with
the rate on REMIC 1 Regular Interest LT1B subject to a cap equal to (X) in the
case of a Distribution Date prior to the Optional Termination Date, 6.49%, or
(Y) in the case of a Distribution Date on and after the Optional Termination
Date, 6.99%, Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1C
with the rate on REMIC 1 Regular Interest LT1C subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-1 Certificates
and (ii) the related Maximum Interest Rate for the purpose of this calculation,
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1D with the rate
on REMIC 1 Regular Interest LT1D subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-2 Certificates and (ii) the
related Maximum Cap Rate for the purpose of this calculation, Uncertificated
Accrued Interest on REMIC 1 Regular Interest LT1E with the rate on REMIC 1
Regular Interest LT1E subject to a cap equal to the lesser of (i) LIBOR plus the
Certificate Margin of the Class B Certificates and (ii) the Maximum Interest
Rate for the purpose Uncertificated Accrued Interest on REMIC 1 Regular Interest
LT1H with the rate on REMIC 1 Regular Interest LT1G subject to a cap equal to
the lesser of (i) LIBOR plus the Certificate Margin of the Class A-2
Certificates and (ii) the related Maximum Interest Rate for the purpose of this
calculation, Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1I
with the rate on REMIC 1 Regular Interest LT1I subject to a cap equal to the
lesser of (i) LIBOR plus the Certificate Margin of the Class M-1 Certificates
and (ii) the related Maximum Cap Rate for the purpose of this calculation,
Uncertificated Accrued Interest on REMIC 1 Regular Interest LT1J with the rate
on REMIC 1 Regular Interest LT1J subject to a cap equal to the lesser of (i)
LIBOR plus the Certificate Margin of the Class M-2 Certificates and (ii) the
related Maximum Cap Rate for the purpose of this calculation for such
Distribution Date, and Uncertificated Accrued Interest on REMIC 1 Regular
Interest LT1K with the rate on REMIC 1 Regular Interest LT1K subject to a cap
equal to the lesser of (i) LIBOR plus the Certificate Margin of the Class B
Certificates and (ii) the Maximum Interest Rate for the purpose of this
calculation. MINIMUM MORTGAGE RATE: With respect to each Mortgage Loan having an
adjustable-rate Mortgage Rate, the percentage set forth in the related Mortgage
Note as the minimum Mortgage Rate thereunder.

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     MONTHLY EXCESS CASHFLOW: For any Distribution Date, an amount equal to the
sum of the Monthly Excess Interest and Overcollateralization Release Amount, if
any, for such date.

     MONTHLY EXCESS INTEREST: As to any Distribution Date, the Interest
Remittance Amount remaining after the application of payments pursuant to
clauses A. through F. of Section 4.02(a)(i) and the Principal Payment Amount
remaining after the application of payments pursuant to clauses A. through E. of
Section 4.02(a)(ii) or 4.02(a)(iii), as applicable.

     MONTHLY STATEMENT: The statement delivered to the Certificateholders
pursuant to Section 4.05.

     MOODY'S: Moody's Investors Service, Inc., or any successor thereto. For
purposes of Section 10.05(b) the address for notices to Moody's shall be Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:
Residential Pass-Through Monitoring, or such other address as Moody's may
hereafter furnish to the Depositor, each Servicer and the Trustee.

     MORTGAGE: The mortgage, deed of trust or other instrument creating a first
lien on an estate in fee simple or leasehold interest in real property securing
a Mortgage Note.

     MORTGAGE FILE: The Mortgage documents listed in Section 2.01(b) hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.

     MORTGAGE LOANS: Such 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.

     MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time to time
amended by the Seller to reflect the addition of Qualified Substitute Mortgage
Loans and the purchase of Mortgage Loans pursuant to Section 2.02 or 2.03)
transferred to the Trustee as part of the Trust Fund and from time to time
subject to this Agreement, attached hereto as Schedule I, setting forth the
following information with respect to each Mortgage Loan by Loan Group:

          (i)     the Mortgage Loan identifying number;

          (ii)    the Mortgagor's name;

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

          (iv) a code indicating the type of Mortgaged Property and the
     occupancy status;

          (v)     the original months to maturity;

          (vi)    a code indicating the Loan-to-Value Ratio at origination;

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          (vii) the Mortgage Rate as of the Cut-off Date;

          (viii) the stated maturity date;

          (ix) the amount of the Scheduled Payment as of the Cut-off Date;

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

          (xi) the principal balance of the Mortgage Loan as of the close of
     business on the Cut-off Date, after deduction of payments of principal due
     on or before the Cut-off Date whether or not collected;

          (xii) a code indicating whether the Mortgage Loan is a GEMICO PMI
     Mortgage Loan;

          (xiii) the purpose of the Mortgage Loan (i.e., purchase, rate and term
     refinance, equity take-out refinance);

          (xiv) a code indicating whether a Prepayment Premium is required to be
     paid in connection with a prepayment of the Mortgage Loan and the amount of
     the Prepayment Premium;

          (xv) whether such Mortgage Loan is a Calmco Serviced Loan or an Old
     Kent Serviced Loan and an indication whether the Mortgage Loan accrues
     interest at an adjustable Mortgage Rate or a fixed Mortgage Rate and
     whether such Mortgage Loan is a Simple Interest Mortgage Loan;

          (xvi) the Index that is associated with such Mortgage Loan, if
     applicable;

          (xvii) the Gross Margin, if applicable;

          (xviii) the Periodic Rate Cap, if applicable;

          (xix) the Minimum Mortgage Rate, if applicable;

          (xx) the Maximum Mortgage Rate, if applicable;

          (xxi) the first Adjustment Date after the Cut-off Date, if applicable;
     and

          (xxii) a code indicating if the Mortgage Loan is a Foreclosure
     Restricted Loan.

     With respect to the Mortgage Loans in the aggregate, each Mortgage Loan
Schedule shall set forth the following information, as of the Cut-off Date:

          (xxiii) the number of Mortgage Loans;

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          (xxiv) the current aggregate principal balance of the Mortgage Loans
     as of the close of business on the Cut-off Date, after deduction of
     payments of principal due on or before the Cut-off Date whether or not
     collected;

          (xxv) the weighted average Mortgage Rate of the Mortgage Loans; and

          (xxvi) a field indicating the applicable Custodian as of the Closing
     Date.

     MORTGAGE NOTE: The original executed note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

     MORTGAGE POOL: All of the Mortgage Loans.

     MORTGAGE RATE: The annual rate of interest borne by a Mortgage Note.

     MORTGAGED PROPERTY: The underlying real property securing a Mortgage Loan.

     MORTGAGOR: The obligor(s) on a Mortgage Note.

     NET EXCESS SPREAD: With respect to any Distribution Date and Loan Group, a
fraction, expressed as a percentage, the numerator of which is equal to the
excess of (x) the aggregate Stated Principal Balance for such Distribution Date
of the Mortgage Loans in that Loan Group, multiplied by the Net WAC Rate for
such Loan Group over (y) the Interest Remittance Amount for such Loan Group for
such Distribution Date, and the denominator of which is an amount equal to the
Aggregate Loan Group Balance for such Distribution Date of the Mortgage Loans in
such Loan Group, multiplied by the actual number of days elapsed in the related
Accrual Period divided by 360.

     NET FUNDS CAP: As to any Distribution Date and Loan Group, will be a per
annum rate equal to (a) a fraction, expressed as a percentage, the numerator of
which is the product of (1) the Optimal Interest Remittance Amount for such date
and Loan Group and (2) 12, and the denominator of which is the applicable
Aggregate Loan Group Balance immediately preceding such Distribution Date,
multiplied by (b) a fraction, the numerator of which is 30 and the denominator
of which is the actual number of days in the related Accrual Period.

     NET LIQUIDATION PROCEEDS: Liquidation Proceeds, net of (1) unreimbursed,
reasonable out-of-pocket expenses and (2) unreimbursed Servicing Fees, Servicing
Advances and Advances.

     NET MORTGAGE RATE: As to each Mortgage Loan, and at any time, the per annum
rate equal to the Mortgage Rate less the related Expense Fee Rate.

     NET SIMPLE INTEREST EXCESS: As of any Distribution Date, the excess, if
any, of the aggregate amount of Simple Interest Excess over the amount of Simple
Interest Shortfall.

     NET SIMPLE INTEREST SHORTFALL: As of any Distribution Date, the excess, if
any, of the aggregate amount of Simple Interest Shortfall over the amount of
Simple Interest Excess.

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<PAGE>

     NET WAC RATE: As to any Distribution Date and Loan Group, a rate equal to
the weighted average of the Net Mortgage Rates on the Mortgage Loans in such
Loan Group for the related Due Period, weighted on the basis of the Stated
Principal Balances as of the first day of the related Due Period.

     NONRECOVERABLE ADVANCE: With respect to any Mortgage Loan, any portion of
an Advance or Servicing Advance previously made or proposed to be made by the
applicable Servicer that, in the good faith judgment of the applicable Servicer,
will not be ultimately recoverable by the Servicer from the related Mortgagor,
related Liquidation Proceeds or otherwise.

     NOTIONAL AMOUNT CERTIFICATES: As specified in the Preliminary Statement.

     OFFERED CERTIFICATES: As specified in the Preliminary Statement.

     OFFICER'S CERTIFICATE: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President or the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Servicer or any certificate
of any Servicing Officer, and delivered to the Depositor or the Trustee, as the
case may be, as required by this Agreement.

     OLD KENT: Old Kent Mortgage Company, a Michigan corporation, and its
successors and assigns.

     OLD KENT SERVICED LOANS: The Mortgage Loans identified as such on the
Mortgage Loan Schedule.

     OPINION OF COUNSEL: A written opinion of counsel, who may be counsel for
the Depositor or a Servicer, including in-house counsel, reasonably acceptable
to the Trustee; provided, however, that with respect to the interpretation or
application of the REMIC Provisions, such counsel must (i) in fact be
independent of the Depositor and any Servicer, (ii) not have any material direct
financial interest in the Depositor or the Servicer or in any affiliate of
either, and (iii) not be connected with the Depositor or the Servicer as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions. The cost of any Opinion of Counsel, except as
otherwise specifically provided herein, shall not be at the expense of the
Trustee.

     OPTIMAL INTEREST REMITTANCE AMOUNT: For any Distribution Date and Loan
Group, the excess of (i) the product of (1) (x) the weighted average of the
Mortgage Rates of the Mortgage Loans in such Loan Group as of the first day of
the related Due Period less the weighted average Expense Fee Rate divided by (y)
12 and (2) the applicable Aggregate Loan Group Balance for the immediately
preceding Distribution Date, over (ii) any expenses that reduce the Interest
Remittance Amount that did not arise as a result of a default or delinquency of
the Mortgage Loans in the related Loan Group.

     OPTIONAL TERMINATION: The termination of the trust created hereunder in
connection with the purchase of the Mortgage Loans pursuant to Section 9.01.

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<PAGE>

     OPTIONAL TERMINATION DATE: The first Distribution Date on which Calmco may
exercise its right to terminate the Trust Fund pursuant to Section 9.01.

     OTS: The Office of Thrift Supervision.

     OUTSOURCER: As defined in Section 3.02.

     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 Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a Payoff
prior to such Due Date and which did not become a Liquidated Mortgage Loan prior
to such Due Date.

     OVERCOLLATERALIZATION AMOUNT: For any Distribution Date, an amount equal to
the amount, if any, by which (x) the Aggregate Loan Balance for such
Distribution Date exceeds (y) the aggregate Class Principal Balance of the
Offered Certificates after giving effect to payments on such Distribution Date.

     OVERCOLLATERALIZATION RELEASE AMOUNT: For any Distribution Date, an amount
equal to the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the amount, if any, by which (1) the Overcollateralization Amount
for such date, calculated for this purpose on the basis of the assumption that
100% of the aggregate of the Principal Remittance Amount for such date is
applied on such date in reduction of the aggregate of the Class Principal
Balances of the Certificates, exceeds (2) the Targeted Overcollateralization
Amount for such date.

     OWNERSHIP INTEREST: As to any Residual 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.

     PASS-THROUGH RATE: With respect to the Class A-1 Certificates, a per annum
rate equal to (i) for any Distribution Date prior to the Optional Termination
Date, 6.49% or (ii) for any Distribution date on and after the Optional
Termination Date, 6.99%. With respect to the Class A-2 Certificates and the
Class R Certificates and any Distribution Date, a per annum rate equal to the
lesser of (x) the related Formula Rate for such Distribution Date and (y) the
related Net Funds Cap for such Distribution Date. With respect to the
Subordinate Certificates and any Distribution Date, a per annum rate equal to
the lesser of (x) the related Formula Rate for such Distribution Date and (y)
the Weighted Average Net Funds Cap for that Distribution Date. With respect to
the Class X Certificates and any Distribution Date, a per annum rate equal to
the percentage equivalent of a fraction, the numerator of which is the sum of
the amounts calculated pursuant to clauses (A)

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through (L) below, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1
Regular Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest
LT1I, REMIC 1 Regular Interest LT1J, REMIC 1 Regular Interest LT1K and REMIC 1
Regular Interest LT1L. For purposes of calculating the Pass-Through Rate for the
Class X Certificates, the numerator is equal to the sum of the following
components:

          (A)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1A minus the Loan Group 1 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1A;

          (B)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1B minus the Loan Group 1 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1B;

          (C)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1C minus the Loan Group 1 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1C;

          (D)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1D minus the Loan Group 1 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1D;

          (E)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1E minus the Loan Group 1 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1E;

          (F)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1F minus the Loan Group 1 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1F;

          (G)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1G minus the Loan Group 2 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1G;

          (H)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1H minus the Loan Group 2 Marker Rate, applied to an
               amount

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<PAGE>

               equal to the Uncertificated Principal Balance of REMIC 1 Regular
               Interest LT1H;

          (I)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1I minus the Loan Group 2 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1I;

          (J)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1J minus the Loan Group 2 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1J;

          (K)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1K minus the Loan Group 2 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1K; and

          (L)  the Uncertificated REMIC 1 Pass-Through Rate for REMIC 1 Regular
               Interest LT1L minus the Loan Group 2 Marker Rate, applied to an
               amount equal to the Uncertificated Principal Balance of REMIC 1
               Regular Interest LT1L.

     PAYAHEAD: Any Scheduled Payment intended by the related Mortgagor to be
applied in a Due Period subsequent to the Due Period in which such payment was
received.

     PAYOFF: Any payment of principal on a Mortgage Loan equal to the entire
outstanding principal balance of such Mortgage Loan, if received in advance of
the last scheduled Due Date for such Mortgage Loan and accompanied by an amount
of interest equal to accrued unpaid interest on the Mortgage Loan to the date of
such payment-in-full.

     PERCENTAGE INTEREST: As to any Certificate, either the percentage set forth
on the face thereof or equal to the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of the same Class.

     PERMITTED TRANSFEREE: Any person other than a Disqualified Organization or
a Person that is not a citizen or resident of the United States, a corporation,
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, or an estate whose
income from sources without the United States is includible in gross income for
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 the authority to control
all substantial decisions of the trust unless such Person has furnished the
transferor and the Trustee with a duly completed Internal Revenue Service Form
W-8ECI. The terms "United States" and "State" shall have the meanings set forth
in section 7701 of the Code or successor provisions.

                                       26

<PAGE>

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

     PHYSICAL CERTIFICATES: As specified in the Preliminary Statement.

     PMI SUB-ACCOUNT: The trust account titled "Chase Manhattan Bank Trust
Company, National Association, in trust for the holders of Credit Suisse First
Boston Mortgage Securities Corp., Mortgage Pass-Through Certificates, Series
2001-HE8."

     PREFERENCE CLAIM: As defined in Section 4.04(f).

     PREPAYMENT INTEREST SHORTFALL: As to any Distribution Date, Mortgage Loan
and Principal Prepayment, other than Payoffs on Calmco Serviced Loans that occur
during the portion of the Prepayment Period that is in the same calendar month
as the Distribution Date, the difference between (i) one full month's interest
at the applicable Mortgage Rate, as reduced by the Servicing Fee Rate on the
outstanding principal balance of such Mortgage Loan immediately prior to such
prepayment and (ii) the amount of interest due and actually received from the
related Mortgagor that accrued during the month immediately preceding such
Distribution Date with respect to such Mortgage Loan in connection with such
Principal Prepayment.

     PREPAYMENT PREMIUM: With respect to each Mortgage Loan, the prepayment
charge or penalty interest required to be paid by the Mortgager in connection
with a prepayment of the related Mortgage Loan, as provided in the related
Mortgage Note or Mortgage, and as specified on the Mortgage Loan Schedule.

     PREPAYMENT PERIOD: With respect to each Distribution Date and any Old Kent
Serviced Loan, the calendar month preceding the month in which the related
Distribution Date occurs. With respect to any Distribution Date and any
principal prepayment in full received on a Calmco Serviced Loan, the period from
the fifteenth day of the calendar month preceding the month in which such
Distribution Date occurs (or in the case of the first distribution date, from
the cut-off date) through the fourteenth day of the month in which such
Distribution Date occurs. With respect to any Distribution Date and any partial
principal prepayment received on a Calmco Serviced Loan, the calendar month
preceding such Distribution Date.

     PRIMARY INSURANCE POLICY: Each policy of primary mortgage guaranty
insurance or any replacement policy therefor with respect to any Mortgage Loan.

     PRINCIPAL ONLY CERTIFICATES. As specified in the Preliminary Statement.

     PRINCIPAL PAYMENT AMOUNT: For any Distribution Date, an amount equal to the
Principal Remittance Amount for such date minus the Overcollateralization
Release Amount, if any, for such date.

     PRINCIPAL PREPAYMENT: Any payment of principal on a Mortgage Loan which
constitutes a Payoff or Curtailment.

                                       27

<PAGE>

     PRINCIPAL REMITTANCE AMOUNT: For any Distribution Date, an amount equal to
the sum of (1) all principal collected (other than Payaheads) or advanced in
respect of Scheduled Payments on the Mortgage Loans during the related Due
Period (less unreimbursed Advances, Servicing Advances and other amounts due to
each Servicer with respect to the Mortgage Loans, to the extent allocable to
principal) and the principal portion of Payaheads previously received and
intended for application in the related Due Period, (2) all Principal
Prepayments on the Mortgage Loans received during the related Prepayment Period,
(3) the outstanding principal balance of each Mortgage Loan that was repurchased
by the Seller, Calmco or the Class X Certificateholder during the calendar month
immediately preceding such Distribution Date, (4) the portion of any
Substitution Adjustment Amount paid with respect to any Deleted Mortgage Loans
during the calendar month immediately preceding such Distribution Date allocable
to principal and (5) all Net Liquidation Proceeds, and any Insurance Proceeds
and other recoveries (net of unreimbursed Advances, Servicing Advances and other
expenses, to the extent allocable to principal) collected with respect to the
Mortgage Loans during the prior calendar month, to the extent allocable to
principal.

     PRIVATE CERTIFICATES: As specified in the Preliminary Statement.

     PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated March 6, 2001
relating to the Offered Certificates.

     PUD: Planned Unit Development.

     QUALIFIED INSURER: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a FNMA- or
FHLMC-approved mortgage insurer or having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.

     QUALIFIED SUBSTITUTE 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 M
(i) have a Stated Principal Balance, after deduction of the principal portion of
the Scheduled Payment due in the month of substitution (or, in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate Stated Principal Balance), not in excess of, and not more than 10%
less than the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; (v) if the Deleted Mortgage Loan is an adjustable-rate
Mortgage Loan, have a Maximum Mortgage Rate and Minimum Mortgage Rate not less
than the respective rates for the Deleted Mortgage Loan, have a Gross Margin
equal to or greater than the Deleted Mortgage Loan and have the same Index as
the Deleted Mortgage Loan and (vi) comply with each representation and warranty
set forth in Section 2.03(b).

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<PAGE>

     RATING AGENCY: Each of the Rating Agencies specified in the Preliminary
Statement. If any such organization or a successor is no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating
organization, or other comparable Person, as is designated by the Depositor,
notice of which designation shall be given to the Trustee and the Servicers.
References herein to a given rating or rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.

     RATINGS: As of any date of determination, the ratings, if any, of the
Certificates as assigned by the Rating Agencies.

     REALIZED LOSS: With respect to each Liquidated Mortgage 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 the Liquidated Mortgage Loan as of the date of such liquidation, plus
(ii) interest at the Net Mortgage Rate from the related Due Date as to which
interest was last paid or advanced (and not reimbursed) to Certificateholders up
to the related Due Date in the month in which Liquidation Proceeds are required
to be distributed on the Stated Principal Balance of such Liquidated Mortgage
Loan from time to time, minus (iii) the Net Liquidation Proceeds, if any,
received during the month in which such liquidation occurred, to the extent
applied as recoveries of interest at the Net Mortgage Rate and to principal of
the Liquidated Mortgage Loan.

     RECORD DATE: With respect to the Class A-1 Certificates and any Class of
Physical Certificates and any Distribution Date, the last day of the calendar
month preceding the month in which such Distribution Date occurs. With respect
to any Class of LIBOR Certificates that is not a Physical Certificate and any
Distribution Date, the Business Day immediately preceding such Distribution
Date; provided, however, that following the date on which Definitive
Certificates for a Class of LIBOR Certificates are available pursuant to Section
5.02, the Record Date shall be the last day of the calendar month preceding the
month in which such Distribution Date occurs. The preceding sentences
notwithstanding, with respect to the first Distribution Date and all Classes of
Certificates, the Record Date shall be March 9, 2001.

     REFERENCE BANK RATE: As to any Accrual Period relating to the LIBOR
Certificates as follows: the arithmetic mean (rounded upwards, if necessary, to
the nearest one sixteenth of a percent) of the offered rates for United States
dollar deposits for one month which are offered by the Reference Banks as of
11:00 A.M., London time, on the Interest Determination Date prior to the first
day of such Accrual Period to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Class
Principal Balance of the LIBOR Certificates; 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 of the rates quoted by one or
more major banks in New York City, selected by the Trustee after consultation
with Calmco, 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 aggregate Class Principal Balance of the LIBOR
Certificates. If no such quotations can be obtained, the Reference Bank Rate
shall be the Reference Bank Rate applicable to the preceding Accrual Period.

                                       29

<PAGE>

     REFERENCE BANKS: Three major banks that are engaged in the London interbank
market, selected by the Trustee after consultation with Calmco.

     REGULAR CERTIFICATES: As specified in the Preliminary Statement.

     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.

     REMIC 1: 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 as
from time to time are subject to this Agreement (other than any Prepayment
Premiums), 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
Primary Insurance Policy, required to be maintained pursuant to this Agreement
and any proceeds thereof and, (iv) the Collection Account and the Certificate
Account (subject to the last sentence of this definition) and such assets that
are deposited therein from time to time and any investments thereof.
Notwithstanding the foregoing, however, a REMIC election will not be made with
respect to the Basis Risk Reserve Fund.

     REMIC 1 LOAN GROUP 1 INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Loan Group 1 Mortgage Loans and related REO
Properties then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through
Rate for REMIC 1 Regular Interest LT1A minus the Loan Group 1 Marker Rate,
divided by (b) 12.

     REMIC 1 LOAN GROUP 2 INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Stated Principal Balance of the Loan Group 2 Mortgage Loans and related REO
Properties then outstanding and (ii) the Uncertificated REMIC 1 Pass-Through
Rate for REMIC 1 Regular Interest LT1G minus the Loan Group 2 Marker Rate,
divided by (b) 12.

     REMIC 1 TARGETED OVERCOLLATERALIZATION AMOUNT: 1% of the Targeted
Overcollateralization Amount.

     REMIC 1 OVERCOLLATERALIZATION AMOUNT: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 1 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1
Regular Interest LT1H, REMIC 1 Regular Interest LT1I, REMIC 1 Regular Interest
LT1J and REMIC 1 Regular Interest LT1K, in each case as of such date of
determination.

     REMIC 1 LOAN GROUP 1 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 Loan Group

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1 Mortgage Loans and related REO Properties then outstanding and (ii) 1 minus a
fraction, the numerator of which is two times the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1D and REMIC 1 Regular
Interest LT1E, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
LT1E and REMIC 1 Regular Interest LT1F.

     REMIC 1 LOAN GROUP 2 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 Loan Group 2 Mortgage Loans and related REO Properties
then outstanding and (ii) 1 minus a fraction, the numerator of which is two
times the aggregate of the Uncertificated Principal Balances of REMIC 1 Regular
Interest LT1H, REMIC 1 Regular Interest LT1I, REMIC 1 Regular Interest LT1J and
REMIC 1 Regular Interest LT1K, and the denominator of which is the aggregate of
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1H, REMIC 1
Regular Interest LT1I, REMIC 1 Regular Interest LT1J, REMIC 1 Regular Interest
LT1K and REMIC 1 Regular Interest LT1L.

     REMIC 1 REGULAR INTEREST LT1A: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1B: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1C: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1D: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

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     REMIC 1 REGULAR INTEREST LT1E: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1E shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1F: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1F shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1G: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1G shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1H: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1H shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1I: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1I shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1J: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1J shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through 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 Principal Balance as set forth in the Preliminary Statement
hereto.

     REMIC 1 REGULAR INTEREST LT1K: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1PI shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through

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<PAGE>

Rate in effect from time to time, and shall be entitled to any amounts
distributed to REMIC 1 Regular Interest LT1PI.

     REMIC 1 REGULAR INTEREST LT1L: One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1PII shall accrue
interest at the related Uncertificated REMIC 1 Pass-Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1PII.

     REMIC 1 REGULAR INTERESTS: REMIC 1 Regular Interest LT1A, REMIC 1 Regular
Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest LT1D,
REMIC 1 Regular Interest LT1E, REMIC 1 Regular Interest LT1F, REMIC 1 Regular
Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest LT1I,
REMIC 1 Regular Interest LT1J, REMIC 1 Regular Interest LT1K and REMIC 1 Regular
Interest LT1L.

     REMIC 2: The segregated pool of assets consisting of all of the REMIC 1
Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Class R Certificates (in respect of
the Class R-2 Interest), pursuant to Article II hereunder, and all amounts
deposited therein, with respect to which a separate REMIC election is to be
made.

     REMIC PROVISIONS: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.

     REMIC REGULAR INTERESTS: The REMIC 1 Regular Interests.

     REO PROPERTY: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.

     REPURCHASE PRICE: With respect to any Mortgage Loan required to be
purchased by the Seller pursuant to this Agreement or purchased at the option of
Calmco or the holder of the Class X Certificates pursuant to this Agreement, an
amount equal to the sum of (i) 100% of the unpaid principal balance of the
Mortgage Loan on the date of such purchase, and (ii) accrued and unpaid interest
thereon at the applicable Mortgage Rate (reduced by the Servicing Fee Rate if
the purchaser of the Mortgage Loan is also the Servicer thereof) from the date
through which interest was last paid by the Mortgagor to the Due Date in the
month in which the Repurchase Price is to be distributed to Certificateholders.

     REQUEST FOR RELEASE: The Request for Release submitted by a Servicer to the
Custodian on behalf of the Trustee, substantially in the form of Exhibit M.

     REQUIRED BASIS RISK RESERVE FUND DEPOSIT: With respect to any Distribution
Date on which the Net Excess Spread is less than 0.25%, the excess of (i) the
greater of (a) $15,000 and (b) product of 0.50% and the Aggregate Loan Balance
over (ii) the amount of funds on deposit in the Basis Risk

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<PAGE>

Reserve Fund prior to deposits thereto on such Distribution Date. With respect
to any Distribution Date on which the Net Excess Spread is equal to or greater
than 0.25%, the excess of (i) $5,000 over (ii) the amount of funds on deposit in
the Basis Risk Reserve Fund prior to deposits thereto on such Distribution Date.

     REQUIRED BASIS RISK RESERVE FUND AMOUNT: With respect to any Distribution
Date on which the Net Excess Spread is less than 0.25%, the greater of (a)
$15,000 and (b) the product of 0.50% and the Aggregate Loan Balance. With
respect to any Distribution Date on which the Net Excess Spread is equal to or
greater than 0.25%, $5,000.

     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.

     RESIDUAL CERTIFICATES: As specified in the Preliminary Statement.

     RESPONSIBLE OFFICER: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or any other officer or employee 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 matter is referred
because of such officer's or employee's knowledge of and familiarity with the
particular subject and in each case who shall have direct responsibility for the
administration of this Agreement.

     ROLLING THREE MONTH DELINQUENCY RATE: For any Distribution Date will be the
fraction, expressed as a percentage, equal to the average of the Delinquency
Rates for each of the three (or one and two, in the case of the first and second
Distribution Dates) immediately preceding months.

     SAIF: The Savings Association Insurance Fund, or any successor thereto.

     S&P: Standard & Poor's Ratings Agency, a division of The McGraw-Hill
Companies, Inc. For purposes of Section 10.05(b) the address for notices to S&P
shall be Standard & Poor's, 55 Water Street, New York, New York 10041,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Depositor, the Servicers and the Trustee.

     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
pursuant to the terms of the related Mortgage Note.

     SECURITIES ACT: The Securities Act of 1933, as amended.

     SELLER: DLJMC.

     SENIOR CERTIFICATES: As specified in the Preliminary Statement.

     SENIOR ENHANCEMENT PERCENTAGE: For any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the sum of the aggregate
Class Principal Balance of the Class M-1, Class M-2 and Class B Certificates and
the Overcollateralization Amount (which, for purposes

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<PAGE>

of this definition only, shall not be less than zero), in each case after giving
effect to payments on such Distribution Date (assuming no Trigger Event has
occurred), and the denominator of which is the Aggregate Loan Balance for such
Distribution Date.

     SENIOR PRINCIPAL PAYMENT AMOUNT: For any Distribution Date on or after the
Stepdown Date and as long as a Trigger Event has not occurred with respect to
such Distribution Date, will be the amount, if any, by which (x) the Class
Principal Balance of the Senior Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 68.50% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

     SERVICER: Calmco or Old Kent, or their successors in interest, as
applicable.

     SERVICER EMPLOYEE: As defined in Section 3.18.

     SERVICER REMITTANCE DATE: With respect to any Mortgage Loan and
Distribution Date, the 18th day of the month in which such Distribution Date
occurs (or if such 18th day is not a Business Day, the first Business Day
immediately following).

     SERVICING ADVANCE: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost (including reasonable
attorneys' fees and disbursements) of (i) the preservation, restoration and
protection of a Mortgaged Property, (ii) any expenses reimbursable to the
Servicer pursuant to Section 3.11 and any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of any REO Property
(including default management and similar services, appraisal services and real
estate broker services); (iv) any expenses incurred by the Servicer in
connection with obtaining an environmental inspection or review pursuant to the
second paragraph of Section 3.11(a) and (v) compliance with the obligations
under Section 3.09.

     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 as of the Due Date in the month of such
Distribution Date (prior to giving effect to any Scheduled Payments due on such
Mortgage Loan on such Due Date), subject to reduction as provided in Section
3.14.

     SERVICING FEE RATE: With respect to any Mortgage Loan, 0.50% per annum.

     SERVICING OFFICER: With respect to each Servicer, any officer of that
Servicer involved in, or responsible for, the administration and servicing of
the related Mortgage Loans whose name and specimen signature appear on a list of
servicing officers furnished to the Trustee by such Servicer on the Closing Date
pursuant to this Agreement, as such list may from time to time be amended and
delivered to the Trustee.

     SIMPLE INTEREST EXCESS: As of any Distribution Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) the portion of the monthly
payment received from the Mortgagor for

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<PAGE>

such Mortgage Loan allocable to interest with respect to the related Due Period,
over (ii) 30 days' interest on the Stated Principal Balance of such Mortgage
Loan at the Mortgage Rate.

     SIMPLE INTEREST EXCESS SUB-ACCOUNT: The sub-account of the Collection
Account established by the Servicer pursuant to Section 3.06(f). The Simple
Interest Excess Sub-Account shall be an Eligible Account.

     SIMPLE INTEREST MORTGAGE LOAN: Any Mortgage Loan for which the interest due
thereon is calculated based on the actual number of days elapsed between the
date on which interest was last paid through the date on which the most current
payment is received.

     SIMPLE INTEREST QUALIFYING LOAN: As of any Determination Date, any Simple
Interest Mortgage Loan that was neither prepaid in full during the related Due
Period, nor delinquent with respect to a payment that became due during the
related Due Period as of the close of business on the Determination Date
following such Due Period.

     SIMPLE INTEREST SHORTFALL: As of any Distribution Date for each Simple
Interest Qualifying Loan, the excess, if any, of (i) 30 days' interest on the
Stated Principal Balance of all such Mortgage Loans at the Mortgage Rate, over
(ii) the portion of the monthly payment received from the Mortgagor for such
Mortgage Loan allocable to interest with respect to the related Due Period.

     SIXTY DAY DELINQUENCY AMOUNT: For any Due Period, the aggregate of the
principal balances of all Calmco Serviced Loans, with respect to Calmco, or Old
Kent Serviced Loans, with respect to Old Kent, other than Special Serviced
Loans, that are 60 or more days delinquent, in foreclosure or 60 or more days
delinquent and in bankruptcy or converted to REO Property as of the end of such
Due Period.

     SIXTY DAY PLUS ROLLING AVERAGE: With respect to any Distribution Date, the
average of the applicable Sixty Day Delinquency Amounts for each of the six
immediately preceding Due Periods (or, prior to the sixth Due Period, the total
number of Due Periods since the Initial Cut-off Date), expressed as a percentage
of the aggregate Stated Principal Balance of the Calmco Serviced Loans, or Old
Kent Serviced Loans, as applicable, other than Special Serviced Mortgage Loans,
as of the applicable Cut-off Date.

     SPECIAL SERVICED MORTGAGE LOAN: Any Mortgage Loan the servicing of which is
transferred to Calmco pursuant to Section 3.04 after the Closing Date.

     STARTUP DAY: The Closing Date.

     STATED PRINCIPAL BALANCE: As to any Mortgage Loan and Due Date, the unpaid
principal balance of such Mortgage Loan as of such Due Date as specified in the
amortization schedule at the time relating thereto (before any adjustment to
such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous Curtailments and Liquidation
Proceeds allocable to principal (other than with respect to any Liquidated
Mortgage Loan) and to the payment of principal due on such Due Date and
irrespective of any delinquency in payment by the related Mortgagor.

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     STEPDOWN DATE: The date occurring on the later of (x) the Distribution Date
in March 2004 and (y) the first Distribution Date on which the Senior
Enhancement Percentage (calculated for this purpose after giving effect to
payments or other recoveries in respect of the Mortgage Loans during the related
Due Period but before giving effect to payments on the Certificates on such
Distribution Date) is greater than or equal to 31.50%.

     SUBORDINATE CERTIFICATES: As specified in the Preliminary Statement.

     SUBORDINATE COMPONENT BALANCE: For any Distribution Date and Loan Group,
the excess of the Aggregate Loan Group Balance for such Distribution Date and
Loan Group over the aggregate Class Principal Balance of the related Class or
Classes of Class A Certificates immediately prior to such Distribution Date.

     SUBSERVICER: Any Subservicer which is subservicing any of the Mortgage
Loans pursuant to a Subservicing Agreement. Any subservicer shall meet the
qualifications set forth in Section 3.02.

     SUBSERVICING AGREEMENT: An agreement between a Servicer and a Subservicer
for the servicing of the related Mortgage Loans.

     SUBSTITUTION ADJUSTMENT AMOUNT: As defined in Section 2.03.

     TARGETED OVERCOLLATERALIZATION AMOUNT: For any Distribution Date prior to
the Stepdown Date, 2.00% of the Aggregate Loan Balance as of the Cut-off Date;
with respect to any Distribution Date on or after the Stepdown Date and with
respect to which a Trigger Event has not occurred, the greater of (a) 4.00% of
the Aggregate Loan Balance for such Distribution Date, or (b) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date; with respect to any Distribution
Date on or after the Stepdown Date with respect to which a Trigger Event has
occurred and is continuing, the Targeted Overcollateralization Amount for the
Distribution Date immediately preceding such Distribution Date; provided,
however, that the Targeted Overcollateralization Amount shall not exceed the
aggregate Class Principal Balance of the Certificates.

     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, the Tax Matters Person shall be the
Trustee.

     TAX MATTERS PERSON CERTIFICATE: The Class R Certificate with a Denomination
of $0.05.

     TELERATE PAGE 3750: The display designated as page 3750 on Bridge Telerate
Service (or such other page as may replace page 3750 on that service for the
purpose of displaying London interbank offered rates of major banks).

     TRANSFER: Any direct or indirect transfer or sale of any Ownership Interest
in a Residual Certificate.

     TRANSFEREE: Any Person who is acquiring by Transfer any Ownership Interest
in a Residual Certificate.

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<PAGE>

     TRIGGER EVENT: A Trigger Event will occur for any Distribution Date if the
Rolling Three Month Delinquency Rate as of the last day of the related Due
Period equals or exceeds 48% of the Senior Enhancement Percentage for such
Distribution Date.

     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 after the Cut-off Date, other than such amounts which were due on the
Mortgage Loans on or before the Cut-off Date; (ii) the Collection Accounts
(including any Simple-Interest Excess Sub-Accounts), the Certificate Account,
and the Basis Risk Reserve Fund and all amounts deposited therein pursuant to
the applicable provisions of this Agreement; (iii) property which secured a
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure after the Cut-off Date; (iv) the Depositor's rights under the
Assignment and Assumption Agreement; (v) the GEMICO Policy, and (vi) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing.

     TRUSTEE: The Chase Manhattan Bank and its successors and, if a successor
trustee is appointed hereunder, such successor.

     UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance of such REMIC Regular Interest. In each case, Uncertificated Accrued
Interest will be reduced by any Net Prepayment Interest Shortfalls and Relief
Act Interest Shortfalls (allocated to such REMIC Regular Interests based on the
priorities set forth in Section 1.03).

     UNCERTIFICATED PASS-THROUGH RATE: The Uncertificated REMIC 1 Pass-Through
Rate.

     UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC Regular
Interest, the amount of such REMIC Regular Interest outstanding as of any date
of determination. As of the Closing Date, the Uncertificated Principal Balance
of each REMIC Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.07 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.03(b), and the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1F and REMIC 1
Regular Interest LT1L shall be increased by interest deferrals as provided in
Section 4.07. The Uncertificated Principal Balance of each REMIC Regular
Interest that has an Uncertificated Principal Balance shall never be less than
zero.

     UNCERTIFICATED REMIC 1 PASS-THROUGH RATE: For any Distribution Date, with
respect to REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1
Regular Interest LT1C, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
LT1E and REMIC 1 Regular Interest LT1F, the Net WAC Rate of the Loan Group 1
Mortgage Loans for such Distribution Date and with respect to REMIC 1 Regular
Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest LT1I,
REMIC 1 Regular Interest LT1J, REMIC 1 Regular Interest LT1K, REMIC

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<PAGE>

1 Regular Interest LT1L, the Net WAC Rate of the Loan Group 2 Mortgage Loans for
such Distribution Date.

     VOTING RIGHTS: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions of
this Agreement. At all times during the term of this Agreement, 98% of all
Voting Interests shall be allocated among the Class A-1, Class A-2, Class M-1,
Class M-2 and Class B Certificates. The portion of such 98% Voting Interests
allocated to the Class A-1, Class A-2, Class M-1, Class M-2 and Class B
Certificates shall be based on the fraction, expressed as a percentage, the
numerator of which is the aggregate Class Principal Balance then outstanding and
the denominator of which is the Class Principal Balance of all such Classes then
outstanding. The Class P and Class X Certificates shall each be allocated 1% of
the Voting Interest. Voting Interests shall be allocated among the Certificates
within each such Class (other than the Class P and Class X Certificates, which
each have only one certificate) in accordance with their respective Percentage
Interests. The Class R shall have no voting rights.

     WEIGHTED AVERAGE NET FUNDS CAP: For any Distribution Date, the quotient
expressed as a percentage of (a) the sum of (i) the product of (x) the Net Funds
Cap for Loan Group 1 and (y) the Subordinate Component Balance for Loan Group 1
for such Distribution Date, and (ii) the product of (x) the Net Funds Cap For
Loan Group 2 and (y) the Subordinate Component Balance for Loan Group 2 for such
Distribution Date divided by (b) the sum of the Subordinate Component Balances
for such Distribution Date.

     SECTION 1.02 INTEREST CALCULATIONS.

     Interest on the LIBOR Certificates shall be calculated on the basis of a
360-day year and the actual number of days elapsed. The calculation of the
Servicing Fee, the GEMICO PMI Fee and interest on the Class X Certificate and
Class A-1 Certificates shall be made on the basis of a 360-day year consisting
of twelve 30-day months. All dollar amounts calculated hereunder shall be
rounded to the nearest penny with one-half of one penny being rounded down.

     SECTION 1.03 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.

     For purposes of calculating the amount of Uncertificated Accrued Interest
for the Uncertificated REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Prepayment Interest Shortfalls (net of any Compensating
Interest Payment) and any Relief Act Interest Shortfalls incurred in respect of
the Mortgage Loans for any Distribution Date shall be allocated (i) with respect
to the Loan Group 1 Mortgage Loans, first, to Uncertificated Accrued Interest
payable to REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1F up to
an aggregate amount equal to the REMIC 1 Interest Loss Allocation Amount, 98%
and 2%, respectively, and thereafter among REMIC 1 Regular Interest LT1A, REMIC
1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E and REMIC 1 Regular Interest LT1F, PRO RATA
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Regular
Interest and (ii) with respect to the Loan Group 2 Mortgage Loans first, to
Uncertificated Accrued Interest payable to REMIC 1 Regular Interest LT1G and
REMIC 1 Regular Interest LT1L up to an aggregate

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<PAGE>

amount equal to the REMIC 2 Group II Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter among REMIC 1 Regular Interest LT1G, REMIC 1
Regular Interest LT1H, REMIC 1 Regular Interest LT1I, REMIC 1 Regular Interest
LT1J, REMIC 1 Regular Interest LT1K and REMIC 1 Regular Interest LT1L PRO RATA
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 1 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 1 Regular
Interest.

                                       40

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                         REPRESENTATIONS AND WARRANTIES

     SECTION 2.01 CONVEYANCE OF MORTGAGE LOANS.

     (a) The Depositor, concurrently with the execution and delivery hereof,
hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee
in trust for the benefit of the Certificateholders, without recourse, all the
right, title and interest of the Depositor in and to (i) subject to Section
6.04(b), each Mortgage Loan, including all interest and principal received or
receivable on or with respect to such Mortgage Loans after the Cut-off Date and
all interest and principal payments on the Mortgage Loans received prior to the
Cut-off Date in respect of installments of interest and principal due
thereafter, but not including payments of principal and interest due and payable
on the Mortgage Loans on or before the Cut-off Date; (ii) any insurance policies
in respect of the Mortgage Loans; (iii) the Depositor's rights under the
Assignment and Assumption Agreement and (iv) all proceeds of any of the
foregoing. In addition, on or prior to the Closing Date, the Depositor shall
cause GEMICO to deliver the GEMICO Policy to the Trustee.

     (b) In connection with the transfer and assignment set forth in clause (a)
above, the Depositor has delivered or caused to be delivered to the Trustee for
the benefit of the Certificateholders, the documents and instruments with
respect to each Mortgage Loan as assigned:

          (i) the electronic Mortgage Loan Schedule;

          (ii) (A) the original Mortgage Note bearing all intervening
     endorsements and including any riders to the Mortgage Note, endorsed "Pay
     to the order of ________________, without recourse" and signed in the name
     of the last named endorsee by an authorized officer, or

               (B) with respect to any Lost Mortgage Note, a lost note affidavit
          stating that the original Mortgage Note was lost or destroyed,
          together with a copy of such Mortgage Note;

          (iii) the original of any guarantee executed in connection with the
     Mortgage Note (if any);

          (iv) the original Mortgage, with evidence of recording thereon, or
     copies certified by the related recording office or if the original
     Mortgage has not yet been returned from the recording office, a copy
     certified by or on behalf of the Seller indicating that such Mortgage has
     been delivered for recording. The return directions for the original
     Mortgage should indicate, when recorded, mail to the Seller;

          (v) the originals of all assumption, modification, consolidation or
     extension agreements, (or, if an original of any of these documents has not
     been returned from the recording office, a copy thereof certified by or on
     behalf of the Seller, the original to be

                                       41

<PAGE>

     delivered to the Seller forthwith after return from such recording office)
     with evidence of recording thereon, if any;

          (vi) the original Assignment of Mortgage as appropriate, in recordable
     form, for the Mortgage Loan assigned in blank;

          (vii) the originals of any intervening recorded assignments of
     mortgage, showing a complete chain of assignment from origination to the
     last named assignee, including warehousing assignments, with evidence of
     recording thereon (or, if an original intervening Assignment of Mortgage
     has not been returned from the recording office, a copy thereof certified
     by or on behalf of the Seller, the original to be delivered to the Trustee
     forthwith after return from such recording office); and

          (viii) the original mortgage title insurance policy, or copy of title
     commitment (or in appropriate jurisdictions, attorney's opinion of title
     and abstract of title).

     If the Seller delivers certified copies of any document or instrument set
forth in Section 2.01(b) to the Trustee because of a delay caused by the public
recording office in returning any recorded document, the Seller shall deliver to
the Trustee, within 60 days of the Closing Date, an Officer's Certificate which
shall (i) identify the recorded document, (ii) state that the recorded document
has not been delivered to the Trustee due solely to a delay caused by the public
recording office, and (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation.

     In the event that in connection with any Mortgage Loan the Depositor cannot
deliver (a) the original recorded Mortgage, (b) all interim recorded assignments
or (c) the lender's title policy (together with all riders thereto) satisfying
the requirements set forth above, concurrently with the execution and delivery
hereof because such document or documents have not been returned from the
applicable public recording office in the case of clause (a) or (b) above, or
because the title policy has not been delivered to the Seller or the Depositor
by the applicable title insurer in the case of clause (c) above, the Depositor
shall promptly deliver to the Trustee, in the case of clause (a) or (b) above,
such original Mortgage or such interim assignment, as the case may be, with
evidence of recording indicated thereon upon receipt thereof from the public
recording office, or a copy thereof, certified, if appropriate, by the relevant
recording office and in the case of (c) above, such original title policy
(together with all riders thereto), upon receipt from the applicable title
insurer.

     As promptly as practicable subsequent to such transfer and assignment and
delivery to it of each Assignment of Mortgage pursuant to clause (vii) above,
and in any event, within thirty (30) days thereafter, the Trustee shall (at the
Seller's expense) (i) affix the Trustee's name to each Assignment of Mortgage,
as the assignee thereof, (ii) cause such Assignment of Mortgage to be completed
in proper form for recording in the appropriate public office for real property
records within thirty (30) days after receipt thereof and (iii) cause to be
delivered for recording in the appropriate public office for real property
records the Assignments of Mortgages to the Trustee, except that, with respect
to any Assignment of Mortgage as to which the Trustee has not received the
information required to prepare such Assignment of Mortgage in recordable form,
the Trustee's obligation to do so and to deliver the same for such recording
shall be as soon as practicable after

                                       42

<PAGE>

receipt of such information and in any event within thirty (30) days after the
receipt thereof, and the Trustee need not cause to be recorded any Assignment of
Mortgage which relates to a Mortgage Loan in any jurisdiction under the laws of
which, as evidenced by an Opinion of Counsel delivered by the Seller (at the
Seller's expense) to the Trustee within twenty (20) days of the Closing Date,
acceptable to the Rating Agencies, the recordation of such Assignment of
Mortgage is not necessary to protect the Trustee's and the Certificateholders'
interest in the related Mortgage Loan.

     SECTION 2.02 ACCEPTANCE BY THE TRUSTEE OF THE MORTGAGE LOANS.

     (a) The Trustee acknowledges receipt of the documents identified in the
Initial Certification in the form annexed hereto as Exhibit G and declares that
it holds and will hold or will cause its agent to hold such documents and the
other documents delivered to it constituting the Mortgage Files, and that it
holds or will hold or will cause its agent to hold such other assets as are
included in the Trust Fund, in trust for the exclusive use and benefit of all
present and future Certificateholders. The Trustee acknowledges that it or the
Custodian will maintain possession of the Mortgage Notes in the State of Texas,
State of California or State of Minnesota, as directed by the Seller, unless
otherwise permitted by the Rating Agencies.

     The Trustee agrees to execute and deliver on the Closing Date to the
Depositor and each applicable Servicer an Initial Certification in the form
annexed hereto as Exhibit G. Based on its review and examination, and only as to
the documents identified in such Initial Certification, the Trustee acknowledges
that such documents appear regular on their face and relate to such Mortgage
Loan. The Trustee shall be under no duty or obligation to inspect, review or
examine said 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 90 days after the Closing Date, the Trustee shall deliver to
the Depositor and the Seller and each Servicer a Final Certification in the form
annexed hereto as Exhibit H, with any applicable exceptions noted thereon.

     If, in the course of such review, the Trustee finds any document
constituting a part of a Mortgage File which does not meet the requirements of
Section 2.01, the Trustee shall list such as an exception in the Final
Certification; provided, however, that the Trustee shall not make any
determination as to whether (i) any endorsement is sufficient to transfer all
right, title and interest of the party so endorsing, as noteholder or assignee
thereof, in and to that Mortgage Note or (ii) any assignment is in recordable
form or is sufficient to effect the assignment of and transfer to the assignee
thereof under the mortgage to which the assignment relates.

     The Seller shall promptly correct or cure such defect within 90 days from
the date it is so notified of such defect and, if the Seller does not correct or
cure such defect within such period, the Seller shall either (i) substitute for
the related Mortgage Loan a Qualified Substitute Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03, or (ii) purchase such Mortgage Loan from the Trustee
within 90 days from the date the Seller was notified of such defect in writing
at the Repurchase Price of such Mortgage Loan; provided, however, that if the
cure, substitution or repurchase of a Mortgage Loan pursuant to this

                                       43

<PAGE>

provision is required by reason of a delay in delivery of any documents by the
appropriate recording office, then the Seller shall be given 720 days from the
Closing Date to cure such defect or substitute for, or repurchase such Mortgage
Loan; and further provided, that the Seller shall have no liability for
recording any Assignment of Mortgage in favor of the Trustee or for the
Trustee's failure to record such Assignment of Mortgage, and no Seller shall be
obligated to repurchase or cure any Mortgage Loan as to which such Assignment of
Mortgage is not recorded. The Trustee shall deliver written notice to each
Rating Agency within 270 days from the Closing Date indicating each Mortgage (a)
which has not been returned by the appropriate recording office or (b) as to
which there is a dispute as to location or status of such Mortgage. Such notice
shall be delivered every 90 days thereafter until the related Mortgage is
returned to the Trustee. Any such substitution effected more than 90 days after
the Closing Date 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
shall not be effected prior to the additional delivery to the Trustee, or the
Custodian on its behalf, of a Request for Release substantially in the form of
Exhibit M and the Mortgage File for any such Qualified Substitute Mortgage Loan.
No substitution is permitted to be made in any calendar month after the
Determination Date for such month. The Repurchase Price for any such Mortgage
Loan shall be deposited by the Seller in the applicable Collection Account on or
prior to the Business Day immediately preceding such Distribution Date in the
month following the month of repurchase and, upon receipt of such deposit and
certification with respect thereto in the form of Exhibit M hereto, the Trustee,
or the Custodian on its behalf, shall release the related Mortgage File to the
Seller and shall execute and deliver at such entity's request such instruments
of transfer or assignment prepared by such entity, in each case without
recourse, as shall be necessary to vest in such entity, or a designee, the
Trustee's interest in any Mortgage Loan released pursuant hereto.

     (b) It is understood and agreed that the obligation of the Seller to cure,
substitute for or to repurchase any Mortgage Loan which does not meet the
requirements of Section 2.01 shall constitute the sole remedy respecting such
defect available to the Trustee, the Depositor and any Certificateholder against
the Seller.

     (c) Certain Mortgage Loans are being held pursuant to the Custodial
Agreements, with respect to such Mortgage Loans, notwithstanding anything to the
contrary contained herein, the parties hereto acknowledge that the functions of
the Trustee with respect to the custody, acceptance, inspection, completion and
recordation of the Assignments of Mortgage and release of the Mortgage Files
pursuant to Sections 2.01, 2.02, 2.05, 3.12, as well as pursuant to any other
provision in this Agreement, and the preparation and delivery of any
certifications by the Trustee shall be performed by the Custodian.

     SECTION 2.03 REPRESENTATIONS AND WARRANTIES OF THE SELLER AND SERVICERS.

     (a) Each of DLJMC, Calmco and Old Kent, in their capacities as Seller or
Servicer, hereby makes on behalf of themselves the representations and
warranties set forth in Schedule IIA, Schedule IIB and Schedule IIC hereto,
respectively, and by this reference incorporated herein, to the Depositor and
the Trustee, as of the Closing Date, or if so specified therein, as of the
applicable Cut-off Date.

                                       44

<PAGE>

     (b) DLJMC, in its capacity as Seller, hereby makes the representations and
warranties set forth in Schedule IB to the Depositor and the Trustee, as of the
Closing Date, or the date specified therein, or, if so specified therein, as of
the Cut-off Date, with respect to the Mortgage Loans identified on Schedule IB
hereto and, with respect to the Mortgage Loans identified on Schedule IA hereto,
the Seller hereby makes the representations and warranties set forth therein as
of August 31, 2000.

     (c) The Depositor hereby assigns the representations and warranties set
forth in Schedule IIIA, and by this reference incorporated herein, to the
Trustee, as of the Closing Date, or if specified therein, as of the Cut-off Date
or such other date as may be specified.

     (d) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made pursuant to Section 2.03(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. The Seller hereby covenants that within 90 days of the earlier of its
discovery or its receipt of written notice from any party of a breach of any
representation or warranty made by it pursuant to Section 2.03(b) which
materially and adversely affects the value of the related Mortgage Loan or the
interests of the Certificateholders, 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 Qualified Substitute 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 Repurchase Price in the manner
set forth below; provided, however, that any such substitution pursuant to (i)
above shall not be effected prior to the delivery to the Trustee of the Opinion
of Counsel required by Section 2.05 hereof, if any, 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 and
the Mortgage File for any such Qualified Substitute Mortgage Loan. The Seller
shall promptly reimburse the related Servicer and the Trustee for any actual
out-of-pocket expenses reasonably incurred by the related Servicer or the
Trustee in respect of enforcing the remedies for such breach. With respect to
any representation and warranty described in this Section which are made to the
best of the Seller's knowledge, if it is discovered by either the Depositor, 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 or the interests of the Certificateholders therein,
notwithstanding the Seller'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.

     With respect to any Qualified Substitute Mortgage Loan or Loans, the Seller
shall deliver to the Trustee for the benefit of the Certificateholders the
Mortgage Note, the Mortgage, the related assignment of the Mortgage, and such
other documents and agreements as are required by Section 2.01(b), with the
Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No
substitution is permitted to be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Seller. For the month of
substitution, distributions to Certificateholders will include the monthly
payment due on any Deleted Mortgage Loan for such month and thereafter the
Seller shall be entitled to retain all

                                       45

<PAGE>

amounts received in respect of such Deleted Mortgage Loan. The Seller shall
amend the related Mortgage Loan Schedule for the benefit of the
Certificateholders to reflect the removal of such Deleted Mortgage Loan and the
substitution of the Qualified Substitute Mortgage Loan or Loans and the Seller
shall deliver the amended Mortgage Loan Schedule to the Trustee and the
Depositor. Upon such substitution, the Qualified Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Seller shall be deemed to have made with respect to such Qualified Substitute
Mortgage Loan or Loans, as of the date of substitution, the representations and
warranties made pursuant to Section 2.03(b) with respect to such Mortgage Loan.
Upon any such substitution and the deposit to the applicable Collection Account
of the amount required to be deposited therein in connection with such
substitution as described in the following paragraph, the Trustee shall release
the Mortgage File held for the benefit of the Certificateholders relating to
such Deleted Mortgage Loan to the Seller and shall execute and deliver at the
Seller's direction such instruments of transfer or assignment prepared by the
Seller, in each case without recourse, as shall be necessary to vest title in
the Seller, or its designee, 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 Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the related
Servicer will determine the amount (if any) by which the aggregate principal
balance of all such Qualified Substitute Mortgage Loans as of the date of
substitution is less than the aggregate Stated Principal Balance of all such
Deleted Mortgage Loans (after application of the scheduled principal portion of
the monthly payments due in the month of substitution). The amount of such
shortage (the "Substitution Adjustment Amount") plus an amount equal to the
aggregate of any unreimbursed Advances with respect to such Deleted Mortgage
Loans shall be deposited in the applicable Collection Account by the Seller on
or before the Business Day immediately preceding the related Servicer Remittance
Date in the month succeeding the calendar month during which the related
Mortgage Loan became required to be purchased or replaced hereunder.

     In the event that the Seller shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the related Collection Account
pursuant to Section 3.05 on or before the Business Day immediately preceding the
related Servicer Remittance Date in the month following the month during which
the Seller became obligated hereunder to repurchase or replace such Mortgage
Loan and upon such deposit of the Repurchase Price and receipt of a Request for
Release in the form of Exhibit M hereto, the Trustee shall release the related
Mortgage File held for the benefit of the Certificateholders to such Person, and
the Trustee shall execute and deliver at such Person's direction such
instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee. It
is understood and agreed that the obligation under this Agreement of any Person
to cure, repurchase or substitute any Mortgage Loan as to which a breach has
occurred and is continuing shall constitute the sole remedy against such Persons
respecting such breach available to Certificateholders, the Depositor or the
Trustee on their behalf.

     The representations and warranties made pursuant to this Section 2.03 shall
survive delivery of the respective Mortgage Files to the Trustee for the benefit
of the Certificateholders.

                                       46

<PAGE>

     SECTION 2.04 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AS TO THE
                  MORTGAGE LOANS.

     The Depositor hereby represents and warrants to the Trustee with respect to
each Mortgage Loan that, as of the Closing Date, assuming good title has been
conveyed to the Depositor, the Depositor had good title to the Mortgage Loans
and Mortgage Notes, and did not encumber the Mortgage Loans during its period of
ownership thereof, other than as contemplated by the Agreement.

     It is understood and agreed that the representations and warranties set
forth in this Section 2.04 shall survive delivery of the Mortgage Files to the
Trustee.

     SECTION 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION WITH
                  SUBSTITUTIONS.

     (a) Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.02 shall be made more than 90 days after the
Closing Date unless the Seller delivers to the Trustee an Opinion of Counsel,
which Opinion of Counsel shall not be at the expense of either the Trustee or
the Trust Fund, addressed to the Trustee, to the effect that such substitution
will not (i) result in the imposition of the tax on "prohibited transactions" on
the Trust Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause any REMIC
hereunder to fail to qualify as a REMIC at any time that any Certificates are
outstanding.

     (b) Upon discovery by the Depositor, the Seller, a 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 five (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(c) with respect to substitutions
are satisfied, a Qualified Substitute 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 made pursuant to 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 EXECUTION AND DELIVERY OF CERTIFICATES.

     The Trustee acknowledges receipt of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit G and the amounts required
to be deposited into the Basis Risk Reserve Fund and, concurrently with such
receipt, has executed and delivered to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing directly or indirectly 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 according to its terms.

                                       47

<PAGE>

     SECTION 2.07 REMIC MATTERS.

     The Preliminary Statement sets forth the designations and "latest possible
maturity date" for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "tax matters person" with respect to each REMIC hereunder shall be the
Trustee and the Trustee shall hold the Tax Matters Person Certificate. Each
REMIC's fiscal year shall be the calendar year.

     SECTION 2.08 COVENANTS OF EACH SERVICER.

     Each Servicer hereby covenants to the Depositor and the Trustee for itself
only as follows:

     (a) the Servicer shall comply in the performance of its obligations under
this Agreement in all material respects with all reasonable rules and
requirements of the insurer under each Primary Insurance Policy; and

     (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 Servicer pursuant to this Agreement
will contain any untrue statement of a material fact.

     SECTION 2.09 CONVEYANCE OF REMIC REGULAR INTERESTS AND ACCEPTANCE OF REMIC
                  1 BY THE TRUSTEE; ISSUANCE OF CERTIFICATES.

     (a) The Depositor, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC 1 Regular Interests for the benefit of the holders of the
Certificates. The Trustee acknowledges receipt of the REMIC 1 Regular Interests
(which are uncertificated) and declares that it holds and will hold the same in
trust for the exclusive use and benefit of the holders of the Certificates. The
interests evidenced by the Class R-2 Interest, together with the Regular
Certificates, constitute the entire beneficial ownership interest in REMIC 2.

     (b) In exchange for the REMIC 1 Regular Interests and, concurrently with
the assignment to the Trustee thereof, pursuant to the written request of the
Depositor executed by an officer of the Depositor, the Trustee has executed,
authenticated and delivered to or upon the order of the Depositor, the Regular
Certificates in authorized denominations evidencing (together with the Class R-2
Interest) the entire beneficial ownership interest in REMIC 2.

     (c) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, pursuant to Section 2.01,
Section 2.02 and Section 2.09(a) and (ii) the assignment and delivery to the
Trustee of REMIC 2 (including the Residual Interest therein represented by the
Class R-2 Interest) and the acceptance by the Trustee thereof, pursuant to
Section 2.09(b), 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

                                       48

<PAGE>

R Certificates in authorized denominations evidencing the Class R-1 Interest and
the Class R-2 Interest.

                                       49

<PAGE>

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

     SECTION 3.01 SERVICERS TO SERVICE MORTGAGE LOANS.

     For and on behalf of the Certificateholders, each Servicer shall service
and administer the related Mortgage Loans in accordance with the terms of this
Agreement and with Accepted Servicing Practices. The obligations of each of
Calmco and Old Kent hereunder to service and administer the Mortgage Loans shall
be limited to the Calmco Serviced Loans and the Old Kent Serviced Loans,
respectively; and with respect to the duties and obligations of each Servicer,
references herein to "Mortgage Loans" or related "Mortgage Loans" shall be
limited to the Calmco Serviced Loans, including the Special Serviced Loans (and
the related proceeds thereof and related REO Properties), in the case of Calmco
and the Old Kent Serviced Loans (and the related proceeds thereof and related
REO Properties), in the case of Old Kent, and in no event shall any Servicer
have any responsibility or liability with respect to any of the other Mortgage
Loans. In connection with such servicing and administration, each Servicer shall
have full power and authority, acting alone and/or through Subservicers as
provided in Section 3.02 hereof, to do or cause to be done any and all things
that it may deem necessary or desirable in connection with such servicing and
administration, including but not limited to, the power and authority, 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) to effectuate foreclosure or
other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan; provided that a Servicer shall not take any 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, the Trustee or the Certificateholders under this Agreement. Each
Servicer shall represent and protect the interests of the Trust Fund in the same
manner as it protects its own interests 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 Mortgage Loan which
would cause any REMIC hereunder to fail to qualify as a REMIC or result in the
imposition of any tax under Section 860F(a) or Section 860G(d) of the Code.
Without limiting the generality of the foregoing, each 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 such 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. Each Servicer shall prepare and deliver to the Depositor
and/or the Trustee such documents requiring execution and delivery by either or
both of them as are necessary or appropriate to enable such Servicer to service
and administer the Mortgage Loans to the extent that such Servicer is not
permitted to execute and deliver such documents pursuant to the preceding
sentence. Upon receipt of such documents, the Depositor and/or the Trustee shall
execute such documents and deliver them to such Servicer.

                                       50

<PAGE>

     In accordance with the standards of the preceding paragraph, each 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. The costs incurred by a 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
Balances of the related Mortgage Loans, notwithstanding that the terms of such
Mortgage Loans so permit.

     With respect to the Group 1 and Group 2 Mortgage Loans, the Servicer of
such Mortgage Loans agrees that, with respect to the Mortgagors of such Mortgage
Loans, the Servicer shall accurately and fully report its borrower credit files
to Equifax, Transunion & Experian in a timely manner.

     Each Servicer hereby acknowledges that, to the extent such Servicer has
previously serviced some or all of the Mortgage Loans pursuant to another
servicing agreement, the provisions contained in this Agreement shall supersede
the provisions contained in such other servicing agreement.

     SECTION 3.02 SUBSERVICING; ENFORCEMENT OF THE OBLIGATIONS OF SUBSERVICERS.

     (a) The Mortgage Loans may be subserviced by a Subservicer on behalf of the
related Servicer in accordance with the servicing provisions of this Agreement,
provided that the Subservicer is a FNMA-approved lender or a FHLMC
seller/servicer in good standing, and no event has occurred, including but not
limited to a change in insurance coverage, which would make it unable to comply
with the eligibility requirements for lenders imposed by FNMA or for
seller/servicers imposed by FHLMC, or which would require notification to FNMA
or FHLMC. A Servicer may perform any of its servicing responsibilities hereunder
or may cause the Subservicer to perform any such servicing responsibilities on
its behalf, but the use by such Servicer of the Subservicer shall not release
such Servicer from any of its obligations hereunder and such Servicer shall
remain responsible hereunder for all acts and omissions of the Subservicer as
fully as if such acts and omissions were those of such Servicer. Each Servicer
shall pay all fees and expenses of any Subservicer engaged by such Servicer from
its own funds.

     Notwithstanding the foregoing, each Servicer shall be entitled to outsource
one or more separate servicing functions to a Person (each, an "Outsourcer")
that does not meet the eligibility requirements for a Subservicer, so long as
such outsourcing does not constitute the delegation of such Servicer's
obligation to perform all or substantially all of the servicing of the related
Mortgage Loans to such Outsourcer. In such event, the use by a Servicer of any
such Outsourcer shall not release the related Servicer from any of its
obligations hereunder and such Servicer shall remain responsible hereunder for
all acts and omissions of such Outsourcer as fully as if such acts and omissions
were those of such Servicer, and such Servicer shall pay all fees and expenses
of the Outsourcer from such Servicer's own funds.

     (b) At the cost and expense of a Servicer, without any right of
reimbursement from the Depositor, Trustee, or the applicable Collection Account,
such Servicer shall be entitled to terminate

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the rights and responsibilities of its Subservicer and arrange for any servicing
responsibilities to be performed by a successor Subservicer meeting the
requirements set forth in Section 3.02(a); provided, however, that nothing
contained herein shall be deemed to prevent or prohibit such Servicer, at such
Servicer's option, from electing to service the related Mortgage Loans itself.
In the event that a Servicer's responsibilities and duties under this Agreement
are terminated pursuant to Section 7.01, and if requested to do so by the
Trustee, such Servicer shall at its own cost and expense terminate the rights
and responsibilities of its Subservicer as soon as is reasonably possible. Each
Servicer shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of its Subservicer from such
Servicer's own funds without any right of reimbursement from the Depositor,
Trustee, or the applicable Collection Account.

     (c) Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and its Subservicer, a Servicer
and its Outsourcer, or any reference herein to actions taken through the
Subservicer, the Outsourcer, or otherwise, no Servicer shall be relieved of its
obligations to the Depositor, Trustee or Certificateholders and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the related Mortgage Loans. Each Servicer
shall be entitled to enter into an agreement with its Subservicer and Outsourcer
for indemnification of such Servicer by such Subservicer or Outsourcer, as
applicable, and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.

     For purposes of this Agreement, a Servicer shall be deemed to have received
any collections, recoveries or payments with respect to the related Mortgage
Loans that are received by a related Subservicer or Outsourcer regardless of
whether such payments are remitted by the Subservicer or Outsourcer to such
Servicer.

     Any Subservicing Agreement and any other transactions or services relating
to the Mortgage Loans involving a Subservicer shall be deemed to be between the
Subservicer, and the related Servicer alone, and the Depositor, the Trustee and
the other Servicer shall have no obligations, duties or liabilities with respect
to a Subservicer including no obligation, duty or liability to pay a
Subservicer's fees and expenses.

     SECTION 3.03 NOTIFICATION OF ADJUSTMENTS.

     With respect to each Mortgage Loan with an adjustable Mortgage Rate, the
related Servicer shall adjust the Mortgage Rate on the related Adjustment Date
in compliance with the requirements of applicable law and the related Mortgage
and Mortgage Note. The related Servicer shall execute and deliver any and all
necessary notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Rate adjustments. Upon the
discovery by the related Servicer or the receipt of notice from the Trustee that
such Servicer has failed to adjust a Mortgage Rate in accordance with the terms
of the related Mortgage Note, that Servicer shall immediately deposit in the
Certificate Account from its own funds the amount of any interest loss or
deferral caused the Trustee thereby.

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     SECTION 3.04 TRUSTEE TO ACT AS SERVICER; THE SPECIAL SERVICER.

     (a) In the event that any Servicer shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of such Servicer pursuant to Section 3.09 hereof or any acts
or omissions of the related predecessor 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, but not limited to, repurchases or substitutions of Mortgage Loans
pursuant to Section 2.02 or 2.03 hereof or (iv) deemed to have made any
representations and warranties of such Servicer hereunder). Any such assumption
shall be subject to Section 7.02 hereof.

     Each Servicer shall, upon request of the Trustee, but at the expense of
such Servicer, deliver to the assuming party all documents and records relating
to each Subservicing Agreement or substitute Subservicing Agreement and the
Mortgage Loans then being serviced thereunder and hereunder by such Servicer and
an accounting of amounts collected or held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of the substitute
Subservicing Agreement to the assuming party at the expense of the outgoing
Servicer.

     (b) If directed by Calmco and solely at Calmco's option, a Servicer shall
transfer the servicing of any Mortgage Loan 91 days or more delinquent to
Calmco. In addition, a Servicer may transfer any Foreclosure Restricted Loans to
Calmco. In the case of a transfer of such Foreclosure Restricted Loans, such
Servicer shall be obligated to transfer the servicing rights thereunder to
Calmco. Calmco shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that Calmco shall not be (i)
liable for losses of such Servicer pursuant to Section 3.09 hereof or any acts
or omissions of the related predecessor Servicer hereunder, (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder including,
but not limited to, repurchases or substitutions of Mortgage Loans pursuant to
Section 2.02 or 2.03 hereof or (iii) deemed to have made any representations and
warranties of such Servicer hereunder). Upon the transfer of the servicing of
any such Mortgage Loan to Calmco, Calmco shall (i) be entitled to the Servicing
Fee and other compensation with respect to such Mortgage Loans pursuant to
Section 3.14 and (ii) reimburse the Servicer for any unreimbursed advances and
Servicing Advances made by the Servicer and any accrued and unpaid Servicing Fee
due to such Servicer with respect to such servicing.

     In connection with the transfer of the servicing of any Mortgage Loan to
Calmco, such Servicer shall, at Calmco's expense, deliver to Calmco all
documents and records relating to such Mortgage Loans and an accounting of
amounts collected or held by it and otherwise use its best efforts to effect the
orderly and efficient transfer of the servicing to Calmco. In addition, Calmco
shall notify the Trustee of such transfer and amend the Mortgage Loan Schedule
to reflect that such Mortgage Loans are Calmco Serviced Loans.

     SECTION 3.05 COLLECTION OF MORTGAGE LOANS; COLLECTION ACCOUNT; CERTIFICATE
                  ACCOUNT.

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     (a) Continuously from the date hereof until the principal and interest on
all Mortgage Loans have been paid in full or such Mortgage Loans have become
Liquidated Mortgage Loans, each Servicer shall proceed in accordance with the
customary and usual standards of practice of prudent mortgage loan servicers to
collect all payments due under each of the related Mortgage Loans when the same
shall become due and payable to the extent consistent with this Agreement and
the terms and provisions of the GEMICO PMI Policy and any related Primary
Insurance Policy and shall take special care with respect to Mortgage Loans for
which a Servicer collects escrow payments in ascertaining and estimating Escrow
Payments and all other charges that will become due and payable with respect to
the Mortgage Loans and the Mortgaged Properties, to the end that the
installments payable by the Mortgagors will be sufficient to pay such charges as
and when they become due and payable. Consistent with the foregoing, each
Servicer may in its discretion (i) waive any late payment charge and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater than
180 days; provided, however, that such Servicer cannot extend the maturity of
any such Mortgage Loan past the date on which the final payment is due on the
latest maturing Mortgage Loan as of the Cut-off Date. In the event of any such
arrangement, the related Servicer shall make Advances on the related Mortgage
Loan in accordance with the provisions of Section 4.01 during the scheduled
period in accordance with the amortization schedule of such Mortgage Loan
without modification thereof by reason of such arrangements. Each 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) Each Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Collection Accounts,
in the form of time deposit or demand accounts, titled "[Servicer's name], in
trust for the Holders of Credit Suisse First Boston Mortgage Securities Corp.,
Mortgage Pass-Through Certificates, Series 2001-HE8". Each Collection Account
shall be an Eligible Account. Any funds deposited in a Collection Account shall
at all times be either invested in Eligible Investments or shall be fully
insured to the full extent permitted under applicable law. Funds deposited in a
Collection Account may be drawn on by the applicable Servicer in accordance with
Section 3.08.

     (c) Each Servicer shall deposit in the applicable Collection Account on a
daily basis, and, in each case, retain therein, the following collections
remitted by Subservicers or payments received by such Servicer and payments made
by such Servicer subsequent to the Cut-off Date, other than payments of
principal and interest due on or before the Cut-off Date:

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

          (ii) all payments on account of interest on the related Mortgage Loans
     adjusted to the per annum rate equal to the Mortgage Rate reduced by the
     Servicing Fee Rate;

          (iii) all Liquidation Proceeds on the related Mortgage Loans;

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          (iv) all Insurance Proceeds on the related Mortgage Loans including
     amounts required to be deposited pursuant to Section 3.09 (other than
     proceeds to be held in the Escrow Account and applied to the restoration or
     repair of the Mortgaged Property or released to the Mortgagor in accordance
     with Section 3.09);

          (v) all Advances made by such Servicer pursuant to Section 4.01;

          (vi) all Substitution Adjustment Amounts and Repurchase Prices on the
     related Mortgage Loans;

          (vii) with respect to each Principal Prepayment on the related
     Mortgage Loans, the Prepayment Interest Shortfall, if any, for the
     Prepayment Period. The aggregate of such deposits shall be made from such
     Servicer's own funds, without reimbursement therefor, up to a maximum
     amount per month equal to the Compensating Interest Payment, if any, for
     the Mortgage Loans serviced by that Servicer and Distribution Date;

          (viii) any amounts required to be deposited by such Servicer in
     respect of net monthly income from REO Property pursuant to Section 3.11;
     and

          (ix) any other amounts required to be deposited hereunder.

     The foregoing requirements for deposit into each Collection Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, Ancillary Income need not be deposited by such
Servicer into such Collection Account. In addition, notwithstanding the
provisions of this Section 3.05, each Servicer may deduct from amounts received
by it, prior to deposit to the applicable Collection Account, any portion of any
Scheduled Payment representing the Servicing Fee. In the event that a Servicer
shall remit any amount not required to be remitted, it may at any time withdraw
or direct the institution maintaining the related Collection Account to withdraw
such amount from such Collection Account, any provision herein to the contrary
notwithstanding. Such withdrawal or direction may be accomplished by delivering
written notice thereof to the Trustee or such other institution maintaining such
Collection Account which describes the amounts deposited in error in such
Collection Account. The Trustee may conclusively rely on such notice and shall
have no liability in connection with the withdrawal of such funds at the
direction of a Servicer. Each Servicer shall maintain adequate records with
respect to all withdrawals made by it pursuant to this Section. All funds
deposited in a Collection Account shall be held in trust for the
Certificateholders until withdrawn in accordance with Section 3.08(a).

     (d) On or prior to the Closing Date, the Trustee shall establish and
maintain, on behalf of the Certificateholders, the Certificate Account. The
Trustee shall, promptly upon receipt, deposit in the Certificate Account and
retain therein the following:

          (i) the aggregate amount remitted by the Servicers to the Trustee
     pursuant to Section 3.08(a)(viii); and

          (ii) any other amounts deposited hereunder which are required to be
     deposited in the Certificate Account.

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     In the event that a Servicer shall remit to the Trustee any amount not
required to be remitted, it may at any time in writing direct the Trustee to
withdraw such amount from the Certificate Account, any provision herein to the
contrary notwithstanding. Such direction may be accomplished by delivering
written notice to the Trustee (upon which the Trustee may conclusively rely)
which describes the amounts deposited in error in the Certificate Account. All
funds deposited in the Certificate 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(b). In no event shall the Trustee
incur liability for withdrawals from the Certificate Account at the direction of
a Servicer.

     (e) Each institution at which a Collection Account is maintained shall
either hold such funds on deposit uninvested or shall invest the funds therein
in Eligible Investments as directed in writing by the related Servicer, which
shall mature not later than the Servicer Remittance Date and shall not be sold
or disposed of prior to its maturity. All such Eligible Investments shall be
made in the name of the Trustee, for the benefit of the Certificateholders. All
income and gain net of any losses realized from any such balances or investment
of funds on deposit in a Collection Account shall be for the benefit of the
related Servicer as servicing compensation and shall be remitted to it monthly.
The amount of any net investment losses in a Collection Account shall promptly
be deposited by the related Servicer in such Collection Account. The Trustee in
its fiduciary capacity 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
Collection Account made in accordance with this Section 3.05. All funds on
deposit in the Certificate Account shall remain uninvested. All net income and
gain realized from the investment of, and all earnings on, funds deposited in
the Simple Interest Excess Sub-Accounts shall be paid in accordance with Section
3.06.

     (f) Each Servicer shall give notice to the Trustee, each Rating Agency and
the Depositor of any proposed change of the location of the related Collection
Account prior to any change thereof. The Trustee shall give notice to each
Servicer, each Rating Agency and the Depositor of any proposed change of the
location of the Certificate Account prior to any change thereof.

     SECTION 3.06 ESTABLISHMENT OF AND DEPOSITS TO ESCROW ACCOUNTS; PERMITTED
                  WITHDRAWALS FROM ESCROW ACCOUNTS; PAYMENTS OF TAXES, INSURANCE
                  AND OTHER CHARGES; SIMPLE INTEREST EXCESS SUB-ACCOUNTS;
                  DEPOSITS IN SIMPLE INTEREST EXCESS SUB-ACCOUNTS.

     (a) To the extent required by the related Mortgage Note and not violative
of current law, the applicable Servicer shall segregate and hold all funds
collected and received pursuant to a Mortgage Loan constituting Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts, in the form of time deposit
or demand accounts, titled, "[Servicer's name], in trust for various mortgagors
related to Credit Suisse First Boston Mortgage Securities Corp., Mortgage
Pass-Through Certificates, Series 2001-HE8". The Escrow Accounts shall be
Eligible Accounts. Funds deposited in the Escrow Account may be drawn on by the
related Servicer in accordance with Section 3.06(d).

     (b) Each Servicer shall deposit in its Escrow Account or Accounts on a
daily basis within two Business Days of receipt and retain therein:

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

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

     (c) Each Servicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 3.06(d). Each Servicer shall be entitled to retain any interest paid on
funds deposited in the related Escrow Account by the depository institution,
other than interest on escrowed funds required by law to be paid to the
applicable Mortgagors. To the extent required by law, the applicable Servicer
shall pay interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.

     (d) Withdrawals from the Escrow Account or Accounts may be made by the
related Servicer only:

          (i) to effect timely payments of ground rents, taxes, assessments,
     water rates, mortgage insurance premiums, condominium charges, fire, hazard
     and flood insurance premiums or other items constituting Escrow Payments
     for the related Mortgage;

          (ii) to reimburse such Servicer for any Servicing Advances made by
     such Servicer pursuant to Section 3.06(e) with respect to a related
     Mortgage Loan, but only from amounts received on the related Mortgage Loan
     which represent late collections of Escrow Payments thereunder;

          (iii) to refund to any Mortgagor any funds found to be in excess of
     the amounts required under the terms of the related Mortgage Loan;

          (iv) for transfer to the related Collection Account to reduce the
     principal balance of the related Mortgage Loan in accordance with the terms
     of the related Mortgage and Mortgage Note;

          (v) for application to restore or repair of the related Mortgaged
     Property in accordance with the procedures outlined in Section 3.09(e);

          (vi) to pay to such Servicer, or any Mortgagor to the extent required
     by law, any interest paid on the funds deposited in such Escrow Account;

          (vii) to remove funds inadvertently placed in the related Escrow
     Account by such Servicer; and

          (viii) to clear and terminate such Escrow Account on the termination
     of this Agreement.

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     (e) With respect to each Mortgage Loan, the applicable Servicer shall
maintain accurate records reflecting the status of ground rents and taxes and
any other item or charge (including, without limitation, assessments, water
rates or sewer rents) which may become a lien senior to the lien of the related
Mortgage and the status of Primary Insurance Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect or cause
to be effected payment thereof prior to the applicable penalty or termination
date. To the extent that a Mortgage does not provide for Escrow Payments, the
applicable Servicer shall determine that any such payments are made by the
Mortgagor prior to the applicable penalty or termination date. Each Servicer
assumes full responsibility for, with respect to the Mortgage Loans it services,
(i) the timely payment of all such bills and shall effect timely payment of all
such charges irrespective of each Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments, and such Servicer shall
make Servicing Advances from its own funds to effect such payments to the extent
that such Servicer, in accordance with Accepted Servicing Practices, deems such
Servicing Advance recoverable, and (ii) any penalties or late charges incurred
in connection with such bills; provided, however, such Servicer shall not be so
obligated with respect to any Mortgage which does not provide for Escrow
Payments; provided, further, Calmco shall be entitled to reimbursement as a
Servicing Advance for any such penalties or late charges related to a Special
Serviced Mortgage Loan and such bills and charges due prior to the transfer of
the servicing of such Mortgage Loan to Calmco pursuant to Section 3.04.

     (f) No later than the Closing Date, each Servicer responsible for servicing
Simple Interest Mortgage Loans will establish and maintain a sub-account of the
Collection Account titled "[Servicer's name], Simple Interest Excess Sub-Account
in trust for the Holders of Credit Suisse First Boston Mortgage Securities
Corp., Mortgage Pass-Through Certificates, Series 2001-HE8". Such Servicer
shall, on each Determination Date transfer from the Collection Account to the
Simple Interest Excess Sub-Account all Net Simple Interest Excess, if any,
pursuant to Section 3.08(a)(ix), and shall maintain a record of all such
deposits. On the Closing Date, Calmco shall be the sole Servicer responsible for
servicing Simple Interest Mortgage Loans.

     (g) Each Servicer shall withdraw amounts on deposit in the applicable
Simple Interest Excess Sub-Account on each Determination Date for deposit to the
Certificate Account in an amount equal to the lesser of (i) the amount on
deposit therein, and (ii) the Net Simple Interest Shortfall for such
Distribution Date.

     (h) Calmco shall distribute to the Class X Certificateholder 90% of the
balance in the applicable Simple Interest Excess Sub-Account on the Distribution
Date each year occurring in February, commencing in February 2002. Such
distributions shall be deemed to be made on a first-in, first-out basis. In
addition, Calmco shall clear and terminate each related Simple Interest Excess
Sub-Account upon the termination of this Agreement and retain any funds
remaining therein.

     (i) Amounts on deposit in the Simple Interest Excess Sub-Accounts may be
invested in Eligible Investments. All income and gain net of any losses realized
from any such balances or investment of funds on deposit in a Simple Interest
Excess Sub-Account shall be for the benefit of the related Servicer as servicing
compensation and shall be remitted to it monthly. The amount of

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any net investment losses in a Simple Interest Excess Sub-Account shall promptly
be deposited by the related Servicer in such Simple Interest Excess Sub-Account.

     SECTION 3.07 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING THE
                  MORTGAGE LOANS; INSPECTIONS.

     (a) Each Servicer shall afford the Depositor and the Trustee reasonable
access to all records and documentation regarding the Mortgage Loans and all
accounts, insurance information 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 office designated by such Servicer. In
addition, each Servicer shall provide to Calmco reasonable access to all records
and documentation regarding the Mortgage Loans serviced by it that become
Special Serviced Mortgage Loans.

     (b) Upon reasonable advance notice in writing, each Servicer will provide
to each Certificateholder which 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 such Servicer shall be entitled to be reimbursed by each such
Certificateholder for actual expenses incurred by such Servicer in providing
such reports and access.

     (c) Each Servicer shall inspect the related Mortgaged Properties as often
as deemed necessary by such Servicer in such Servicer's sole discretion, to
assure itself that the value of such Mortgaged Property is being preserved. In
addition, if any Mortgage Loan is more than 60 days delinquent, the applicable
Servicer shall immediately inspect the related Mortgaged Property and shall
conduct subsequent inspections in accordance with Accepted Servicing Practices
or as may be required by the primary mortgage guaranty insurer. Each Servicer
shall keep a written or electronic report of each such inspection.

     SECTION 3.08 PERMITTED WITHDRAWALS FROM THE COLLECTION ACCOUNTS AND
                  CERTIFICATE ACCOUNT.

     (a) Each Servicer may from time to time make withdrawals from the related
Collection Account for the following purposes:

          (i) to pay to such Servicer (to the extent not previously retained by
     such Servicer) the servicing compensation to which it is entitled pursuant
     to Section 3.14, and to pay to such Servicer, as additional servicing
     compensation, earnings on or investment income with respect to funds in or
     credited to such Collection Account;

          (ii) to reimburse such Servicer for unreimbursed Advances made by it,
     such right of reimbursement pursuant to this subclause (ii) being limited
     to amounts received on the Mortgage Loan(s) in respect of which any such
     Advance was made (including without limitation, late recoveries of
     payments, Liquidation Proceeds and Insurance Proceeds to the extent
     received by such Servicer);

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          (iii) to reimburse such Servicer for any Nonrecoverable Advance
     previously made;

          (iv) to reimburse such Servicer for (A) unreimbursed Servicing
     Advances, such Servicer's right to reimbursement pursuant to this clause
     (iv) with respect to any Mortgage Loan being limited to amounts received on
     such Mortgage Loan which represent late payments of principal and/or
     interest (including, without limitation, Liquidation Proceeds and Insurance
     Proceeds with respect to such Mortgage Loan) respecting which any such
     advance was made and (B) for unpaid Servicing Fees as provided in Section
     3.11 hereof;

          (v) to pay to the purchaser, with respect to each Mortgage Loan or
     property acquired in respect thereof that has been purchased pursuant to
     Section 2.02, 2.03 or 3.11, all amounts received thereon after the date of
     such purchase;

          (vi) to reimburse the Seller, the related Servicer or the Depositor
     for expenses incurred by any of them and reimbursable pursuant to Section
     3.09 or 6.03 hereof;

          (vii) to withdraw any amount deposited in such Collection Account and
     not required to be deposited therein;

          (viii) on or prior to 4:00 p.m. New York time on the Servicer
     Remittance Date preceding each Distribution Date, to withdraw an amount
     equal to the sum of the portion of the Interest Remittance Amount and the
     Principal Remittance Amount in such Collection Account applicable to the
     Mortgage Loans serviced by such Servicer for such Distribution Date and all
     Prepayment Premiums received during the related Prepayment Period and remit
     such amount to the Trustee for deposit in the Certificate Account;

          (ix) to deposit to the Simple Interest Excess Sub-Account any amount
     required to be deposited therein pursuant to Section 3.06(f); and

          (x) to clear and terminate such Collection Account upon termination of
     this Agreement pursuant to Section 9.01 hereof.

     Each Servicer shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the related Collection Account pursuant to such subclauses (i), (ii), (iv) and
(v). Prior to making any withdrawal from a Collection Account pursuant to
subclause (iii), the related Servicer shall deliver to the Trustee a certificate
of a Servicing Officer indicating the amount of any previous Advance determined
by such Servicer to be a Nonrecoverable Advance and identifying the related
Mortgage Loans(s), and their respective portions of such Nonrecoverable Advance.

     (b) The Trustee shall withdraw funds from the Certificate Account for
distributions to Certificateholders and GEMICO 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 withhold pursuant to the last paragraph of
Section 8.11). In addition, the Trustee may from time to time make withdrawals
from the Certificate Account for the following purposes:

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          (i) to pay to itself any investment income from balances in the
     Certificate Account prior to distributions to Certificateholders;

          (ii) to withdraw and return to the applicable Servicer for deposit to
     the applicable Collection Account any amount deposited in the Certificate
     Account and not required to be deposited therein; and

          (iii) to clear and terminate the Certificate Account upon termination
     of the Agreement pursuant to Section 9.01 hereof.

     SECTION 3.09 MAINTENANCE OF HAZARD INSURANCE; MORTGAGE IMPAIRMENT
                  INSURANCE AND PRIMARY INSURANCE POLICY; CLAIMS; RESTORATION OF
                  MORTGAGED PROPERTY.

     (a) Each Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance such that all buildings upon the Mortgaged Property are insured
by a generally acceptable insurer rated either: "V" or better in the current
Best's Key Rating Guide ("Best's") or acceptable to FNMA and/or FHLMC against
loss by fire, hazards of extended coverage and such other hazards as are
customary in the area where the Mortgaged Property is located, in an amount
which is at least equal to the lesser of (i) the maximum insurable value of the
improvements 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 Mortgagor and/or
the mortgagee from becoming a co-insurer.

     If upon origination of the Mortgage Loan, the related Mortgaged Property
was located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), the related Servicer shall cause a flood insurance policy
to be maintained with respect to such Mortgage Loan. Such policy shall meet the
requirements of the current guidelines of the Federal Insurance Administration
and be in an amount representing coverage equal to the lesser of (i) the minimum
amount required, under the terms of coverage, to compensate for any damage or
loss on a replacement cost basis (or the unpaid principal balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the related Servicer determines in accordance with
applicable law and pursuant to the FNMA Guides that a Mortgaged Property is
located in a special flood hazard area and is not covered by flood insurance or
is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, such Servicer shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
said Mortgagor fails to obtain the required flood insurance coverage within 45
days after such notification, such Servicer shall immediately force place the
required flood insurance on the Mortgagor's behalf.

     If a Mortgage is secured by a unit in a condominium project, the related
Servicer shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with the then current FNMA or FHLMC requirements,

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and secure from the owner's association its agreement to notify such Servicer
promptly of any change in the insurance coverage or of any condemnation or
casualty loss that may have a material effect on the value of the Mortgaged
Property as security.

     Each Servicer shall cause to be maintained on each Mortgaged Property such
other additional special hazard insurance as may be required pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance, or pursuant to the requirements of any
Primary Insurance Policy insurer, or as may be required to conform with Accepted
Servicing Practices.

     All policies required hereunder shall name the related Servicer as loss
payee and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for prior written notice of any cancellation,
reduction in amount or material change in coverage.

     A Servicer shall not interfere with the Mortgagor's freedom of choice at
the origination of such Mortgage Loan in selecting either his insurance carrier
or agent, provided, however, that such Servicer shall not accept any such
insurance policies from insurance companies unless such companies are rated: V
in Best's or acceptable FNMA and/or FHLMC and are licensed to do business in the
jurisdiction in which the Mortgaged Property is located. The related Servicer
shall determine that such policies provide sufficient risk coverage and amounts,
that they insure the property owner, and that they properly describe the
property address.

     Pursuant to Section 3.05, any amounts collected by a Servicer under any
such policies (other than amounts to be deposited in the related Escrow Account
and applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with such Servicer's normal servicing procedures) shall
be deposited in the related Collection Account (subject to withdrawal pursuant
to Section 3.08(a)).

     Any cost incurred by a 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 related
Servicer out of late payments by the related Mortgagor or out of Liquidation
Proceeds or otherwise 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.

     (b) In the event that a Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the related Mortgage Loans, then, to the extent such policy
provides coverage in an amount equal to the amount required pursuant to Section
3.09(a) and otherwise complies with all other requirements of Section 3.09(a),
it shall conclusively be deemed to have satisfied its obligations as set forth
in Section 3.09(a). Any amounts collected by a Servicer under any such policy
relating to a Mortgage Loan shall be deposited in the related Collection Account
subject to withdrawal pursuant to Section 3.08(a). Such policy may contain a
deductible clause, in which case, in the event that there shall not have been
maintained

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on the related Mortgaged Property a policy complying with Section 3.09(a), and
there shall have been a loss which would have been covered by such policy, the
related Servicer shall deposit in the related Collection Account at the time of
such loss the amount not otherwise payable under the blanket policy because of
such deductible clause, such amount to be deposited from such Servicer's funds,
without reimbursement therefor. Upon request of the Trustee, a Servicer shall
cause to be delivered to the Trustee a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Trustee. In connection with its activities as Servicer of the related Mortgage
Loans, such Servicer agrees to present, on behalf of itself, the Depositor, and
the Trustee for the benefit of the Certificateholders, claims under any such
blanket policy.

     (c) With respect to each Mortgage Loan covered by a Primary Insurance
Policy as of the Cut-off Date, the applicable Servicer shall, without any cost
to the Depositor or Trustee, maintain or cause the Mortgagor to maintain in full
force and effect a Primary Insurance Policy insuring that portion of the
Mortgage Loan in excess of either 75% or 78% of value, and shall pay or shall
cause the Mortgagor to pay, the premium thereon on a timely basis, until the
loan-to-value ratio of such Mortgage Loan is reduced to 80% or until terminated
pursuant to the Homeowners Protection Act of 1998, 12 UCS ss.4901, et seq or
otherwise prohibited by law. In the event that such Primary Insurance Policy
shall be terminated otherwise than required by law, the applicable Servicer
shall obtain from another Qualified Insurer a comparable replacement policy,
with a total coverage equal to the remaining coverage of such terminated Primary
Insurance Policy. If the insurer shall cease to be a Qualified Insurer, the
applicable Servicer shall determine whether recoveries under the Primary
Insurance Policy are jeopardized for reasons related to the financial condition
of such insurer, it being understood that such Servicer shall in no event have
any responsibility or liability for any failure to recover under the Primary
Insurance Policy for such reason. If such Servicer determines that recoveries
are so jeopardized, it shall notify the Mortgagor, if required, and obtain from
another Qualified Insurer a replacement insurance policy. Each Servicer shall
not take any action inconsistent with Accepted Servicing Practices which would
result in noncoverage under any applicable Primary Insurance Policy of any loss
which, but for the actions of such Servicer would have been covered thereunder.
In connection with any assumption or substitution agreement entered into or to
be entered into pursuant to Section 3.10, each Servicer shall promptly notify
the insurer under the related Primary Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
Primary Insurance Policy and shall take all actions which may be required by
such insurer as a condition to the continuation of coverage under such Primary
Insurance Policy. If such Primary Insurance Policy is terminated as a result of
such assumption or substitution of liability, the applicable Servicer shall
obtain a replacement Primary Insurance Policy as provided above.

     With respect to Mortgage Loans covered by a Primary Insurance Policy, each
Servicer agrees to effect timely payment of the premiums on each Primary
Insurance Policy, and such costs not otherwise recoverable shall be recoverable
by such Servicer from the related liquidation proceeds.

     In connection with its activities as servicer, each Servicer agrees to
prepare and present, on behalf of itself, the Depositor, the Trustee and the
Certificateholders, claims to the insurer under any Primary Insurance Policy in
a timely fashion in accordance with the terms of such Primary Insurance Policy
and, in this regard, to take such reasonable action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting defaulted Mortgage
Loans. Pursuant to Section 3.05,

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any amounts collected by a Servicer under any Primary Insurance Policy shall be
deposited in the related Collection Account, subject to withdrawal pursuant to
Section 3.08.

     (d) The Trustee shall take all actions necessary in order to maintain or
cause to be maintained the GEMICO PMI Policy in full force and effect until this
Agreement is terminated pursuant to Section 9.01, except to the extent of
actions for which the Servicers are responsible under this Section 3.09(d). On
each Distribution Date, the Trustee shall remit to GEMICO the GEMICO PMI Fee,
from amounts deposited in the PMI Sub-Account. In the event that such GEMICO PMI
Policy shall be terminated otherwise than required by law, Calmco shall use its
best efforts to obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
GEMICO PMI Policy and a cost not in excess of the GEMICO PMI Fee. If GEMICO
shall cease to be a Qualified Insurer, Calmco shall use its best efforts to
obtain from another Qualified Insurer a replacement insurance policy in
accordance with the preceding sentence. Calmco shall be entitled to
reimbursement for all reasonable out-of-pocket expenses incurred in obtaining a
replacement insurance policy pursuant to Section 3.08.

     In connection with its activities as servicer, each Servicer agrees to
prepare and present, on behalf of itself, the Depositor, the Trustee and the
Certificateholders, claims to the insurer under the GEMICO PMI Policy in a
timely fashion in accordance with the terms of such the GEMICO PMI Policy and,
in this regard, to take such reasonable action as shall be necessary to permit
recovery under the GEMICO PMI Policy respecting defaulted Mortgage Loans.
Pursuant to Section 3.05, any amounts collected by a Servicer under the GEMICO
PMI Policy shall be deposited in the related Collection Account, subject to
withdrawal pursuant to Section 3.08. Each Servicer shall be responsible for
taking all actions required under the GEMICO PMI Policy to cause each GEMICO PMI
Mortgage Loan serviced by it to continue to be eligible for coverage under the
GEMICO PMI Policy, and to maximize proceeds of any claim thereunder. Each
Servicer shall be solely responsible for complying with all reporting and other
information requirements under the GEMICO PMI Policy, with respect to all GEMICO
PMI Mortgage Loans serviced by it. Each Servicer shall not take any action
inconsistent with Accepted Servicing Practices which would result in noncoverage
under the GEMICO PMI Policy of any loss which, but for the actions of such
Servicer would have been covered thereunder. In connection with any assumption
or substitution agreement entered into or to be entered into pursuant to Section
3.10, each Servicer shall promptly notify the insurer under the GEMICO PMI
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of the GEMICO PMI Policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
the GEMICO PMI Policy.

     (e) A Servicer need not obtain the approval of the Trustee prior to
releasing any Insurance Proceeds to the Mortgagor to be applied to the
restoration or repair of the Mortgaged Property if such release is in accordance
with Accepted Servicing Practices. At a minimum, each Servicer shall comply with
the following conditions in connection with any such release of Insurance
Proceeds:

          (i) such Servicer shall receive satisfactory independent verification
     of completion of repairs and issuance of any required approvals with
     respect thereto;

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          (ii) such Servicer shall take all steps necessary to preserve the
     priority of the lien of the Mortgage, including, but not limited to
     requiring waivers with respect to mechanics' and materialmen's liens; and

          (iii) pending repairs or restoration, such Servicer shall place the
     Insurance Proceeds in the related Escrow Account.

     If the Trustee is named as an additional loss payee, the related Servicer
is hereby empowered to endorse any loss draft issued in respect of such a claim
in the name of the Trustee.

     SECTION 3.10 ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.

     (a) Each Servicer shall use its best efforts to enforce any "due-on-sale"
provision contained in any related Mortgage or Mortgage Note and to deny
assumption by the person to whom the Mortgaged Property has been or is about to
be sold whether by absolute conveyance or by contract of sale, and whether or
not the Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the related Servicer
shall, to the extent it has knowledge of such conveyance, exercise its rights to
accelerate the maturity of such Mortgage Loan under the "due-on-sale" clause
applicable thereto, provided, however, that such Servicer shall not exercise
such rights if prohibited by law from doing so or if the exercise of such rights
would impair or threaten to impair any recovery under the related Primary
Insurance Policy, if any.

     (b) If a Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, such Servicer shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event such
Servicer is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, a Servicer shall not be deemed to be in default
under this Section by reason of any transfer or assumption which such Servicer
reasonably believes it is restricted by law from preventing, for any reason
whatsoever. In connection with any such assumption, no material term of the
Mortgage Note, including without limitation, the Mortgage Rate borne by the
related Mortgage Note, the term of the Mortgage Loan or the outstanding
principal amount of the Mortgage Loan shall be changed.

     (c) To the extent that any Mortgage Loan is assumable, the related Servicer
shall inquire diligently into the creditworthiness of the proposed transferee,
and shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by FNMA with respect to underwriting mortgage loans of
the same type as the Mortgage Loans. If the credit of the proposed transferee
does not meet such underwriting criteria, the related Servicer diligently shall,
to the extent permitted by the Mortgage or the Mortgage Note and by applicable
law, accelerate the maturity of the Mortgage Loan.

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     (d) Subject to each Servicer's duty to enforce any due-on-sale clause to
the extent set forth in this Section 3.10, 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, such 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
may be changed. Together with each such substitution, assumption or other
agreement or instrument delivered to the Trustee for execution by it, the
related Servicer shall deliver an Officer's Certificate signed by a Servicing
Officer stating that the requirements of this subsection have been met in
connection therewith. The related Servicer shall notify the Trustee that any
such substitution or assumption agreement has been completed by forwarding to
the 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 a Servicer for entering into an assumption or substitution of
liability agreement will be retained by such Servicer as additional servicing
compensation.

     SECTION 3.11 REALIZATION UPON DEFAULTED MORTGAGE LOANS; REPURCHASE OF
                  CERTAIN MORTGAGE LOANS.

     (a) Each Servicer shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
related 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, each Servicer shall take
such action as (i) such Servicer would take under similar circumstances with
respect to a similar mortgage loan held for its own account for investment, (ii)
shall be consistent with Accepted Servicing Practices, (iii) such Servicer shall
determine consistently with Accepted Servicing Practices to be in the best
interest of the Depositor, Trustee and Certificateholders, and (iv) is
consistent with the requirements of the insurer under any Required Insurance
Policy; provided, however, that such 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 related Mortgage
Loan after reimbursement to itself of such expenses and (ii) that such expenses
will be recoverable to it through Liquidation Proceeds (respecting which it
shall have priority for purposes of withdrawals from the related Collection
Account). The related Servicer shall be responsible for all other costs and
expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof from the Liquidation Proceeds with
respect to the related Mortgaged Property or otherwise pursuant to Section
3.08(a).

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     Notwithstanding anything to the contrary contained in this Agreement, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the related Servicer has reasonable cause to believe that a Mortgaged
Property is contaminated by hazardous or toxic substances or wastes, or if the
Trustee otherwise requests, an environmental inspection or review of such
Mortgaged Property conducted by a qualified inspector shall be arranged for by
such Servicer. Upon completion of the inspection, the related Servicer shall
promptly provide the Trustee with a written report of environmental inspection.

     In the event the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes,
the related Servicer shall not proceed with foreclosure or acceptance of a deed
in lieu of foreclosure if the estimated costs of the environmental clean up, as
estimated in the environmental inspection report, together with the Servicing
Advances made by such Servicer and the estimated costs of foreclosure or
acceptance of a deed in lieu of foreclosure exceeds the estimated value of the
Mortgaged Property. If however, the aggregate of such clean up and foreclosure
costs and Servicing Advances as estimated in the environmental inspection report
are less than or equal to the estimated value of the Mortgaged Property, then
the related Servicer may, in its reasonable judgment and in accordance with
Accepted Servicing Practices, choose to proceed with foreclosure or acceptance
of a deed in lieu of foreclosure and such Servicer shall be reimbursed for all
reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse such Servicer, such Servicer shall be entitled
to be reimbursed from amounts in the related Collection Account pursuant to
Section 3.08(a) hereof. In the event the related Servicer does not proceed with
foreclosure or acceptance of a deed in lieu of foreclosure pursuant to the first
sentence of this paragraph, such Servicer shall be reimbursed for all Servicing
Advances made with respect to the related Mortgaged Property from the related
Collection Account pursuant to Section 3.08(a) hereof, and such Servicer shall
have no further obligation to service such Mortgage Loan under the provisions of
this Agreement.

     (b) 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 its 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 related Servicer shall ensure that the title to
such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the related
Servicer shall in accordance with Accepted Servicing Practices manage, conserve,
protect and operate each REO Property for the purpose of its prompt disposition
and sale. The related Servicer, either itself or through an agent selected by
such Servicer, shall manage, conserve, protect and operate the REO Property in
the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. The related
Servicer shall furnish to the Trustee on or before each Distribution Date a
statement with respect to any REO Property covering the operation of such REO
Property for the previous calendar month and such other information as the
Trustee shall reasonably request and which 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 related
Collection Account no later than the close of business on each Determination
Date. The related Servicer shall perform the tax

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reporting and withholding required by Sections 1445 and 6050J of the Code with
respect to foreclosures and abandonments, the tax reporting required by Section
6050H of the Code with respect to the receipt of mortgage interest from
individuals and any tax reporting required by Section 6050P of the Code with
respect to the cancellation of indebtedness by certain financial entities, by
preparing such tax and information returns as may be required, in the form
required, and delivering the same to the Trustee for filing.

     To the extent consistent with Accepted Servicing Practices, the related
Servicer shall also maintain on each REO Property fire and hazard insurance with
extended coverage in amount which is equal to the outstanding principal balance
of the related Mortgage Loan (as reduced by any amount applied as a reduction of
principal at the time of acquisition of the REO Property), liability insurance
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required above.

     (c) 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 related Servicer shall dispose of such Mortgaged Property
prior to three years after the end of the calendar year of its acquisition by
the Trust Fund unless (i) the Trustee shall have been supplied with an Opinion
of Counsel 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 any REMIC hereunder as defined in
section 860F of the Code or cause any REMIC hereunder to fail to qualify as a
REMIC at any time that any Certificates are outstanding, in which case the Trust
Fund may continue to hold such Mortgaged Property (subject to any conditions
contained in such Opinion of Counsel) or (ii) the applicable Servicer shall have
applied for, prior to the expiration of such three-year period, an extension of
such three-year period in the manner contemplated by Section 856(e)(3) of the
Code, in which case the three-year period shall be extended by the applicable
extension period. 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 any REMIC
hereunder 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 related Servicer has agreed to indemnify and hold harmless
the Trust Fund with respect to the imposition of any such taxes.

     In the event of a default on a Mortgage Loan one or more of whose obligor
is not a United States Person, as that term is defined in Section 7701(a)(30) of
the Code, in connection with any foreclosure or acquisition of a deed in lieu of
foreclosure (together, "foreclosure") in respect of such Mortgage Loan, the
related Servicer will cause compliance with the provisions of Treasury
Regulation Section 1.1445-2(d)(3) (or any successor thereto) necessary to assure
that no withholding tax obligation arises with respect to the proceeds of such
foreclosure except to the extent, if any, that proceeds of such foreclosure are
required to be remitted to the obligors on such Mortgage Loan.

     (d) The decision of a Servicer to foreclose on a defaulted Mortgage Loan
shall be subject to a determination by such 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 REO

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Properties, net of reimbursement to such Servicer for expenses incurred
(including any property or other taxes) in connection with such management and
net of applicable accrued and unpaid Servicing Fees, and unreimbursed Advances
and Servicing Advances, 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 related Collection Account. To the extent the net income received during any
calendar month is in excess of the amount attributable to amortizing principal
and accrued interest at the related Mortgage Rate on the related Mortgage Loan
for such calendar month, such excess shall be considered to be a partial
prepayment of principal of the related Mortgage Loan.

     No Servicer shall acquire any Mortgaged Property on behalf of any REMIC
created hereunder in connection with a default or imminent default on a
Foreclosure Restricted Loan, if acquiring title to the Mortgaged Property
underlying the loan would cause the adjusted basis, for federal income tax
purposes, of these Mortgaged Properties owned by the related REMIC after
foreclosure, along with any other assets owned by the related REMIC other than
"qualified mortgages" and "permitted investments" within the meaning of Section
860G of the Code, to exceed 0.75% of the adjusted basis of the assets of the
related REMIC. If the adjusted basis of such Mortgaged Properties in
foreclosure, along with any other assets owned by the related REMIC, other than
"qualified mortgages" and "permitted investments" with the meaning of Section
860G of the Code, exceed 1.0% of the adjusted basis of the assets of the related
REMIC immediately after the distribution of principal and interest on any
Distribution Date, the applicable Servicer will dispose of enough of such
Mortgaged Properties in foreclosure, for cash or otherwise, so that the adjusted
basis of such Mortgaged Properties in foreclosure, along with any other assets
owned by the related REMIC, other than "qualified mortgages" and "permitted
investments" within the meaning of Section 860G of the Code, will be less than
1.0% of the adjusted basis of the assets of the related REMIC. Each Servicer
will provide notice to the other Servicer of any Foreclosure Restricted Loan in
order for the Servicers to make the determinations set forth in this clause (d).
In furtherance of the foregoing, a Servicer shall transfer such Foreclosure
Restricted Loans to Calmco in accordance with Section 3.04.

     (e) The proceeds from any liquidation of a Mortgage Loan, as well as any
income from an REO Property, will be applied in the following order of priority:
first, to reimburse the related Servicer for any related unreimbursed Servicing
Advances and Servicing Fees; second, to reimburse such Servicer for any
unreimbursed Advances; third, to reimburse the related Collection Account for
any Nonrecoverable Advances (or portions thereof) that were previously withdrawn
by such Servicer pursuant to Section 3.08(a)(iii) that related to such Mortgage
Loan; fourth, to accrued and unpaid interest (to the extent no Advance has been
made for such amount or any such Advance has been reimbursed) on the Mortgage
Loan or related REO Property, at the per annum rate equal to the related
Mortgage Rate reduced by the Servicing Fee Rate to the Due Date occurring in the
month in which such amounts are required to be distributed; and fifth, as a
recovery of principal of the Mortgage Loan. Excess Proceeds, if any, from the
liquidation of a Liquidated Mortgage Loan will be retained by the related
Servicer as additional servicing compensation pursuant to Section 3.14.

     (f) Calmco shall, at its option, enter into a special servicing agreement
with an unaffiliated Holder of the Class X Certificate, subject to each Rating
Agency's acknowledgment that the Ratings of the Certificates in effect
immediately prior to the entering into of such agreement

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would not be qualified, downgraded or withdrawn and the Certificates would not
be placed on credit review status (except for possible upgrading) as a result of
such agreement. Any such agreement may contain provisions whereby such Holder
may (i) instruct Calmco to commence or delay foreclosure proceedings with
respect to delinquent Mortgage Loans serviced by it and will contain provisions
for the deposit of cash with Calmco by the holder that would be available for
distribution to Certificateholders if Liquidation Proceeds are less than they
otherwise may have been had Calmco acted in accordance with its normal
procedures, (ii) purchase delinquent Mortgage Loans serviced by Calmco from the
Trust Fund immediately prior to the commencement of foreclosure proceedings at a
price equal to the aggregate outstanding Principal Balance of such Mortgage
Loans plus accrued interest thereon at the applicable Mortgage Rate through the
last day of the month in which such Mortgage Loan is purchased, and/or (iii)
assume all of the servicing rights and obligations with respect to delinquent
Mortgage Loans serviced by Calmco so long as such Holder (A) meets the
requirements for a Subservicer set forth in Section 3.02(a), and (B) will
service such Mortgage Loans in accordance with this Agreement.

     (g) The Holder of the Class X Certificate, at its option, may (but is not
obligated to) purchase from the Trust Fund any Mortgage Loan which is 90 or more
days delinquent. If it elects to make any such purchase, such Holder shall
purchase such Mortgage Loan with its own funds at a price equal to the
Repurchase Price.

     SECTION 3.12 TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.

     Upon the payment in full of any Mortgage Loan, or the receipt by a Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes, such Servicer will immediately notify the Trustee by
delivering, or causing to be delivered a "Request for Release" substantially in
the form of Exhibit M. Upon receipt of such request, the Trustee shall within
four Business Days release the related Mortgage File to the related Servicer,
and the Trustee shall within four Business Days of such Servicer's direction
execute and deliver to such 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 such Servicer, together with
the Mortgage Note with written evidence of cancellation thereon. Expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the related Mortgagor. 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 corrections to the Mortgage Note or the Mortgage or any of the
other documents included in the Mortgage File, the Trustee shall, within three
Business Days of delivery to the Trustee of a Request for Release in the form of
Exhibit M signed by a Servicing Officer, release the Mortgage File to the
related Servicer. Subject to the further limitations set forth below, the
related Servicer shall cause the Mortgage File or documents so released to be
returned to the Trustee when the need therefor by such Servicer no longer
exists, unless the Mortgage Loan is liquidated and the proceeds thereof are
deposited in the related Collection Account, in which case such Servicer shall
deliver to the Trustee a Request for Release in the form of Exhibit M, signed by
a Servicing Officer.

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     If a Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, such 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.

     SECTION 3.13 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF A SERVICER TO BE
                  HELD FOR THE TRUSTEE.

     Notwithstanding any other provisions of this Agreement, each Servicer shall
transmit to the Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
related Servicer from time to time required to be delivered to the Trustee
pursuant to the terms hereof and shall account fully to the Trustee for any
funds received by such Servicer or which otherwise are collected by such
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, a 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 a Collection Account,
shall be held by the related Servicer for and on behalf of the Trustee and shall
be and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. Each Servicer also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the related Collection Account, Certificate Account or any related Escrow
Account, 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 setoff against any Mortgage File
or any funds collected on, or in connection with, a Mortgage Loan, except,
however, that such Servicer shall be entitled to set off against and deduct from
any such funds any amounts that are properly due and payable to such Servicer
under this Agreement.

     SECTION 3.14 SERVICING FEE.

     As compensation for its services hereunder, each Servicer shall be entitled
to withdraw from the applicable Collection Account in accordance with Section
3.08(a) or to retain from interest payments on the related Mortgage Loans the
amount of the Servicing Fee for each Mortgage Loan, less any amounts in respect
of its Servicing Fee payable by such Servicer pursuant to Section 3.05(c)(vii).
In connection with the servicing of any Special Serviced Mortgage Loan, Calmco
shall receive the Servicing Fee for each such Mortgage Loan as its compensation.

     Additional servicing compensation in the form of Ancillary Income shall be
retained by the related Servicer. Each Servicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
(including the payment of any expenses incurred in connection with any
Subservicing Agreement entered into pursuant to Section 3.02 and the payment of
any premiums for hazard insurance and any Primary Insurance Policy, and
maintenance of the other

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forms of insurance coverage required by this Agreement other than the GEMICO
Policy) and shall not be entitled to reimbursement thereof except as
specifically provided for in this Agreement.

     SECTION 3.15 ACCESS TO CERTAIN DOCUMENTATION.

     Each Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of Subordinate Certificates and the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the related 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 designated by such Servicer. Nothing
in this Section shall limit the obligation of any Servicer to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of such Servicer to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.

     SECTION 3.16 ANNUAL STATEMENT AS TO COMPLIANCE.

     Each Servicer shall deliver to the Depositor, the Rating Agencies and the
Trustee on or before 120 days after the end of such Servicer's fiscal year,
commencing in its 2001 fiscal year, an Officer's Certificate stating, as to the
signer thereof, that (i) a review of the activities of such Servicer during the
preceding calendar year and of the performance of such 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, such 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 the action
being taken by such Servicer to cure such default.

     SECTION 3.17 ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING STATEMENT;
                  FINANCIAL STATEMENTS.

     On or before 120 days after the end of each Servicer's fiscal year,
commencing in its 2001 fiscal year, each Servicer at its expense shall cause a
nationally or regionally recognized firm of independent public accountants (who
may also render other services to such Servicer, the Seller or any affiliate
thereof) which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Trustee and the Depositor to the
effect that with respect to such Servicer, such firm has examined certain
documents and records relating to the servicing of mortgage loans which such
Servicer is servicing, including the related Mortgage Loans, and that, on the
basis of such examination, conducted substantially in compliance with the
Uniform Single Attestation Program for Mortgage Bankers or the Audit Guide for
HUD Approved Title II Approved Mortgagees and Loan Correspondent Programs,
nothing has come to their attention which would indicate that such servicing has
not been conducted in compliance with Accepted Servicing Practices, except for
(a) such exceptions as such firm shall believe to be immaterial, and (b) such
other exceptions as shall be set forth in such statement. In rendering such
statement, such firm may rely, as to matters relating to direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Guide for HUD Approved Title II
Approved Mortgagees and Loan

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Correspondent Programs (rendered within one year of such statement) of
independent public accountants with respect to the related Subservicer. Copies
of such statement shall be provided by the Trustee to any Certificateholder upon
request at the related Servicer's expense, provided such statement is delivered
by such Servicer to the Trustee.

     SECTION 3.18 MAINTENANCE OF FIDELITY BOND AND ERRORS AND OMISSIONS
                  INSURANCE.

     Each Servicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other persons acting in any
capacity requiring such persons to handle funds, money, documents or papers
relating to the related Mortgage Loans ("Servicer Employees"). Any such Fidelity
Bond and Errors and Omissions Insurance Policy shall be in the form of the
Financial Institution Bond Form 22 - Fidelity Bond American International
Specialty Lines Insurance Policy Form ("5713 5/93") Mortgage Banker Broker E&O
and shall protect and insure the related Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such Servicer Employees. Such Fidelity Bond and Errors and Omissions Insurance
Policy also shall protect and insure each Servicer against losses in connection
with the release or satisfaction of a related Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby. No provision of
this Section 3.18 requiring such Fidelity Bond and Errors and Omissions
Insurance Policy shall diminish or relieve a Servicer from its duties and
obligations as set forth in this Agreement. The minimum coverage under any such
bond and insurance policy shall be at least equal to the corresponding amounts
required by FNMA. Upon the request of the Trustee, the related Servicer shall
cause to be delivered to the Trustee a certificate of insurance of the insurer
and the surety including a statement from the surety and the insurer that such
fidelity bond and insurance policy shall in no event be terminated or materially
modified without 30 days' prior written notice to the Trustee.

     SECTION 3.19 PREPAYMENT PREMIUMS.

     Notwithstanding anything in this Agreement to the contrary, in the event of
a Principal Prepayment of a Mortgage Loan, a Servicer may not waive any
Prepayment Premium or portion thereof required by the terms of the related
Mortgage Note unless (i) the Servicer determines that such waiver would maximize
recovery of Liquidation Proceeds for such Mortgage Loan, taking into account the
value of such Prepayment Premium, or (ii) (A) the enforceability thereof is
limited (1) by bankruptcy, insolvency, moratorium, receivership, or other
similar law relating to creditors' rights generally or (2) due to acceleration
in connection with a foreclosure or other involuntary payment, or (B) the
enforceability is otherwise limited or prohibited by applicable law. For the
avoidance of doubt, the Servicer may waive a Prepayment Premium in connection
with a short sale or short payoff on a defaulted Mortgage Loan. If a Servicer
has waived all or a portion of a Prepayment Premium relating to a Principal
Prepayment, other than as provided above, such Servicer shall deliver to the
Trustee no later than the next succeeding Servicer Remittance Date, for deposit
into the Certificate Account the amount of such Prepayment Premium (or such
portion thereof as had been waived) for distribution in accordance with the
terms of this Agreement. If a Servicer has waived all or a portion of a
Prepayment Premium for any reason, it shall promptly notify the Trustee thereof
and shall include such information in any monthly reports it provides the
Trustee.

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                                   ARTICLE IV

                                DISTRIBUTIONS AND
                            ADVANCES BY THE SERVICERS

     SECTION 4.01 ADVANCES BY THE SERVICER.

     Each Servicer shall deposit in the related Collection Account at the time
described below an amount equal to (i) with respect to the Mortgage Loans other
than the Simple Interest Mortgage Loans, all Scheduled Payments (with interest
at the Mortgage Rate less the Servicing Fee Rate) which were due on the related
Mortgage Loans during the applicable Due Period and (ii) with respect to the
Simple Interest Mortgage Loans, 30 day's interest on each such Mortgage Loan,
less the Servicing Fee and, with respect to such Simple Interest Mortgage Loan,
which were delinquent at the close of business on the immediately preceding
Determination Date; provided however, that with respect to any Balloon Loan that
is delinquent on its maturity date, the related Servicer will not be required to
advance the related balloon payment but will be required to continue to make
advances in accordance with this Section 4.01 with respect to such Balloon Loan
in an amount equal to an assumed scheduled payment that would otherwise be due
based on the original amortization schedule for that Mortgage Loan (with
interest at the Mortgage Rate less the Servicing Fee Rate). Each Servicer's
obligation to make such Advances as to any related Mortgage Loan will continue
through the last Scheduled Payment due prior to the payment in full of such
Mortgage Loan, 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 the terms of this Agreement.

     To the extent required by Accepted Servicing Practices, each Servicer shall
be obligated to make Advances with respect to those Mortgage Loans serviced by
it in accordance with the provisions of this Agreement; provided however, that
such obligation with respect to any related Mortgage Loan shall cease if such
Servicer determines, in its sole discretion, that Advances with respect to such
Mortgage Loan are Nonrecoverable Advances. In the event that such Servicer
determines that any such advances are Nonrecoverable Advances, such Servicer
shall provide the Trustee with a certificate signed by a Servicing Officer
evidencing such determination.

     If an Advance is required to be made hereunder, the related Servicer shall
on the applicable Servicer Remittance Date immediately following the
Determination Date either (i) deposit in the related Collection Account from its
own funds an amount equal to such Advance, (ii) cause to be made an appropriate
entry in the records of such Collection Account that funds in such account being
held for future distribution or withdrawal have been, as permitted by this
Section 4.01, used by the Servicer to make such Advance or (iii) make Advances
in the form of any combination of clauses (i) and (ii) aggregating the amount of
such Advance. Any such funds being held in a Collection Account for future
distribution and so used shall be replaced by such Servicer from its own funds
by deposit in such Collection Account on or before any future Distribution Date
in which such funds would be due.

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     SECTION 4.02 PRIORITIES OF DISTRIBUTION.

     (a) (i) On each Distribution Date, the Trustee shall distribute the
Interest Remittance Amount for such date in the following order of priority:

     A.   to the PMI Sub-Account, the GEMICO PMI Fee for such Distribution Date;

     B.   to the Senior Certificates, pro rata, Current Interest and any
          Carryforward Interest for each such Class and such Distribution Date;

     C.   to the Class M-1 Certificates, Current Interest and any Carryforward
          Interest for such Class and such Distribution Date;

     D.   to the Class M-2 Certificates, Current Interest and any Carryforward
          Interest for such Class and such Distribution Date;

     E.   to the Class B Certificates, Current Interest and any Carryforward
          Interest for such Class and such Distribution Date; and

     F.   for application as part of Monthly Excess Cashflow for such
          Distribution Date as provided in clause (iv) of this Section 4.02(a),
          any Interest Remittance Amount remaining after application pursuant to
          clauses A. through E. above.

          (ii) On each Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has occurred, the Trustee shall distribute
the Principal Payment Amount for such date in the following order of priority:

     A.   first to the Class R Certificates, until the Class Principal Balance
          thereof is reduced to zero and then concurrently to the Class A-1 and
          Class A-2 Certificates in the manner described in Section 4.02(b),
          until the Class Principal Balance of each such Class has been reduced
          to zero;

     B.   to the Class M-1 Certificates, until the Class Principal Balance of
          such Class has been reduced to zero;

     C.   to the Class M-2 Certificates, until the Class Principal Balance of
          such Class has been reduced to zero;

     D.   to the Class B Certificates, until the Class Principal Balance of such
          Class has been reduced to zero; and

     E.   for application as part of Monthly Excess Cashflow for such
          Distribution Date, as provided in clause (iv) of this Section 4.02(a),
          any Principal Payment Amount remaining after application pursuant to
          clauses A. through D. above.

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          (iii) On each Distribution Date (a) on or after the Stepdown Date and
(b) with respect to which a Trigger Event has not occurred, the Trustee shall
distribute the Principal Payment Amount for such date in the following order of
priority:

     A.   concurrently, to the Class A-1 and Class A-2 Certificates, the Senior
          Principal Payment Amount for such Distribution Date in the manner
          described in Section 4.02(b), until the Class Principal Balance of
          each such Class has been reduced to zero;

     B.   to the Class M-1 Certificates, the M-1 Principal Payment Amount for
          such Distribution Date, until the Class Principal Balance of such
          Class has been reduced to zero;

     C.   to the Class M-2 Certificates, the M-2 Principal Payment Amount for
          such Distribution Date, until the Class Principal Balance of such
          Class has been reduced to zero;

     D.   to the Class B Certificates, the B Principal Payment Amount for such
          Distribution Date, until the Class Principal Balance of such Class has
          been reduced to zero; and

     E.   for application as part of Monthly Excess Cashflow for such
          Distribution Date, as provided in clause (iv) of this Section 4.02(a),
          any Principal Payment Amount remaining after application pursuant to
          clauses A. through D. above.

          (iv) On each Distribution Date, except for the first Distribution
Date, the Trustee shall distribute the Monthly Excess Cashflow for such date in
the following order of priority:

     A.   (I) until the aggregate Class Principal Balance of the Offered
          Certificates equals the Aggregate Loan Balance for such Distribution
          Date minus the Targeted Overcollateralization Amount for such date, on
          each Distribution Date (a) prior to the Stepdown Date or (b) with
          respect to which a Trigger Event has occurred, to the extent of
          Monthly Excess Interest for such distribution date, to the Offered
          Certificates, in the following order of priority:

          (aa) first to the Class R and then, concurrently, to the Class A-1 and
               Class A-2 Certificates, in the manner described in Section
               4.02(b), until the Class Principal Balance of each such Class has
               been reduced to zero;

          (bb) to the Class M-1 Certificates, until the Class Principal Balance
               of such Class has been reduced to zero;

          (cc) to the Class M-2 Certificates, until the Class Principal Balance
               of such Class has been reduced to zero; and

          (dd) to the Class B Certificates, until the Class Principal Balance of
               such Class has been reduced to zero;

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          (II) on each Distribution Date on or after the Stepdown Date and with
          respect to which a Trigger Event has not occurred, to fund any
          principal distributions required to be made on such Distribution Date
          set forth above in clause (iii) above, after giving effect to the
          distribution of the Principal Payment Amount for such Distribution
          Date, in accordance with the priorities set forth therein;

     B.   to the Class M-1 Certificates, any Deferred Amount for such Class,
          with interest thereon at the Pass-Through Rate;

     C.   to the Class M-2 Certificates, any Deferred Amount for such Class,
          with interest thereon at the Pass-Through Rate;

     D.   to the Class B Certificates, any Deferred Amount for such Class, with
          interest thereon at the Pass-Through Rate;

     E.   to the Class A-2 Certificates, any applicable Basis Risk Shortfall for
          such Classes;

     F.   to the Class M-1 Certificates, any applicable Basis Risk Shortfall for
          such Class;

     G.   to the Class M-2 Certificates, any applicable Basis Risk Shortfall for
          such Class;

     H.   to the Class B Certificates, any applicable Basis Risk Shortfall for
          such Class;

     I.   to the Basis Risk Reserve Fund, the Required Basis Risk Reserve Fund
          Deposit;

     J.   to the Class X Certificate, the Class X Distributable Amount for such
          Distribution Date, together with any amounts withdrawn from the Basis
          Risk Reserve Fund for distribution to such Class X Certificate
          pursuant to Sections 4.07(b) and (c); and

     K.   to the Class R Certificate, any remaining amount.

          (v) On each Distribution Date, the Trustee shall distribute to the
     Holder of the Class P Certificate, the aggregate of all Prepayment Premiums
     collected during the preceding Prepayment Period.

          (vi) On the first Distribution Date only, the Trustee shall distribute
     the Monthly Excess Cashflow for such date to the Class X Certificate.

     (b) Distributions of principal on the Class A-1 and Class A-2 Certificates
on each Distribution Date will be made concurrently, in each case in accordance
with the percentage of the amounts described in clauses (1) through (5) in the
definition of Principal Remittance Amount derived from the related Loan Group
(such percentages, the "Applicable Percentages"), until the Class Principal
Balances of the Class A-1 and Class A-2 Certificates have been reduced to zero.
If on any Distribution Date one of the Class A-1 or Class A-2 Certificates is
reduced to zero, the remaining amount of principal available to be allocated to
such Class on such Distribution Date will be distributed to the remaining
Classes of Senior Certificates based upon the Applicable Percentages

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(allocated based on the ratio of the remaining Classes' Senior Certificates'
Applicable Percentage) for such Distribution Date. Additionally, any amounts
available to be paid as principal to the Senior Certificates remaining after
giving effect to the allocation rules in Section 4.02(a)(ii)(A) or
4.02(a)(iii)(A) on any Distribution Date, will be paid sequentially to the Class
A-1 and Class A-2 Certificates, in that order, until their Class Principal
Balances have been reduced to zero.

     SECTION 4.03 ALLOCATION OF LOSSES.

     (a) On each Distribution Date, the Trustee shall determine the total of the
Applied Loss Amount, if any, for such Distribution Date. The Applied Loss Amount
for any Distribution Date shall be applied by reducing the Class Principal
Balance of each Class of Subordinate Certificates beginning with the Class of
Subordinate Certificates then outstanding with the lowest relative payment
priority, in each case until the respective Class Principal Balance thereof is
reduced to zero. Any Applied Loss Amount allocated to a Class of Subordinate
Certificates shall be allocated among the Subordinate Certificates of such Class
in proportion to their respective Percentage Interests.

     (b) All Realized Losses on the Mortgage Loans shall be deemed to have been
allocated in the specified percentages, as follows: with respect to Realized
Losses on the Group I Mortgage Loans, first, to Uncertificated Accrued Interest
payable to the REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1F
up to an aggregate amount equal to the REMIC 1 Group I Interest Loss Allocation
Amount, 98% and 2%, respectively; second, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1F up
to an aggregate amount equal to the REMIC 1 Group I Principal Loss Allocation
Amount, 98% and 2%, respectively; third, to the Uncertificated Principal
Balances of REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest LT1E and
REMIC 1 Regular Interest LT1F, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E has been
reduced to zero; fourth, to the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1D and REMIC 1 Regular
Interest LT1F, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1D has been reduced to zero; and fifth to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1C and REMIC 1 Regular Interest LT1F, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1C has been reduced to zero; and with respect to Realized Losses on
the Loan Group 2 Mortgage Loans, first, to Uncertificated Accrued Interest
payable to the REMIC 1 Regular Interest LT1G and REMIC 1 Regular Interest LT1L
up to an aggregate amount equal to the REMIC 1 Loan Group 2 Interest Loss
Allocation Amount, 98% and 2%, respectively; second, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1G and REMIC 1 Regular Interest
LT1L up to an aggregate amount equal to the REMIC 1 Loan Group 2 Principal Loss
Allocation Amount, 98% and 2%, respectively; third, to the Uncertificated
Principal Balances of REMIC 1 Regular Interest LT1G, REMIC 1 Regular Interest
LT1K and REMIC 1 Regular Interest LT1L, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1K has been
reduced to zero; fourth, to the Uncertificated Principal Balance of REMIC 1
Regular Interest LT1G, REMIC 1 Regular Interest LT1J and REMIC 1 Regular
Interest LT1L, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1J has been reduced to zero; and fifth to
the Uncertificated Principal Balances of REMIC 1 Regular Interest LT1G, REMIC 1
Regular Interest

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LT1I and REMIC 1 Regular Interest LT1L, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1I has been
reduced to zero.

     SECTION 4.04 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 Certificateholder, each
Servicer, the Depositor and each Rating Agency, a statement setting forth with
respect to the related distribution:

          (i) the amount thereof allocable to principal, indicating the portion
     thereof attributable to Scheduled Payments and Principal Prepayments;

          (ii) the amount thereof allocable to interest or any Carryforward
     Interest included in such distribution;

          (iii) if the distribution to the Holders of such Class of Certificates
     is less than the full amount that would be distributable to such Holders if
     there were sufficient funds available therefor, the amount of the shortfall
     and the allocation thereof as between principal and interest;

          (iv) the Class Principal Balance of each Class of Certificates after
     giving effect to the distribution of principal on such Distribution Date;

          (v) the Aggregate Loan Balance and Aggregate Loan Group Balance in
     each case, for such Distribution Date;

          (vi) the amount of the Servicing Fees and GEMICO PMI Fees, if
     applicable, and any other Primary Insurance Policy premiums, if applicable,
     with respect to such Distribution Date;

          (vii) the Pass-Through Rate for each Class of LIBOR Certificates with
     respect to such Distribution Date;

          (viii) the amount of Advances included in the distribution on such
     Distribution Date and the aggregate amount of Advances outstanding as of
     the last day of the calendar month preceding such Distribution Date.

          (ix) the number and aggregate principal amounts of Mortgage Loans in
     foreclosure or delinquent (with a notation indicating which Mortgage Loans,
     if any, are in foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (4) 90
     or more days, as of the close of business on the last day of the calendar
     month preceding such Distribution Date;

          (x) the number and aggregate principal amounts of Mortgage Loans with
     respect to which Prepayment Premiums were collected and the aggregate
     amount of such Prepayment Premiums;

          (xi) the Rolling Three Month Delinquency Rate for such Distribution
     Date;

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          (xii) the total number and principal balance of any REO Properties
     (and market value, if available) as of the last day of the calendar month
     preceding such Distribution Date.

          (xiii) the aggregate amount of Realized Losses incurred during the
     preceding calendar month and aggregate Realized Losses included in such
     distribution;

          (xiv) the weighted average term to maturity of the Mortgage Loans as
     of the close of business on the last day of the calendar month preceding
     such Distribution Date; and

          (xv) the number and principal amount of claims submitted and claims
     paid under the GEMICO PMI Policy during the preceding calendar month and
     the number and principal amount of claims submitted and claims paid under
     the GEMICO PMI Policy as of the last day of the calendar month preceding
     such Distribution Date.

     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 Servicers.

     On each Distribution Date, the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") Cusip Level Factors for each Class of Offered
Certificates as of such Distribution Date, using a format and media mutually
acceptable to the Trustee and Bloomberg. In connection with providing the
information specified in this Section 4.05 to Bloomberg, the Trustee and any
director, officer, employee or agent of the Trustee shall be indemnified and
held harmless by DLJMC, to the extent, in the manner and subject to the
limitations provided in Section 8.05. The Trustee will also make the monthly
statements to Certificateholders available each month to each party referred to
in Section 4.05(a) via the Trustee's website. The Trustee's website can be
accessed at http://www.chase.com/sfa or at such other site as the Trustee may
designate from time to time. The Trustee may fully rely upon and shall have no
liability with respect to information provided by the Servicer.

     (b) Upon request, 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)(vii) 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.

     SECTION 4.05 SERVICERS TO COOPERATE.

     Each Servicer shall provide to the Trustee information which is mutually
agreeable to the Trustee and the applicable Servicer with respect to each
Mortgage Loan serviced by such Servicer no later than the Servicer Remittance
Date necessary to enable the Trustee to perform its distribution, accounting and
reporting requirements hereunder.

     SECTION 4.06 BASIS RISK RESERVE FUND.

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     (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 Basis
Risk Reserve Fund. The Basis Risk 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.

     (b) On the Closing Date, $5,000 will be deposited by the Depositor into the
Basis Risk Reserve Fund. On each Distribution Date, the Trustee shall transfer
from the Certificate Account to the Basis Risk Reserve Fund pursuant to Section
4.02(a)(iv)I., the Required Basis Risk Reserve Fund Deposit. Amounts on deposit
in the Basis Risk Reserve Fund can be withdrawn by the Trustee in connection
with any Distribution Date to fund the amounts required to be distributed to
holders of the Offered Certificates pursuant to Sections 4.02(a)(iv) E. through
H. to the extent Monthly Excess Cashflow on such date is insufficient to make
such payments. On any Distribution Date, any amounts on deposit in the Basis
Risk Reserve Fund in excess of the Required Basis Risk Reserve Fund Amount shall
be distributed to the Class X Certificateholder pursuant to Section
4.02(a)(iv)J.

     (c) Funds in the Basis Risk Reserve Fund may be invested in Eligible
Investments by the Trustee at the direction of the holder of the Class X
Certificate. Any net investment earnings on such amounts shall be payable to the
holder of the Class X Certificate. The Class X Certificate shall evidence
ownership of the Basis Risk Reserve Fund for federal tax purposes and the
Holders thereof shall direct the Trustee in writing as to the investment of
amounts therein. In the absence of such written direction, all funds in the
Basis Risk Reserve Fund shall be invested by the Trustee in the Chase Vista
Prime Money Market Fund. The Trustee shall have no liability for losses on
investments in Eligible Investments made pursuant to this Section 4.07(c) (other
than as obligor on any such investments). Upon termination of the Trust Fund,
any amounts remaining in the Basis Risk Reserve Fund shall be distributed to the
Holder of the Class X Certificate in the same manner as if distributed pursuant
to Section 4.02(a)(iv)J. hereof.

     (d) On the Distribution Date immediately after the Distribution Date on
which the aggregate Class Principal Balance of the LIBOR Certificates equals
zero, any amounts on deposit in the Basis Risk Reserve Fund not payable on the
LIBOR Certificates shall be deposited into the Certificate Account and
distributed to the Holder of the Class X Certificate in the same manner as if
distributed pursuant to Section 4.02(a)(iv)J. hereof.

     SECTION 4.07 DISTRIBUTIONS ON THE REMIC REGULAR INTERESTS.

     (a) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 1 to REMIC 2
on account of the REMIC 1 Regular Interests or withdrawn from the Distribution
Account and distributed to the holders of the Class R Certificates (in respect
of the Class R-1 Interest), as the case may be:

          (i) first, to the extent of the sum of the Interest Remittance Amount
     and the Principal Remittance Amount, to Holders of REMIC 1 Regular Interest
     LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1
     Regular Interest LT1D, REMIC 1 Regular Interest LT1E, REMIC 1 Regular
     Interest LT1F, REMIC 1 Regular

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     Interest LT1G, REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest
     LT1I, REMIC 1 Regular Interest LT1J, REMIC 1 Regular Interest LT1K and
     REMIC 1 Regular Interest LT1L, 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 1 Regular Interest LT1F and REMIC 1 Regular Interest LT1L shall be
     reduced when the REMIC 1 Overcollateralization Amount is less than the
     REMIC 1 Overcollateralization Target Amount, by the lesser of (x) the
     amount of such difference and (y) the Maximum Uncertificated Accrued
     Interest Deferral Amount; such reduction shall be apportioned between REMIC
     1 Regular Interest LT1F and REMIC 1 Regular Interest LT1L PRO RATA with
     their relative Uncertificated Principal Balances. The amount of such
     reduction apportioned to REMIC 1 Regular Interest LT1F will be payable to
     the Holders of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
     LT1C, REMIC 1 Regular Interest LT1D, and REMIC 1 Regular Interest LT1E, and
     the amount of such reduction apportioned to REMIC 1 Regular Interest LT1L
     will be payable to REMIC 1 Regular Interest LT1H, REMIC 1 Regular Interest
     LT1I, REMIC 1 Regular Interest LT1J and REMIC 1 Regular Interest LT1K in
     the same proportion as the Extra Principal Distribution Amount is allocated
     to the Corresponding Certificates; and

          (ii) second, to the Holders of REMIC 1 Regular Interests, in an amount
     equal to the remainder of the Interest Remittance Amount and Principal
     Remittance Amount for such Distribution Date after the distributions made
     pursuant to clause (i) above, allocated as follows:

               (a) with respect to the Loan Group 1 Mortgage Loans, to the
          Holders of REMIC 1 Regular Interest LT1A, 98.00% of such remainder,
          until the Uncertificated Principal Balance of such Uncertificated
          REMIC 1 Regular Interest is reduced to zero and with respect to the
          Loan Group 2 Mortgage Loans, to the Holders of REMIC 1 Regular
          Interest LT1G, 98.00% of such remainder, until the Uncertificated
          Principal Balance of such Uncertificated REMIC 1 Regular Interest is
          reduced to zero;

               (b) with respect to the Loan Group 1 Mortgage Loans, to the
          Holders of REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
          LT1C, REMIC 1 Regular Interest LT1D and REMIC 1 Regular Interest LT1E,
          1.00% of such remainder, in the same proportion as principal payments
          from Loan Group 1 are allocated to the Corresponding Certificates,
          until the Uncertificated Principal Balances of such REMIC 1 Regular
          Interests are reduced to zero and with respect to the Group 2 Mortgage
          Loans, to the Holders of REMIC 1 Regular Interest LT1H, REMIC 1
          Regular Interest LT1I, REMIC 1 Regular Interest LT1J and REMIC 1
          Regular Interest LT1K, 1.00% of such remainder, in the same proportion
          as principal payments are allocated to the Corresponding Certificates,
          until the Uncertificated Principal Balances of such REMIC 1 Regular
          Interests are reduced to zero;

               (c) with respect to the Loan Group 1 Mortgage Loans, to the
          Holders of REMIC 1 Regular Interest LT1F, 1.00% of such remainder,
          until the Uncertificated Principal Balance of such REMIC 1 Regular
          Interest is reduced to zero and with

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          respect to the Loan Group 2 Mortgage Loans, to the Holders of REMIC 1
          Regular Interest LT1L, 1.00% of such remainder, until the
          Uncertificated Principal Balance of such REMIC 1 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-1 Interest);

provided, however, that with respect to the Loan Group 1 Mortgage Loans, 98.00%
and 2.00% of any principal payments that are attributable to an
Overcollateralization Release Amount shall be allocated to Holders of REMIC 1
Regular Interest LT1A and REMIC 1 Regular Interest LT1F, respectively and with
respect to the Loan Group 2 Mortgage Loans, 98.00% and 2.00% of any principal
payments that are attributable to an Overcollateralization Release Amount shall
be allocated to Holders of REMIC 1 Regular Interest LT1G and REMIC 1 Regular
Interest LT1L, respectively.

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                                    ARTICLE V

                                THE CERTIFICATES

     SECTION 5.01 THE CERTIFICATES.

     The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount which must be in excess of the
applicable minimum denomination) and aggregate denominations per Class set forth
in the Preliminary Statement.

     Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) 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 five Business Days prior to the related Record
Date and (ii) such Holder shall hold (A) a Notional Amount Certificate, (B) 100%
of the Class Principal Balance of any Class of Certificates or (C) Certificates
of any Class with aggregate principal Denominations of not less than $1,000,000
or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.

     The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer upon the written order of the
Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time 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
countersignature and delivery of any such Certificates or did not hold such
offices at the date of such Certificate. No Certificate shall be entitled to any
benefit under this Agreement, or be valid for any purpose, unless countersigned
by the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly executed and delivered hereunder. All Certificates
shall be dated the date of their countersignature. On the Closing Date, the
Trustee shall countersign the Certificates to be issued at the written direction
of the Depositor, or any affiliate thereof.

     The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of Certificates to facilitate transfers.

     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 5.06, 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 Certificate,
the

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Trustee shall execute and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and 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 which 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 cancelled and subsequently disposed of 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 said Act and such state securities laws. Except in connection
with any transfer of a Private Certificate by the Depositor to any affiliate, in
the event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the Securities
Act and such 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 form
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 transferor 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 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 Depositor, the Seller and each 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

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and substance satisfactory to the Trustee (in the event such Certificate is a
Private Certificate or a Residual 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), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA or a plan subject to Section 4975 of the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, or (ii) in the case of any such
ERISA-Restricted 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 or holding of such ERISA-Restricted
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee or the Servicers to any obligation in
addition to those expressly undertaken in this Agreement or to any liability. In
the event that a representation is violated, or any attempt to transfer to a
plan or person acting on behalf of a plan or using a plan's assets is attempted
without the delivery to the trustee of the opinion of counsel described above,
the attempted transfer or acquisition shall be void and of no effect.

     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
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
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:

          (i) Each Person holding or acquiring any Ownership Interest in a
     Residual 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 Residual Certificate may be registered
     on the Closing Date or thereafter transferred, and the Trustee shall not
     register the Transfer of any Residual Certificate unless, in addition to
     the certificates 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
     Residual 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 Residual Certificate, (B) to obtain a

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     Transfer Affidavit from any Person for whom such Person is acting as
     nominee, trustee or agent in connection with any Transfer of a Residual
     Certificate and (C) not to Transfer its Ownership Interest in a Residual
     Certificate or to cause the Transfer of an Ownership Interest in a Residual
     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 Residual 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 Residual 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 Residual Certificate. The Trustee shall be under no
     liability to any Person for any registration of Transfer of a Residual
     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 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 Residual
     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 Residual 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 Residual Certificate to any Holder
     who is not a Permitted Transferee.

     The restrictions on Transfers of a Residual Certificate set forth in this
Section 5.02(c) shall cease to apply (and the applicable portions of the legend
on a Residual 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 any
Servicer, to the effect that the elimination of such restrictions will not cause
the 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 Residual Certificate hereby consents to any
amendment of this Agreement which, 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 Residual 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 Residual Certificate which 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 certificates and opinions referred
to above in this Section 5.02 in connection with transfer shall be at the
expense of the parties to such transfers.

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     (e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.

     All transfers by Certificate Owners of 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 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.

     If (x) (i) the Depository or the Depositor advises the Trustee in writing
that the Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (ii) the Trustee or the Depositor is unable
to locate a qualified successor, (y) the Depositor at its option advises the
Trustee in writing that it elects to terminate the book-entry system through the
Depository or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants 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,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. None of the Seller, the Servicers, the Depositor or the Trustee
shall be liable for any delay in delivery of such instruction and each may
conclusively rely on, and shall be protected in relying on, such instructions.
The Depositor shall provide the Trustee with an adequate inventory of
certificates to facilitate the issuance and transfer of Definitive Certificates.
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; provided
that the Trustee shall not by virtue of its assumption of such obligations
become liable to any party for any act or failure to act of the Depository.

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     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 (b) there is delivered to the Trustee such security or
indemnity as may be required by it to hold it 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, countersign 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 Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, 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 Servicers and the Trustee and any agent of any 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 none of the Servicers or
the Trustee or any agent of the Servicers 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 which
such Certificateholders propose to transmit, or if the Depositor or the 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 Servicer or such Certificateholders at such recipients' expense
the most recent list of the Certificateholders of such 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 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, New York where Certificates
may be surrendered for registration of transfer or exchange. The Trustee
initially designates its Corporate Trust Office 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 SELLER AND THE SERVICERS

     SECTION 6.01 RESPECTIVE LIABILITIES OF THE DEPOSITOR, THE SELLER AND THE
                  SERVICERS.

     The Depositor, the Seller and each Servicer 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 SELLER OR A
                  SERVICER.

     The Depositor, the Seller and each Servicer will each 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 respective duties under this Agreement.

     Any Person into which the Depositor, the Seller or a Servicer may be merged
or consolidated, or any Person resulting from any merger or consolidation to
which the Depositor, the Seller or a Servicer shall be a party, or any person
succeeding to the business of the Depositor, the Seller or a Servicer, shall be
the successor of the Depositor, the Seller or the related 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 with
respect to a merger or consolidation of a Servicer shall be an institution
either (i) having a net worth of not less than $10,000,000 or whose deposits are
insured by the FDIC through the BIF or the SAIF, and (ii) which is a
FNMA-approved company in good standing. In addition to the foregoing, there must
be delivered to the Trustee a letter from each of the Rating Agencies to the
effect that such merger, conversion or consolidation of a Servicer will not
result in a qualification, withdrawal or downgrade of the then current rating of
any of the Certificates.

     SECTION 6.03 LIMITATION ON LIABILITY OF THE DEPOSITOR, THE SELLER, THE
                  SERVICERS AND OTHERS.

     (a) None of the Depositor, the Seller, any Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Seller or any
Servicer shall be under any liability to 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 Seller, any Servicer or any such
Person against any breach of representations or warranties made by it herein or
protect the Depositor, the Seller, any Servicer or any such Person from any
liability which 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, each Servicer and any director, officer, employee or agent of the
Depositor, the Seller or a Servicer may rely in good faith on any document of
any kind prima facie properly executed and submitted by any Person respecting

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any matters arising hereunder. None of the Depositor, the Seller or any 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 which in its
opinion may involve it in any expense or liability; provided, however, that any
of the Depositor, the Seller or any 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 each Servicer
shall be entitled to be reimbursed therefor from the Trust Fund.

     (b) Each Servicer shall indemnify the Trustee and hold it harmless against
any and all claims, losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee may sustain in any way related to the failure of
such Servicer to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. Each Servicer immediately shall
notify the Trustee if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Trustee) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Trustee in respect of
such claim. The applicable Servicer shall follow any written instructions
received from the Trustee in connection with such claim. Except as otherwise
provided herein, the Trustee promptly shall reimburse such Servicer for all
amounts advanced by it pursuant to the preceding sentence except when the claim
is in any way related to the failure of such Servicer to service and administer
the Mortgage Loans in strict compliance with the terms of this Agreement.

     SECTION 6.04 LIMITATION ON RESIGNATION OF A SERVICER.

     (a) Subject to Section 6.04(b) below, a Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) upon appointment of a
successor servicer or special servicer (which may be with respect to all or a
portion of the Special Serviced Mortgage Loans), and receipt by the Trustee of a
letter from each Rating Agency that such a resignation and appointment will not
result in a downgrading of the rating of any of the Certificates related to the
applicable Mortgage Loans, or (ii) upon determination that its duties hereunder
are no longer permissible under applicable law. Any such determination under
clause (ii) permitting the resignation of a 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 shall have
assumed such Servicer's or the Special Servicer's responsibilities, duties,
liabilities and obligations hereunder.

     (b) Notwithstanding the foregoing, the Class X Certificateholder or its
transferee shall be entitled to request that Calmco resign and appoint a
successor servicer; provided that such entity delivers to the Trustee the letter
required by 6.04(a)(i) above.

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                                   ARTICLE VII

                                     DEFAULT

     SECTION 7.01 EVENTS OF DEFAULT.

     "Event of Default", wherever used herein, means any one of the following
events:

          (i) any failure by a Servicer to make any deposit or payment required
     pursuant to this Agreement (including but not limited to Advances to the
     extent required under Section 4.01) which continues unremedied for a period
     of three days after the date upon which written notice of such failure,
     requiring the same to be remedied, shall have been given to such Servicer
     by the Trustee or the Depositor, or to such Servicer and the Trustee by the
     Holders of Certificates having not less than 25% of the Voting Rights
     evidenced by the Certificates; or

          (ii) any failure by a Servicer duly to observe or perform in any
     material respect any other of the covenants or agreements on the part of
     such Servicer set forth in this Agreement, or if any of the representations
     and warranties of such Servicer in Section 2.03(a) proves to be untrue in
     any material respect, which failure or breach continues unremedied for a
     period of 30 days after the date on which written notice of such failure or
     breach, requiring the same to be remedied, shall have been given to such
     Servicer by the Trustee or the Depositor, or to such Servicer and the
     Trustee by the Holders of Certificates having not less than 25% of the
     Voting Rights evidenced by the Certificates; or;

          (iii) failure by a Servicer to maintain, if required, its license to
     do business in any jurisdiction where the related Mortgaged Property is
     located; or

          (iv) a decree or order of a court or agency or supervisory authority
     having jurisdiction for the appointment of a conservator or receiver or
     liquidator in any insolvency, readjustment of debt, including bankruptcy,
     marshaling of assets and liabilities or similar proceedings, or for the
     winding-up or liquidation of its affairs, shall have been entered against a
     Servicer and such decree or order shall have remained in force undischarged
     or unstayed for a period of 60 consecutive days; or

          (v) a Servicer shall consent to the appointment of a conservator or
     receiver or liquidator in any insolvency, readjustment of debt, marshaling
     of assets and liabilities or similar proceedings of or relating to such
     Servicer or of or relating to all or substantially all of its property; or

          (vi) a 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, bankruptcy or
     reorganization statute, make an assignment for the benefit of its
     creditors, voluntarily suspend payment of its obligations; or

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          (vii) a Servicer ceases to meet the qualifications of a FNMA-approved
     servicer; or

          (viii) (A) Cumulative Net Losses exceed 8% of the aggregate Stated
     Principal Balance of the Calmco Serviced Loans or Old Kent Serviced Loans,
     as applicable, other than Special Serviced Mortgage Loans, as of the
     applicable Cut-Off Date, (B) Cumulative Net Losses in any twelve-month
     period exceed 3% of the aggregate Stated Principal Balance of the Calmco
     Serviced Loans or Old Kent Serviced Loans, as applicable, other than
     Special Serviced Mortgage Loans, as of the applicable Cut-Off Date or (B)
     the applicable Sixty Day Plus Rolling Average exceeds 20%.

     Other than an Event of Default resulting from a failure of a Servicer to
make any required Advance, if an Event of Default shall occur and a Responsible
Officer of the Trustee has knowledge thereof, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, or at the direction of the Holders of Certificates evidencing not less than
51% of the Voting Rights evidenced by the Certificates, the Trustee shall by
notice in writing to such Servicer (with a copy to each Rating Agency),
terminate all of the rights and obligations of such Servicer under this
Agreement and in and to the related Mortgage Loans and the proceeds thereof,
other than its rights as a Certificateholder hereunder. If an Event of Default
results from the failure of such Servicer to make a required Advance, the
Trustee shall, by notice in writing to such Servicer and the Depositor (with a
copy to each Rating Agency), terminate all of the rights and obligations of such
Servicer under this Agreement and in and to the related Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder.

     Upon receipt by a Servicer of such written notice of termination, all
authority and power of such Servicer under this Agreement, whether with respect
to the related Mortgage Loans or otherwise, shall pass to and be vested in the
Trustee or its nominee, subject to Section 7.02. Upon written request from the
Trustee, such Servicer shall prepare, execute and deliver to the successor
entity designated by the Trustee any and all documents and other instruments,
place in such successor's possession all related Mortgage Files, and do or cause
to be done all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, including but not limited to the
transfer and endorsement or assignment of the related Mortgage Loans and related
documents, at such Servicer's sole expense. Each Servicer shall cooperate with
the Trustee and such successor in effecting the termination of such Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by such Servicer to a Collection Account or Escrow
Account or thereafter received with respect to the related Mortgage Loans. The
Trustee shall thereupon make any Advance. The Trustee is hereby authorized and
empowered to execute and deliver, on behalf of such 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 related Mortgage Loans and related documents,
or otherwise.

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     SECTION 7.02 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.

     On and after the time a Servicer receives a notice of termination pursuant
to Section 7.01 of this Agreement, the Trustee shall, subject to and to the
extent provided herein, be the successor to such Servicer, but only in its
capacity as servicer under this Agreement, and not in any other, and the
transactions set forth herein and shall be subject to all the responsibilities,
duties and liabilities relating thereto placed on such 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 funds relating to the related Mortgage Loans that such Servicer
would have been entitled to charge to a Collection Account, provided that the
terminated Servicer shall nonetheless be entitled to payment or reimbursement as
provided in Section 3.08(a) to the extent that such payment or reimbursement
relates to the period prior to termination of such Servicer. Notwithstanding the
foregoing, if the Trustee has become the successor to a Servicer in accordance
with Section 7.01, 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
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 appointment of which does not adversely affect the
then current rating of the Certificates by each Rating Agency, as the successor
to such Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of such Servicer hereunder. Any
successor to the Servicer shall be an institution which is a FNMA and FHLMC
approved seller/servicer in good standing, which has a net worth of at least
$10,000,000, which is willing to service the related Mortgage Loans and which
executes and delivers to the Depositor and the Trustee an agreement accepting
such delegation and assignment, containing an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of such
Servicer (other than liabilities of the Servicer under Section 6.03 hereof
incurred prior to termination of the Servicer under Section 7.01 hereunder),
with like effect as if originally named as a party to this Agreement; provided
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. Pending appointment of
a successor to such Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to the limitations described
herein, 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 the related Mortgage Loans as
it and such successor shall agree; provided, however, that no such compensation
shall be in excess of the applicable Servicing Fee. 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 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 such
Servicer to deliver or provide, or any delay in delivering or providing, any
cash, information, documents or records to it.

     Any successor to a 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 Servicer is required to
maintain pursuant to this Agreement.

     SECTION 7.03 NOTIFICATION TO CERTIFICATEHOLDERS.

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     (a) Upon any termination of or appointment of a successor to a 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 actually known to the Trustee, unless such Event of
Default shall have been cured or waived.

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

     SECTION 8.01 DUTIES OF THE TRUSTEE.

     The Trustee, prior to the occurrence of an Event of Default and after the
curing or waiver 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 and not waived, 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 that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they are in the form
required by this Agreement; provided, however, that the Trustee shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument.

     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 willful misconduct; provided, however, that:

          (i) unless an Event of Default actually known to the Trustee shall
     have occurred and be continuing, 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 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 which it 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 for an error of judgment made in
     good faith by a Responsible Officer or Responsible Officers of the Trustee,
     unless it shall be finally proven that the Trustee was negligent in
     ascertaining the pertinent facts;

          (iii) the Trustee shall not be liable with respect to any action
     taken, suffered or omitted to be taken by it in good faith in accordance
     with the direction of the Holders of Certificates evidencing not less than
     25% of the Voting Rights of Certificates 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;

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          (iv) no provision of this Agreement shall require the Trustee to act
     as Servicer or be responsible in any way for the acts or omissions of any
     Servicer until such time as it acts as successor servicer pursuant to the
     terms of this Agreement; and

          (v) the Trustee shall have no duty (A) (other than in its capacity as
     successor servicer) to see to any recording, filing or depositing of this
     Agreement or any agreement referred to herein or any financing statement or
     continuation statement evidencing a security interest, or to see to the
     maintenance of any such recording or filing or depositing of any thereof,
     (B) (other than in its capacity as successor servicer)to see to any
     insurance, (C) (other than with respect to Section 8.11 hereof) to see to
     the payment or discharge of any tax, assessment, or other governmental
     charge or any lien or encumbrance of any kind owing with respect to ,
     assessed or levied against, any part of the Trust Fund, (D) to confirm or
     verify the contents of any certificates of any Servicer delivered to the
     Trustee pursuant to this Agreement believed by the Trustee to be genuine
     and to have been signed or presented by the appropriate party.

     SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE.

     Except as otherwise provided in Section 8.01:

          (i) the Trustee may request and conclusively 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 and the
     Trustee shall have no responsibility to ascertain or confirm the
     genuineness of any signature of any such party or parties;

          (ii) the Trustee may consult with counsel, financial advisers or
     accountants and the advice of any such counsel, financial advisers or
     accountants 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 advice or
     Opinion of Counsel;

          (iii) the Trustee shall not be liable for any action taken, suffered
     or omitted by it in good faith and believed by it to be authorized or
     within the discretion or rights or powers conferred upon it by this
     Agreement;

          (iv) 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 Certificates evidencing not less than 25% of the Voting Rights
     allocated to each Class of Certificates;

          (v) the Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents,
     affiliates, accountants or attorneys

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     and the Trustee shall not be responsible for any negligence or willful
     misconduct on the part of such agents, affiliates, accountants or attorneys
     appointed by it with due care;

          (vi) the Trustee shall not be required to risk or expend its own funds
     or otherwise incur any financial liability in the performance of any of its
     duties or in the exercise of any of its rights or powers hereunder if it
     shall have reasonable grounds for believing that repayment of such funds or
     adequate indemnity against such risk or liability is not assured to it;

          (vii) the Trustee shall not be liable for any loss on any investment
     of funds pursuant to this Agreement (other than as issuer of the investment
     security);

          (viii) the Trustee shall not be deemed to have actual knowledge of an
     Event of Default until a Responsible Officer of the Trustee shall have
     received written notice thereof;

          (ix) the Trustee shall be under no obligation to exercise any of the
     trusts, rights or powers vested in it by this Agreement or to institute,
     conduct or defend any litigation hereunder or in relation hereto at the
     request, order or direction of any of the Certificateholders, pursuant to
     the provisions of this Agreement, unless such Certificateholders shall have
     offered to the Trustee reasonable security or indemnity satisfactory to the
     Trustee against the costs, expenses and liabilities which may be incurred
     therein or thereby;

          (x) the rights of the Trustee to perform any discretionary act
     enumerated in this Agreement shall not be construed as a duty, and the
     Trustee shall not be answerable for other than its negligence or willful
     misconduct in the performance of such act;

          (xi) anything to the contrary in this Agreement notwithstanding, in no
     event shall the Trustee be liable for special, indirect or consequential
     loss or damage of any kind whatsoever (including, but not limited to, lost
     profits) even if the Trustee has been advised of the likelihood of such
     loss or damage and regardless of the form of action; and

          (xii) the Trustee shall not be required to give any bond or surety in
     respect of the execution of the Trust Fund created hereby or the powers
     granted hereunder.

     SECTION 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR MORTGAGE LOANS.

     The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor, a Servicer or the Seller, 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 the
Certificates or of any Mortgage Loan or related document other than with respect
to the Trustee's execution and countersignature of the Certificates. The Trustee
shall not be accountable for the use or application by the Depositor or the
Servicer of any funds paid to the Depositor or a Servicer in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account by the
Depositor or a Servicer.

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     SECTION 8.04 TRUSTEE MAY OWN CERTIFICATES.

     The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates and may transact business with the Depositor, the
Seller, any Servicer and their affiliates, with the same rights as it would have
if it were not the Trustee.

     SECTION 8.05 TRUSTEE'S FEES AND EXPENSES.

     (a) The Trustee, as compensation for its activities hereunder, shall be
entitled to withdraw from the Certificate Account on each Distribution Date
prior to making distributions pursuant to Section 4.02 any investment income or
other benefit derived from balances in the Certificate Account for such
Distribution Date pursuant to Section 3.08(b). Subject to the limitations set
forth in Section 8.05(b), the Trustee and any director, officer, employee or
agent of the Trustee shall be indemnified by DLJMC and held harmless against any
loss, liability or expense (including reasonable attorney's fees and expenses)
incurred in connection with any claim or legal action relating to (a) this
Agreement or the Custodial Agreements, (b) the Certificates, or (c) the
performance of any of the Trustee's duties hereunder or under the Custodial
Agreements, 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 incurred by reason of any action of the Trustee
taken at the direction of the Certificateholders. Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the Trustee
hereunder. Without limiting the foregoing, DLJMC covenants and agrees, except as
otherwise agreed upon in writing by DLJMC and the Trustee and subject to the
limitation set forth in Section 8.05(b), and except for any such expense,
disbursement or advance as may arise from the Trustee's negligence, bad faith or
willful misconduct, to pay or reimburse the Trustee, for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Agreement with respect to: (A) the
reasonable compensation and the expenses and disbursements of its counsel not
associated with the closing of the issuance of the Certificates, (B) the
reasonable compensation, expenses and disbursements of any accountant, engineer
or appraiser that is not regularly employed by the Trustee, to the extent that
the Trustee must engage such persons to perform acts or services hereunder, (C)
printing and engraving expenses in connection with preparing any Definitive
Certificates and (D) any other reasonable expenses incurred other than in the
ordinary course of its business by the Trustee in connection with its duties
hereunder. Except as otherwise provided herein, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Tax Matters
Person or Paying Agent hereunder or for any other expenses.

     (b) Notwithstanding anything to the contrary in this Agreement, DLJMC shall
not be obligated to pay to the Trustee (other than with respect to any
compensation to which the Trustee is entitled pursuant to Section 3.08(b)) more
than, in the aggregate, $150,000 pursuant to Section 8.05(a) hereof.

     SECTION 8.06 ELIGIBILITY REQUIREMENTS FOR THE 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

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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 which would not cause either of the Rating
Agencies to reduce their respective then current Ratings of the Certificates (or
having provided such security from time to time as is sufficient to avoid such
reduction), as evidenced in writing by each Rating Agency. 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. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor, the
Seller or any Servicer and their affiliates; provided, however, that such entity
cannot be an affiliate of the Seller, the Depositor or any Servicer other than
the Trustee in its role as successor to any Servicer.

     SECTION 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE.

     The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice of resignation to the Depositor, the Seller,
each Servicer 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 acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If the Trustee gives
notice of such resignation, the Depositor shall promptly appoint a successor
trustee. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation or removal (as provided below), the resigning or removed
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
thereto by the Depositor, or if at any time 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 a tax is imposed with respect
to the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and the Seller and one
copy to the successor trustee.

     The Holders of Certificates entitled to at least 51% of the Voting Rights
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 shall be delivered
by the successor Trustee to the Depositor, each Servicer and the Seller, 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.

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     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.

     SECTION 8.08 SUCCESSOR TRUSTEE.

     Any successor trustee appointed as provided in Section 8.07 shall execute,
acknowledge and deliver to the Depositor and to its predecessor trustee, each
Servicer and the Seller 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 Depositor, each Servicer, the Seller 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
8.08 unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06 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 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 THE 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 the 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 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 Depositor 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
Depositor and the Trustee may consider necessary

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or desirable. If the Depositor 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. The
Depositor and the Trustee hereby appoint Chase Manhattan Trust Company, National
Association (the "Co-Trustee"), as co-trustee for the purpose of holding GEMICO
PMI Policy and the PMI Sub-Account for remitting payments of the GEMICO PMI Fee
to GEMICO.

     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) To the extent necessary to effectuate the purposes of this Section
     8.10, all rights, powers, duties and obligations conferred or imposed upon
     the Trustee, except for the obligation of the Trustee in its capacity as
     successor servicer under this Agreement to advance funds on behalf of each
     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 a 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 applicable 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;

          (ii) No trustee hereunder shall be held personally liable by reason of
     any act or omission of any other trustee hereunder and such appointment
     shall not, and shall not be deemed to, constitute any such separate trustee
     or co-trustee as agent of the Trustee;

          (iii) The Trustee may at any time accept the resignation of or remove
     any separate trustee or co-trustee; and

          (iv) The Depositor, and not the Trustee, shall be liable for the
     payment of reasonable compensation, reimbursement and indemnification to
     any such 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 separate trustees and co-trustees, when and 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

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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 each
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 assets with respect to which any REMIC election is
to be made, as set forth in the Preliminary Statement, shall constitute, and
that the conduct of matters relating to such assets shall be such as to qualify
such assets 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 both REMICs and that in such
capacity it shall: (a) prepare, sign and file, or cause to be prepared and
filed, in a timely manner, a U.S. Real Estate Mortgage Investment Conduit Income
Tax Return (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,
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;
(c) make or cause to be made elections that such assets be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law) and apply for an employee identification number from the
IRS via a form SS-4 or any other acceptable method for all tax entities; (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 Residual 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 matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status 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 hereunder; (h) pay, from the
sources

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specified in the last paragraph of this Section 8.11, the amount of any federal
or state tax, including prohibited transaction taxes as described below, imposed
on any REMIC hereunder prior to its termination 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) ensure that federal, state
or local income tax or information returns shall be signed by the Trustee or
such other person as may be required to sign such returns by the Code or state
or local laws, regulations or rules; (j) maintain records relating to the
REMICs, including but not limited to the income, expenses, assets and
liabilities thereof and the fair market value and adjusted basis of the assets
determined on the accrual method or 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 any such REMIC 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, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any such REMIC, and otherwise act on
behalf of the REMICs in relation to any tax matter or controversy involving it.

     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 ten
(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, reasonably request
in order to enable the Trustee to perform its duties as set forth herein. DLJMC
hereby indemnifies the Trustee for any losses, liabilities, damages, claims or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result 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 any
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of any REMIC as defined in Section 860G(c) of the Code, on
any contribution to the REMICs after the Startup Day pursuant to Section 860G(d)
of the Code, or any other tax is imposed, including, without limitation, any
minimum tax imposed upon the REMICs pursuant to Sections 23153 and 24874 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) the applicable Servicer or the Seller, in the case of any
such minimum tax, if such tax arises out of or results from a breach by such
Servicer or the Seller of any of their obligations under this Agreement or (iii)
the Seller, if any such tax arises out of or results from the Seller's
obligation to repurchase a related Mortgage Loan pursuant to Section 2.02 or
2.03 or (iv) in all other cases, or in the event that the Trustee, the
applicable Servicer or applicable Seller fails to honor its obligations under
the preceding clauses (i), (ii) or (iii), any such tax will be paid with amounts
otherwise to be distributed to the Certificateholders, as provided in Section
3.11(b).

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     The Trustee shall treat the Basis Risk Reserve Fund as an outside reserve
fund within the meaning of Treasury Regulation 1.860G-2(h) that is owned by the
Class X Certificateholder and that is not an asset of the REMIC. The Trustee
shall treat the rights of the Class A-2, Class M-1, Class M-2, and Class B
Certificateholders to receive payments from the Basis Risk Reserve Fund as
rights in an interest rate cap contract written by the Class X Certificateholder
in favor of the Class A-2, Class M-1, Class M-2, and Class B Certificateholders.
Thus, each Certificate other than the Class X and the Class R Certificates shall
be treated as representing ownership of not only REMIC Regular Interests, but
also ownership of an interest in an interest rate cap contract. For purposes of
determining the issue price of the REMIC Regular interests, the Trustee shall
assume that the interest rate cap contract has a value of $5,000.

     The Trustee, the Servicers and the Holders of Certificates shall take any
action or cause the REMIC to take any action necessary to create or maintain the
status of each REMIC as a REMIC under the REMIC Provisions and shall assist each
other as necessary to create or maintain such status. Neither the Trustee, the
Master Servicer nor the Holder of any Residual Certificate shall take any
action, cause any REMIC created hereunder 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 such REMIC as
a REMIC or (ii) result in the imposition of a tax upon such REMIC (including but
not limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
and the Master Servicer have received an Opinion of Counsel (at the expense of
the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.

     Each Holder of a Residual Certificate shall pay when due any and all taxes
imposed on each REMIC created hereunder by federal or state governmental
authorities. To the extent that such Trust taxes are not paid by a Residual
Certificateholder, the Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise distributable to the Holder of the Residual
Certificate in the REMICs or, if no such amounts are available, out of other
amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to Holders of regular interests in the related REMIC.

     The Trustee, as agent for the Tax Matters Person, shall, for federal income
tax purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis.

     On or before April 15 of each calendar year beginning in 2002, the
Servicers shall deliver to the Trustee and each Rating Agency an Officers'
Certificate stating each Servicer's compliance with the provisions of this
Section 9.01.

     The Trustee will apply for an Employee Identification Number from the
Internal Revenue Service via a Form SS-4 or other acceptable method for all tax
entities.

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     SECTION 8.12 PERIODIC FILINGS.

     The Trustee shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder. In
connection with the preparation and filing of such periodic reports, the
Depositor and each Servicer shall, upon the written request of the Trustee,
timely provide to the Trustee all material information reasonable available to
them which is requested by the Trustee for the purpose of being included in such
reports. 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.

     SECTION 8.13 TRUST OBLIGATIONS.

     For all purposes herein, any and all rights, duties and obligations of the
Trustee on behalf of the Trust shall be the rights, duties and obligations of
the Trust itself.

     SECTION 8.14 DETERMINATION OF CERTIFICATE INDEX.

     On each Interest Determination Date, Calmco shall determine the Certificate
Index for the Accrual Period and inform the Trustee and each Servicer of such
rate.

     SECTION 8.15 INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
                  REMIC STATUS.

     In the event that any REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by a Servicer of its duties and obligations set forth
herein, the Servicer shall indemnify the Trustee and the Trust Fund against any
and all losses, claims, damages, liabilities or expenses ("Losses") resulting
from such negligence; PROVIDED, HOWEVER, that the Servicer shall not be liable
for any such Losses attributable to the negligence of the Trustee, the Depositor
or the Holder of such Class R Certificate, as applicable, nor for any such
Losses resulting from misinformation provided by the Holder of such Class R
Certificate on which the Servicer has relied. The foregoing shall not be deemed
to limit or restrict the rights and remedies of the Holder of such Class R
Certificate now or hereafter existing at law or in equity. Notwithstanding the
foregoing, however, in no event shall the Servicer have any liability (1) for
any action or omission that is taken in accordance with and in compliance with
the express terms of, or which is expressly permitted by the terms of, this
Agreement, (2) for any Losses other than arising out of a negligent performance
by the Servicer of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).

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                                   ARTICLE IX

                                   TERMINATION

     SECTION 9.01 TERMINATION UPON LIQUIDATION OR PURCHASE OF THE MORTGAGE
                  LOANS.

     (a) Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Seller, the Servicers and the Trustee created hereunder with
respect to the Trust Fund shall terminate upon the earlier of (a) the purchase
by Calmco of all Mortgage Loans (and REO Properties) remaining at the price
equal to the sum of (i) 100% of the Stated Principal Balance of each Mortgage
Loan (other than in respect of REO Property) plus one month's accrued interest
thereon at the applicable Mortgage Rate and (ii) with respect to any REO
Property, the lesser of (x) the appraised value of any REO Property as
determined by the higher of two appraisals completed by two independent
appraisers selected by the Depositor at the expense of the Depositor and (y) the
Stated Principal Balance of each Mortgage Loan related to any REO Property, in
each case plus accrued and unpaid interest thereon at the applicable Mortgage
Rate and (iii) any unreimbursed Advances, Servicing Advances and Servicing Fees
payable to the other Servicer which shall be entitled to withdraw such amounts
from the applicable Collection Account pursuant to Section 3.08(a) 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 Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the 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 repurchase all Mortgage Loans and REO Properties pursuant to clause
(a) above shall be conditioned upon the aggregate Stated Principal Balance of
the Mortgage Loans, at the time of any such repurchase, aggregating less than
ten percent of the Aggregate Loan Balance as of the Cut-off Date.

     (b) If Calmco elects to terminate the Trust Fund pursuant to Section
9.01(a) above, the other Servicer shall retain all servicing rights with respect
to the Mortgage Loans serviced by it. Calmco and such Servicer shall enter into
a servicing agreement mutually acceptable to such parties, pursuant to which
such Servicer shall continue to service and administer such Mortgage Loans in
accordance with the customary and usual standards of practice of prudent
mortgage loan servicers which service such mortgage loans.

     SECTION 9.02 FINAL DISTRIBUTION ON THE CERTIFICATES.

     If on any Determination Date, the Trustee determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Accounts and Certificate Account, the Trustee
shall promptly send a final distribution notice to each Certificateholder. If
Calmco elects to terminate the Trust Fund pursuant to Section 9.01, at least 20
days prior to the date notice is to be mailed to the affected
Certificateholders, Calmco shall notify the Servicers and the Trustee of the
date it intends to terminate the Trust Fund and of the applicable repurchase
price of the Mortgage Loans and REO Properties.

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     Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the Trustee
by letter to Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution. Any such notice shall specify (a) the Distribution Date upon which
final distribution on the Certificates will be made upon presentation and
surrender of 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 the Certificates at the office therein
specified. The Trustee shall give such notice to each Rating Agency at the time
such notice is given to Certificateholders.

     Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case on
the final Distribution Date in proportion to their respective Percentage
Interests, with respect to Certificateholders of the same Class, an amount equal
to (i) as to each Class of Offered Certificates, (A) first to the Senior
Certificates, and then to the Class M-1, Class M-2 and Class B Certificates
sequentially, in that order, an amount equal to the Class Principal Balance
thereof plus Current Interest and any Carryforward Interest and (B) to the
extent of available funds (other than funds described in clause (ii) below)
after the distributions in clause (i)(A) above, the amounts referred to and in
the order described in Section 4.02(a)(iv)B-H, (ii) as to the Class P
Certificates, the aggregate amount, if any, of all Prepayment Premiums which
remains on deposit in the Collection Accounts and the Certificate Account and
(iii) as to the Class X Certificates, the amount, if any, which remain on
deposit in the Collection Accounts (other than the amounts retained to meet
claims) after application pursuant to clause (i) and clause (ii) above.

     In the event that any affected Certificateholders shall not surrender
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 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 reasonable and
appropriate steps, or may appoint an agent to take reasonable and 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 which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto and the Trustee shall
be discharged from all further liability with respect to the Certificates and
this Agreement.

     SECTION 9.03 ADDITIONAL TERMINATION REQUIREMENTS.

     (a) In the event Calmco exercises its purchase option with respect to the
Mortgage Loans as provided in Section 9.01, at such time as the Mortgage Loans
are so purchased, the Trust Fund shall be terminated in accordance with the
following additional requirements, unless the Trustee has been provided with an
Opinion of Counsel, at the expense of Calmco, to the effect that the failure to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on

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"prohibited transactions" on any REMIC as defined in Section 860F of the Code,
or (ii) cause any REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:

               (1) Within 90 days prior to the final Distribution Date set forth
          in the notice given by the Trustee under Section 9.02, the Depositor
          shall prepare and the Trustee shall adopt a plan of complete
          liquidation within the meaning of Section 860F(a)(4) of the Code
          which, as evidenced by an Opinion of Counsel (which opinion shall not
          be an expense of the Trustee, the Tax Matters Person or the Trust
          Fund), meets the requirements of a qualified liquidation;

               (2) Within 90 days after the time of adoption of such a plan of
          complete liquidation, the Trustee shall sell all of the assets of the
          Trust Fund to the Depositor for cash in accordance with Section 9.01;
          and

               (3) On the date specified for final payment of the Certificates,
          the Trustee shall, after payment of any unreimbursed Advances,
          Servicing Advances, Servicing Fees or other fee compensation payable
          to each Servicer pursuant to this Agreement, make final distributions
          of principal and interest on the Certificates in accordance with
          Section 4.02 and distribute or credit, or cause to be distributed or
          credited, to the Holders of the Residual Certificates all cash on hand
          after such final payment (other than the cash retained to meet
          claims), and the Trust Fund (and each REMIC) shall terminate at that
          time.

     (b) The Trustee as agent for each REMIC hereby agrees to adopt and sign
such a plan of complete liquidation upon the written request of the Depositor,
and the receipt of the Opinion of Counsel referred to in Section 9.03(a)(1) and
to take such other action in connection therewith as may be reasonably requested
by the Depositor.

     (c) By their acceptance of the Certificates, the Holders thereof hereby
authorize the Depositor to prepare and the Trustee to adopt and sign a plan of
complete liquidation.

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                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

     SECTION 10.01 AMENDMENT.

     This Agreement may be amended from time to time by the Depositor, each
Servicer, the Seller and the Trustee without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor, the Seller or any Servicer, (iv) to add any other provisions with
respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; and, provided, further, that any action pursuant to clauses (iv) or
(v) above shall not, as evidenced by an Opinion of Counsel (which Opinion of
Counsel shall not be an expense of the Trustee or the Trust Fund, but shall be
at the expense of the party proposing such amendment), adversely affect in any
material respect the interests of any Certificateholder; provided, however, that
no such Opinion of Counsel shall be required if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Certificates. The Trustee, the Depositor, the Seller and the
Servicers also may 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 helpful to (i)
maintain the qualification of any REMIC as a REMIC under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on any REMIC pursuant to the Code
that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code; provided,
that the Trustee has 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 or the Trust Fund, to the effect that such action is
necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
avoid or minimize the risk of the imposition of such a tax or (iii) comply with
any such requirements of the Code.

     This Agreement may also be amended from time to time by the Depositor, the
Servicers, the Seller and the Trustee with the consent of the Holders of each
Class of Certificates affected thereby evidencing 66% of the aggregate Class
Principal Balance 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,
however, that no such amendment 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, or (ii) 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 not be an expense of the
Trustee or the Trust Fund, but shall be at the expense of the party requesting
such amendment, to the effect that such amendment will not cause the imposition

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of any tax on any REMIC or the Certificateholders or cause any REMIC 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 or a copy of such amendment to each
Certificateholder and each Rating Agency.

     It shall not be necessary for the consent of Certificateholders under this
Section 10.01 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.

     Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), 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. The Trustee shall have no obligation to consent to any amendment
that it reasonably believes will materially and adversely affect its rights or
immunities under this Agreement.

     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 Depositor at its expense, but only upon direction by the
Trustee (acting at the direction of holders of Certificates evidencing a
majority of the aggregate Class Principal Balance) accompanied by an Opinion of
Counsel (at the Depositor's expense) 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 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 OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES

                                       112

<PAGE>

HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.

     SECTION 10.04 INTENTION OF PARTIES.

     It is the express intent of the parties hereto that the conveyance of the
Trust Fund, including the Mortgage Loans, by the Depositor to the Trustee be,
and be construed as, an absolute sale thereof. It is, further, not the intention
of the parties that such conveyance be deemed a pledge thereof. 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 either 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 and (ii) the conveyance
provided for in this Agreement shall be deemed to be an assignment and a grant
by the Depositor to the Trustee, for the benefit of the Certificateholders, of a
security interest in all of the assets transferred, 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
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.

     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:

     1. Any material change or amendment to this Agreement;

     2. The occurrence of any Event of Default that has not been cured;

     3. The resignation or termination of any Servicer or the Trustee and the
appointment of any successor;

     4. The repurchase or substitution of Mortgage Loans pursuant to Sections
2.02 and 2.03; and

     5. The final payment to Certificateholders.

     In addition, the Trustee shall promptly furnish to each Rating Agency
copies of the following:

     1. Each report to Certificateholders described in Section 4.05;

     2. Each annual statement as to compliance described in Section 3.16;

                                       113

<PAGE>

     3. Each annual independent public accountants' servicing report described
in Section 3.17; and

     4. Any notice of a purchase of a Mortgage Loan pursuant to Section 2.02,
2.03 or 3.11.

     All directions, demands and notices hereunder shall be in writing and shall
be deemed to have been duly given when delivered to (a) in the case of the
Depositor, 11 Madison Avenue, 4th Floor, New York, New York 10010, Attention:
Helaine F. Hebble (with a copy to Credit Suisse First Boston Mortgage Securities
Corp., 11 Madison Avenue, 4th Floor, New York, New York 10010, Attention: Office
of the General Counsel), (b) in the case of the Trustee, at the Corporate Trust
Office or such other address as the Trustee may hereafter furnish to the
Depositor and the Servicer, (c) in the case of Old Kent, Old Kent Mortgage
Company, Attn: Kim Urbanek Department 700, 15050 Avenue of Science, Suite 101,
San Diego, CA 92128-3418, (d) in the case of each of the Rating Agencies, the
address specified therefor in the definition corresponding to the name of such
Rating Agency and (e) in the case of Calmco, Calmco Servicing L.P., 9600 Great
Hills Trail, Suite 300-E, Austin, Texas, Attention: Jeff Neal. 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.

     SECTION 10.07 ASSIGNMENT.

         Notwithstanding anything to the contrary contained herein, except as
provided in Sections 6.02 and 6.04, this Agreement may not be assigned by any
Servicer without the prior written consent of the Trustee and 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 created hereby, 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 created hereby, 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;

                                       114

<PAGE>

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 herein provided, and unless 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.

     SECTION 10.09 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.

     SECTION 10.10 PROTECTION OF ASSETS.

     (a) Except for transactions and activities entered into in connection with
the securitization that is the subject of this agreement, the trust created by
this agreement is not authorized and has no power to:

          (i)   borrow money or issue debt;

          (ii)  merge with another entity, reorganize, liquidate or sell assets;
                or

          (iii) engage in any business or activities.

     (b) Each party to this agreement agrees that it will not file an
involuntary bankruptcy petition against the Trust Fund or initiate any other
form of insolvency proceeding until after the Certificates have been paid.

                                       115

<PAGE>

     IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the
Servicers have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.

                                    CREDIT SUISSE FIRST BOSTON MORTGAGE
                                    SECURITIES CORP.
                                          as Depositor

                                    By:________________________________________
                                          Name:
                                          Title:

                                    THE CHASE MANHATTAN BANK
                                          as Trustee

                                    By:________________________________________
                                          Name:
                                          Title:

                                    DLJ MORTGAGE CAPITAL, INC.
                                          as the Seller

                                    By:________________________________________
                                          Name:
                                          Title:

                                    CALMCO SERVICING L.P.
                                          as the Special Servicer and a Servicer

                                    By:________________________________________
                                          Name:
                                          Title:

                                    OLD KENT MORTGAGE COMPANY
                                          as a Servicer

                                    By:________________________________________
                                          Name:
                                          Title:

Acknowledged and Agreed
CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION
         as Co-Trustee

By:_________________________________
Name:
Title:

                                       116

<PAGE>

                                    EXHIBIT A

                          [FORM OF SENIOR CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

                                       A-1

<PAGE>

Certificate No.                     :       [__]

Cut-off Date                        :       February 1, 2001

First Distribution Date             :       March 26, 2001

Initial Certificate Balance
of this Certificate
("Denomination")                     :      $[__________]

Initial Certificate Balances
of all Certificates
of this Class                       :        $[__________]

CUSIP                               :        [___________]

Interest Rate                       :        [___]%

Maturity Date                       :        [___________]

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class with respect to a Trust Fund
         consisting primarily of a pool of conventional mortgage loans (the
         "Mortgage Loans") secured by fixed and adjustable rate, first lien
         residential mortgage loans.

       Credit Suisse First Boston Mortgage Securities Corp., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the
Servicers or the Trustee referred to below or any of their respective
affiliates. This Certificate and the Mortgage Loans are not guaranteed or
insured by any governmental agency or instrumentality.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly

                                       A-2

<PAGE>

distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Calmco Servicing
L.P. as servicer and special servicer ("Calmco"), Old Kent Mortgage Company
("Old Kent" and, together with Calmco, the "Servicers") and The Chase Manhattan
Bank as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to such terms 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.

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

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                       A-3

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  March 8, 2001.

                                         THE CHASE MANHATTAN BANK,
                                         as Trustee

                                         -------------------------
                                         By

Countersigned:

By
   -------------------------
   Authorized Signatory of
   The Chase Manhattan Bank,
   as Trustee

                                       A-4

<PAGE>

                                    EXHIBIT B

                        [FORM OF SUBORDINATE CERTIFICATE]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE [BUT NOT IF THE DEPOSITOR DELIVERS TO THE
TRUSTEE AN OFFICER'S CERTIFICATE TO THE EFFECT THAT SUCH RESTRICTIONS NO LONGER
APPLY] EITHER A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE,
OR, IF THE PURCHASER IS AN INSURANCE COMPANY, A REPRESENTATION IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN OR AN OPINION OF COUNSEL
IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR
TO THE CODE WITHOUT THE OFFICER'S CERTIFICATE OR THE OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.

[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED ("THE ACT").  ANY RESALE OR TRANSFER OF THIS CERTIFICATE
WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A
TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT

                                       B-1

<PAGE>

AND IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN.]

Certificate No.                     :       [__]

Cut-off Date                        :       February 1, 2001

First Distribution Date             :       March 26, 2001

Initial Certificate Balance
of this Certificate
("Denomination")                     :      $[________]

Initial Certificate Balances
of all Certificates
of this Class                       :       $[_________]

CUSIP                               :       [_______]

Interest Rate                       :       [___]%

Maturity Date                       :       [______________]

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class with respect to a Trust Fund
         consisting primarily of a pool of conventional mortgage loans (the
         "Mortgage Loans") secured by fixed and adjustable rate, first lien
         residential mortgage loans.

       Credit Suisse First Boston Mortgage Securities Corp., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the Servicer
or the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.

                                       B-2

<PAGE>

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Calmco Servicing
L.P. as servicer and special servicer ("Calmco"), Old Kent Mortgage Company
("Old Kent" and, together with Calmco, the "Servicers") and The Chase Manhattan
Bank as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to such terms 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.

         [No transfer of a Certificate of this Class 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 said Act and such laws. In the event that a
transfer is to be made in reliance upon an exemption from the Securities Act and
such laws, in order to assure compliance with the Securities Act and such 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 the event that such a transfer is
to be made within three years from the date of the initial issuance of
Certificates pursuant hereto, there shall also be delivered (except in the case
of a transfer pursuant to Rule 144A of the Securities Act) to the Trustee an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Securities Act and such state securities laws, which Opinion of Counsel
shall not be obtained at the expense of the Trustee, the Seller, the Servicer or
the Depositor. The Holder hereof desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee and the Depositor 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.]

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

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                       B-3

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  March 8, 2001.

                                              THE CHASE MANHATTAN BANK,
                                              as Trustee

                                              ------------------------
                                              By

Countersigned:

By
   -------------------------
   Authorized Signatory of
   The Chase Manhattan Bank,
   as Trustee

                                       B-4

<PAGE>

                                    EXHIBIT C

                         [FORM OF RESIDUAL CERTIFICATE]

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE, OR, IF THE PURCHASER IS AN INSURANCE COMPANY, A
REPRESENTATION IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN OR AN OPINION OF COUNSEL IN ACCORDANCE WITH THE PROVISIONS OF THE
AGREEMENT REFERRED TO HEREIN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY
HEREIN, ANY PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR TO THE CODE WITHOUT THE OPINION OF
COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO
EFFECT.

                                       C-1

<PAGE>

Certificate No.                     :       [__]

Cut-off Date                        :       February 1, 2001

First Distribution dated
the date hereof                     :       March 26, 2001

Initial Certificate Balance
of this Certificate
("Denomination")                    :        $[_____________]

Initial Certificate Balances
of all Certificates of
this Class                          :        $[_____________]

CUSIP                               :        [__________]

Interest Rate                       :        [____]%

Maturity Date                       :        [___________]

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

         evidencing the distributions allocable to the Class R Certificates with
         respect to a Trust Fund consisting primarily of a pool of conventional
         mortgage loans (the "Mortgage Loans") secured by fixed and adjustable
         rate, first lien residential mortgage loans.

       Credit Suisse First Boston Mortgage Securities Corp., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the Servicer
or the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.

         This certifies that [__________________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in

                                       C-2

<PAGE>

certain monthly distributions with respect to a Trust Fund consisting primarily
of the Mortgage Loans deposited by Credit Suisse First Boston Mortgage
Securities Corp. (the "Depositor"). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as of the Cut-off Date specified above
(the "Agreement") among the Depositor, DLJ Mortgage Capital, Inc. as seller
("DLJMC"), Calmco Servicing L.P. as servicer and special servicer ("Calmco"),
Old Kent Mortgage Company ("Old Kent" and, together with Calmco, the
"Servicers") and The Chase Manhattan Bank as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to such terms 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.

         Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R
Certificate at the Corporate Trust Office or the office or agency maintained by
the Trustee in New York, New York.

         No transfer of a Class R Certificate shall be made unless the Trustee
shall have received either (i) a representation letter from the transferee of
such Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA or Section 4975 of the Code, or 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, which representation letter shall not be
an expense of the Trustee or the Trust Fund, (ii) if the purchaser is an
insurance company, a representation that 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 that the purchase and
holding of such Certificates are covered under PTCE 95-60 or (iii) in the case
of any such Class R Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or 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 to the effect that the purchase or holding of such Class R
Certificate will not result in the assets of the Trust Fund being deemed to be
"plan assets" and subject to the prohibited transaction provisions of ERISA and
the Code and will not subject the Trustee to any obligation in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee or the Trust Fund. Notwithstanding anything else to the contrary
herein, any purported transfer of a Class R Certificate to or on behalf of an
employee benefit plan subject to ERISA or to the Code without the Opinion of
Counsel satisfactory to the Trustee as described above shall be void and of no
effect.

         Each Holder of this Class R Certificate will be deemed to have agreed
to be bound by the restrictions of the Agreement, including but not limited to
the restrictions that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be transferred without
delivery to the Trustee of (a) a transfer affidavit of the proposed transferee
and (b) a transfer certificate of the transferor,

                                       C-3

<PAGE>

each of such documents to be in the form described in the Agreement, (iii) each
person holding or acquiring any Ownership Interest in this Class R Certificate
must agree to require a transfer affidavit and to deliver a transfer certificate
to the Trustee as required pursuant to the Agreement, (iv) each person holding
or acquiring an Ownership Interest in this Class R Certificate must agree not to
transfer an Ownership Interest in this Class R Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Class R
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.

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

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                       C-4

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  March 8, 2001.

                                              THE CHASE MANHATTAN BANK,
                                              as Trustee

                                              ------------------------
                                              By

Countersigned:

By
   -------------------------
   Authorized Signatory of
   The Chase Manhattan Bank,
   as Trustee

                                       C-5

<PAGE>

                                    EXHIBIT D

                      [FORM OF NOTIONAL AMOUNT CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS NOT ENTITLED TO ANY
DISTRIBUTIONS IN RESPECT OF PRINCIPAL.

                                       D-1

<PAGE>

Certificate No.                     :       [__]

Cut-off Date                        :       February 1, 2001

First Distribution Date             :       March 26, 2001

Initial Notional Amount
of this Certificate
("Denomination")                     :      $[___________]

Initial Notional Amounts
of all Certificates
of this Class                        :       $[___________]

CUSIP                                :       [____________]

Interest Rate                        :       [___]%

Maturity Date                        :       [____________]

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class with respect to a Trust Fund
         consisting primarily of a pool of conventional mortgage loans (the
         "Mortgage Loans") secured by fixed and adjustable rate, first lien
         residential mortgage loans.

       Credit Suisse First Boston Mortgage Securities Corp., as Depositor

         This Certificate is payable solely from the assets of the Trust and
does not evidence an obligation of, or an interest in, and is not guaranteed by
the Depositor, the Seller, the Servicer or the Trustee referred to below or any
of their respective affiliates. This Certificate and the Mortgage Loans are not
guaranteed or insured by any governmental agency or instrumentality.

         This certifies that Cede & Co., is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created

                                      D-2

<PAGE>

pursuant to a Pooling and Servicing Agreement dated as of the Cut-off Date
specified above (the "Agreement") among the Depositor, DLJ Mortgage Capital,
Inc. as seller ("DLJMC"), Calmco Servicing L.P. as servicer and special servicer
("Calmco"), Old Kent Mortgage Company ("Old Kent" and, together with Calmco, the
"Servicers") and The Chase Manhattan Bank as trustee (the "Trustee"). To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned to such terms 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.

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

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                       D-3

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  March 8, 2001

                                              THE CHASE MANHATTAN BANK,
                                              as Trustee

                                              ------------------------
                                              By

Countersigned:

By
   -------------------------
   Authorized Signatory of
   The Chase Manhattan Bank,
   as Trustee

                                       D-4

<PAGE>

                                    EXHIBIT E

                      [FORM OF PRINCIPAL ONLY CERTIFICATE]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").

                                       E-1

<PAGE>

Certificate No.                       :       [___]

Cut-off Date                          :        February 1, 2001

First Distribution Date               :       March 26, 2001

Initial Certificate Balance
of this Certificate
("Denomination")                      :        $[___________]

Initial Certificate Balances
of all Certificates
of this Class                          :        $[___________]

CUSIP                                  :       [__________]

Interest Rate                          :        [_____]%

Maturity Date                          :        [_________]

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class with respect to a Trust Fund
         consisting primarily of a pool of conventional mortgage loans (the
         "Mortgage Loans") secured by fixed and adjustable rate, first lien
         residential mortgage loans.

       Credit Suisse First Boston Mortgage Securities Corp., as Depositor

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate is payable
solely from the assets of the Trust and does not evidence an obligation of, or
an interest in, and is not guaranteed by the Depositor, the Seller, the Servicer
or the Trustee referred to below or any of their respective affiliates. This
Certificate and the Mortgage Loans are not guaranteed or insured by any
governmental agency or instrumentality.

         This certifies that Cede & Co., is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly

                                       E-2

<PAGE>

distributions with respect to a Trust Fund consisting primarily of the Mortgage
Loans deposited by Credit Suisse First Boston Mortgage Securities Corp. (the
"Depositor"). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
the Depositor, DLJ Mortgage Capital, Inc. as seller ("DLJMC"), Calmco Servicing
L.P. as servicer and special servicer ("Calmco"), Old Kent Mortgage Company
("Old Kent" and, together with Calmco, the "Servicers") and The Chase Manhattan
Bank as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to such terms 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.

                                       E-3

<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:  March 8, 2001

                                              THE CHASE MANHATTAN BANK,
                                              as Trustee

                                              ------------------------
                                              By

Countersigned:

By
   -------------------------
   Authorized Signatory of
   The Chase Manhattan Bank,
   as Trustee

                                       E-4

<PAGE>

                                   EXHIBIT F

                        FORM OF REVERSE OF CERTIFICATES

                                       F-1

<PAGE>

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

         This Certificate is one of a duly authorized issue of Certificates
designated as Credit Suisse First Boston Mortgage Securities Corp., Mortgage
Pass-Through Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial ownership
interest in the Trust Fund created by the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution 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 (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
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
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.

         Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the Corporate Trust Office or such other
location specified in the notice to Certificateholders of such final
distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the

                                       F-2

<PAGE>

Trustee with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. 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 therefor 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 of the Trustee upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office or the office or agency maintained by the
Trustee in New York, New York, accompanied by a 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 and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations 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
and 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, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer, the Seller and the Trustee and any agent
of the Depositor or the Trustee may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Servicer, the Seller, the Depositor, the Trustee, or any such agent shall be
affected by any notice to the contrary.

         On any Distribution Date on which the sum of the aggregate Stated
Principal Balance of the Mortgage Loans and the appraised value of the REO
Properties at the time of repurchase is less than 5% of the sum of the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, the Depositor will have
the option to repurchase, in whole, from the Trust Fund all remaining Mortgage
Loans and REO Properties at a purchase price determined as provided in the
Agreement. In the event that no such optional termination occurs, the
obligations and responsibilities created by the Agreement will terminate upon
the later of the maturity or other liquidation (or any advance with respect
thereto) of the last Mortgage Loan remaining in the Trust Fund and the
distribution to Certificateholders of all amounts required to be distributed
pursuant to the Agreement. In no event, however, will the trust created by the
Agreement continue beyond the expiration of 21 years from the death of the last

                                       F-3

<PAGE>

survivor of the descendants living at the date of the Agreement of a certain
person named in the Agreement.

         Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

                                       F-4

<PAGE>

                                   ASSIGNMENT

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto

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

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.

I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

--------------------------------------------------------------------------------
Dated:

                                          -------------------------------------
                                          Signature by or on behalf of assignor

                            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--------------------------------------
-------------------------------------------------------------------------------.

                                       F-5

<PAGE>

This information is provided by _________________________, the assignee named
above, or _______________________, as its agent.

                                       G-6

<PAGE>

                                    EXHIBIT G

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                     [date]

[Depositor]

[Servicer/s]

[Seller]
-------------------------

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

          Re:  Pooling and Servicing Agreement among the Depositor, DLJ Mortgage
               Capital, Inc. as seller ("DLJMC"), Calmco Servicing L.P. as
               servicer and special servicer ("Calmco"), Old Kent Mortgage
               Company ("Old Kent" and, together with Calmco, the "Servicers")
               and The Chase Manhattan Bank (the "Trustee"),CSFB Mortgage
               Pass-Through Certificates, Series 2001-HE8
               -----------------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that, as to each Mortgage Loan listed in each Mortgage
Loan Schedule (other than any Mortgage Loan listed in the attached schedule), it
has received:

         (i)  the original Mortgage Note, endorsed as provided in the following
form: "Pay to the order of ________, without recourse"; and

         (ii) a duly executed Assignment of the Mortgage (which may be included
in a blanket assignment or assignments).

         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 has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
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

                                       G-1

<PAGE>

identified on either 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 Pooling and Servicing Agreement.

                                     [THE CHASE MANHATTAN BANK]
                                     as Trustee

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

                                       G-2

<PAGE>

                                    EXHIBIT H

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [date]

[Depositor]

[Servicer/s]

[Seller]

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

               Re:  Pooling and Servicing Agreement among the Depositor, DLJ
                    Mortgage Capital, Inc. as seller ("DLJMC"), Calmco Servicing
                    L.P. as servicer and special servicer ("Calmco"), Old Kent
                    Mortgage Company ("Old Kent" and, together with Calmco, the
                    "Servicers") and The Chase Manhattan Bank (the
                    "Trustee"),CSFB Mortgage Pass-Through Certificates, Series
                    2001-HE8
                    ------------------------------------------------------------

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in each Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:

         (i) the original Mortgage Note, endorsed in the form provided in
Section 2.01(b) of the Pooling and Servicing Agreement, with all intervening
endorsements, and including any riders to the Mortgage Note, showing a complete
chain of endorsement from the originator to the last named endorsee;

         (ii) with respect to any Lost Mortgage Note, a lost note affidavit
stating that the original Mortgage Note was lost or destroyed, together with a
copy of such Mortgage Note;

         (iii)    the original of any guarantee executed in connection with the
Mortgage Note (if any);

         (iv) the original Mortgage with evidence of recording thereon, or
copies certified by the related recording office or if the original Mortgage has
not yet been returned from the recording office, a copy certified by or on
behalf of the related Seller indicating that such Mortgage has been delivered
for recording;

                                       H-1

<PAGE>

         (v) the originals of all assumption, modification, consolidation or
extension agreements (or, if an original of any of these documents has not been
returned from the recording office, a copy thereof certified by or on behalf of
the applicable Seller, the original to be delivered to such Seller forthwith
after return from such recording office), with evidence of recording thereon, if
any;

         (vi) a duly executed assignment of the Mortgage in the form provided in
Section 2.01(b) of the Pooling and Servicing Agreement; provided, however, that
if the Depositor has certified or the Trustee otherwise knows that the related
Mortgage has not been returned from the applicable recording office, a copy of
the Assignment of the Mortgage (excluding information to be provided by the
recording office);

         (vii) the original of any intervening recorded Assignments of Mortgage,
showing a complete chain of assignment from origination to the related Seller,
including warehousing assignments, with evidence of recording thereon (or, if an
original intervening Assignment of Mortgage has not been returned from the
recording office, a copy thereof certified by or on behalf of the applicable
Seller);

         (viii) the original or duplicate original lender's title insurance
policy 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 (or, in appropriate jurisdictions,
attorney's opinion of title and abstract of title); and

         (ix) the original primary mortgage insurance certificate, if any or
copy of mortgage insurance certificate.

         Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (i), (ii), (iii),
(iv), (vi), (ix) and (x) of the definition of the "Mortgage Loan Schedule" in
Article I 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
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 either Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Trustee has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.

                                       H-2

<PAGE>

          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                     [THE CHASE MANHATTAN BANK]
                                     as Custodian

                                     By:
                                     Name:
                                     Title:

                                       H-3

<PAGE>

                                    EXHIBIT I

                               TRANSFER AFFIDAVIT

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

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 R Certificate (the "Certificate") issued pursuant
to the Pooling and Servicing Agreement dated as of the Cut-off Date specified
above (the "Agreement") among the Depositor, DLJ Mortgage Capital, Inc. as
seller ("DLJMC"), Calmco Servicing L.P. as servicer and special servicer
("Calmco"), Old Kent Mortgage Company ("Old Kent" and, together with Calmco, the
"Servicers") and The Chase Manhattan Bank as trustee (the "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. 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 either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.

         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

                                       I-1

<PAGE>

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 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 J 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 Certificate.

         8.       The Transferee's taxpayer identification number is [________].

         9.       The Transferee is a United States Person.

         10. The Transferee is aware that the Certificate may be a "noneconomic
residual interest" 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.

         11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, and the Transferee
is not acting on behalf of such a plan.

                                       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 day of , 20 .

                                        ------------------------
                                        Print 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      day of               , 20    .
                                             ----        --------------    ----

                                        ------------------------
                                        NOTARY PUBLIC

                                        My Commission expires the      day of
                                                                  ----
                                                                , 20    .
                                        ------------------------    ----

                                       I-4

<PAGE>

                                    EXHIBIT 1
                                       to
                                    EXHIBIT I

Certain Definitions
-------------------

         "Ownership Interest": As to any Residual 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)
which 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 Residual Certificate, (iv) rural electric and telephone cooperatives
described in section 1381(a)(2)(C) of the Code, (v) a Person that is not 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, or an estate whose income from sources
without the United States is includible in gross income for 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 the authority to control all substantial
decisions of the trust unless such Person has furnished the transferor and the
Trustee with a duly completed Internal Revenue Service Form 4224, and (vi) any
other Person so designated by the Depositor based upon an Opinion of Counsel
that the Transfer of an Ownership Interest in a Residual Certificate to such
Person may cause the Trust Fund hereunder to fail to qualify as a REMIC at any
time that the 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, joint venture,
association, limited liability company, 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 Residual Certificate.

                                      I-1-1

<PAGE>

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

                                    EXHIBIT 2
                                       to
                                    EXHIBIT I

                        Section 5.02(c) of the Agreement

         [TO BE INSERTED WHEN POOLING AND SERVICING AGREEMENT FINALIZED]

                                      I-2-1

<PAGE>

                                    EXHIBIT J

                         FORM OF TRANSFEROR CERTIFICATE

__________, 200__

Credit Suisse First Boston Mortgage Securities Corp.
11 Madison Avenue, 4th Floor
New York, New York 10010
Attention:  Helaine Hebble

The Chase Manhattan Bank
250 West 33rd Street, 14th Floor
New York, New York 10001

               Re:  Credit Suisse First Boston Mortgage Securities Corp., CSFB
                    Mortgage Pass-Through Certificates, Series 2001-HE8, Class
                    [---]
                    ----------------------------------------------------------

Ladies and Gentlemen:

                  In connection with our disposition of the above 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 and
(c) to the extent we are disposing of a Class R Certificate, we have no
knowledge the Transferee is not a Permitted Transferee.

                                         Very truly yours,

                                         ---------------------------
                                         Print Name of Transferor

                                         By:
                                         ---------------------------
                                                Authorized Officer

                                       J-1

<PAGE>

                                    EXHIBIT K

                    FORM OF INVESTMENT LETTER (NON-RULE 144A)

__________, 200__

Credit Suisse First Boston Mortgage Securities Corp.
11 Madison Avenue, 4th Floor
New York, New York 10010
Attention:  Helaine Hebble

The Chase Manhattan Bank
250 West 33rd  Street, 14th Floor
New York, New York 10001

               Re:  Credit Suisse First Boston Mortgage Securities Corp., CSFB
                    Mortgage Pass-Through Certificates, Series 2001-HE8, Class
                    [---]

Ladies and Gentlemen:

                  In connection with our acquisition of the above 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) if we are an insurance company, a
representation that we are 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 that the purchase and holding of such Certificates are
covered under PTCE 95-60, (e) if an insurance company, we are purchasing the
Certificates with funds contained in an "insurance company general account" (as
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and our purchase and holding of the Certificates are covered under PTCE
95-60, (f) we are acquiring the Certificates for

                                       K-1

<PAGE>

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 (h) below), (g)
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, or taken any other action which would result in a
violation of Section 5 of the Act, and (h) 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.

                                         Very truly yours,

                                         ----------------------------
                                         Print Name of Transferee

                                         By:
                                              Authorized Officer

                                       K-2

<PAGE>

                                    EXHIBIT L

                            FORM OF RULE 144A LETTER

____________, 200__

Credit Suisse First Boston Mortgage Securities Corp.
11 Madison Avenue, 4th Floor
New York, New York  10010
Attention:  Helaine Hebble

The Chase Manhattan Bank
250 West 33rd  Street, 14th Floor
New York, New York  10001

               Re:  Credit Suisse First Boston Mortgage Securities Corp., CSFB
                    Mortgage Pass-Through Certificates, Series 2001-HE8, Class
                    [---]
                    ----------------------------------------------------------

Ladies and Gentlemen:

                  In connection with our acquisition of the above 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) 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 using the assets of any such plan or arrangement to effect such acquisition,
(e) if an insurance company, we are purchasing the Certificates with funds
contained in an "insurance company general account" (as defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and our purchase
and holding of the Certificates are covered under PTCE 95-60, (f) 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

                                       L-1

<PAGE>

general solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the Certificates
under the Act or that would render the disposition of the Certificates a
violation of Section 5 of the 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, (g) we are a "qualified institutional buyer"
as that term is defined in Rule 144A under the Act ("Rule 144A") and have
completed either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2, (h) we are aware that the sale to us is being made in
reliance on Rule 144A, and (i) 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 (A) 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 (B) pursuant to another exemption from registration under the Act.

                                            Very truly yours,

                                            ----------------------------
                                            Print Name of Transferee

                                            By:
                                            ----------------------------
                                                 Authorized Officer

                                       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 $ 1 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
--------
1        Buyer must own and/or invest on a discretionary basis at lease
         $100,000,000 in securities unless Buyer is a dealer, and, in that case,
         Buyer must own and/or invest on a discretionary basis at least
         $10,000,000 in securities.

                                      L-1-1

<PAGE>

of at least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.

___  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

                                      L-1-2

<PAGE>

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 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-1-3

<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-2-1

<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 understands 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-2-2

<PAGE>

                                    EXHIBIT M

                               REQUEST FOR RELEASE
                                  (for Trustee)

              CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP.

            CSFB Mortgage Pass-Through Certificates, Series 2001-HE8
                                 Class [_______]

Loan Information
----------------

         Name of Mortgagor:
                                           ------------------------------

         Servicer
         Loan No.:
                                           ------------------------------

Trustee
-------

         Name:

         Address:
                                           ------------------------------
                                           ------------------------------
                                           ------------------------------

         Trustee
         Mortgage File No.:

         The undersigned Servicer hereby acknowledges that it has received from
[Bank One, National Association] [U.S. Bank National Association], [The Chase
Manhattan Bank], [Bankers Trust Company of California, National Association] as
Custodian for the Holders of Mortgage Pass-Through Certificates, of the
above-referenced Series, 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 the
Cut-off Date specified above (the "Agreement") among the Depositor, DLJ Mortgage
Capital, Inc. as seller ("DLJMC"), Calmco Servicing L.P. as servicer and special
servicer ("Calmco"), Old Kent Mortgage Company ("Old Kent" and, together with
Calmco, the "Servicers") and The Chase Manhattan Bank as trustee (the
"Trustee").

( )    Mortgage Note dated , , in the original principal sum of $ , made
       ------------ ------- ---------- by . payable to, or endorsed to the order
       of, the Trustee. ------------------

                                       M-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 Servicer hereby acknowledges and agrees as follows:

                  (1) Such 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) Such 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 Servicer, if applicable,
                  assert or seek to assert any claims or rights of setoff to or
                  against the Documents or any proceeds thereof.

                  (3) Such Servicer shall return each and every Document
                  previously requested from the Mortgage File to the Custodian
                  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.

                                       M-2

<PAGE>

                  (4) The Documents and any proceeds thereof, including any
                  proceeds of proceeds, coming into the possession or control of
                  such Servicer shall at all times be earmarked for the account
                  of the Custodian, and such Servicer shall keep the Documents
                  and any proceeds separate and distinct from all other property
                  in such Servicer's possession, custody or control.

                                              [Servicer]

                                              By
                                                ------------------------------
                                              Its
                                                ------------------------------

Date:                  , 2001
      ----------------

                                       M-3

<PAGE>

                                    EXHIBIT N

          [Officer's Certificate with Respect to Principal Prepayments]

                                       N-1

<PAGE>

                                      O-1-1

<PAGE>

                                    EXHIBIT P

                            [Form of Servicer Report]

                                      P-1-1

<PAGE>

                                   SCHEDULE I

                             MORTGAGE LOAN SCHEDULE

                            (Available Upon Request)

                                       S-1

<PAGE>

                                   SCHEDULE IA

                             Mortgage Loan Schedule
     for Mortgage Loans with August 31, 2000 Representations and Warranties

                                       S-2

<PAGE>

                                   SCHEDULE IB

                             Mortgage Loan Schedule
       for Mortgage Loans with Closing Date Representations and Warranties

                                       S-3

<PAGE>

                                   SCHEDULE II

                     SELLER'S REPRESENTATIONS AND WARRANTIES

                                       S-4

<PAGE>

                                  SCHEDULE IIA

                     Representations and Warranties - DLJMC

                                       S-5

<PAGE>

                                  SCHEDULE IIB

                     Representations and Warranties - Calmco

                                       S-6

<PAGE>

                                  SCHEDULE IIC

                    Representations and Warranties - Old Kent

                                       S-7

<PAGE>

                                   ARTICLE III

                        REPRESENTATIONS AND WARRANTIES OF
       THE SELLER AND THE SERVICER; REPURCHASE; REVIEW OF MORTGAGE LOANS

                  SECTION 3.01      REPRESENTATIONS AND WARRANTIES OF THE SELLER
                                    AND THE SERVICER.

                  Old Kent Mortgage Company, in its capacity as Seller and
Servicer (for purposes of this Section 3.01 only, the "Company"), represents,
warrants and covenants to the Purchaser that as of each Closing Date or as of
such date specifically provided herein:

                  (a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all licenses necessary to carry out its business as now
being conducted, and is licensed and qualified to transact business in and is in
good standing under the laws of each state in which any Mortgaged Property is
located or is otherwise exempt under applicable law from such licensing or
qualification or is otherwise not required under applicable law to effect such
licensing or qualification and no demand for such licensing or qualification has
been made upon the Company by any such state, and in any event the Company is in
compliance with the laws of any such state to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage Loans in
accordance with the terms of this Agreement;

                  (b) The Company has the full power and authority and legal
right to hold, transfer and convey each Mortgage Loan, to sell each Mortgage
Loan and to execute, deliver and perform, and to enter into and consummate all
transactions contemplated by this Agreement and the related Purchase Price and
Terms Letter and to conduct its business as presently conducted; the Company has
duly authorized the execution, delivery and performance of this Agreement and
any agreements contemplated hereby, has duly executed and delivered this
Agreement and the related Purchase Price and Terms Letter, and any agreements
contemplated hereby, and this Agreement and the related Purchase Price and Terms
Letter and each Assignment of Mortgage to the Purchaser and any agreements
contemplated hereby, constitute the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization and similar laws, and by equitable principles
affecting the enforceability of the rights of creditors; and all requisite
corporate action has been taken by the Company to make this Agreement, the
related Purchase Price and Terms Letter and all agreements contemplated hereby
valid and binding upon the Company in accordance with their terms;

                  (c) Neither the execution and delivery of this Agreement, the
related Purchase Price and Terms Letter, the sale of the Mortgage Loans to the
Purchaser, the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement and
the related Purchase Price and Terms Letter will conflict with any of the terms,
conditions or provisions of the Company's charter or by-laws or materially
conflict with or result in a material breach of any of the terms, conditions or
provisions of any legal restriction or any agreement or instrument to which the
Company is now a party or by which it is bound, or constitute

<PAGE>

a default or result in an acceleration under any of the foregoing, or result in
the material violation of any law, rule, regulation, order, judgment or decree
to which the Company or its property is subject;

                  (d) There is no litigation, suit, proceeding or investigation
pending or threatened, or any order or decree outstanding, which is reasonably
likely to have a material adverse effect on the sale of the Mortgage Loans, the
execution, delivery, performance or enforceability of this Agreement or the
related Purchase Price and Terms Letter, or which is reasonably likely to have a
material adverse effect on the financial condition of the Company;

                  (e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with this Agreement
and the related Purchase Price and Terms Letter, except for consents, approvals,
authorizations and orders which have been obtained;

                  (f) The consummation of the transactions contemplated by this
Agreement and the related Purchase Price and Terms Letter are in the ordinary
course of business of the Company, and the transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Company pursuant to this
Agreement and the related Purchase Price and Terms Letter are not subject to
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;

                  (g) The origination and servicing practices with respect to
each Mortgage Note and Mortgage have been legal and in accordance with
applicable laws and regulations, and in all material respects proper and prudent
in the mortgage origination and servicing business. With respect to escrow
deposits and payments that the Company is entitled to collect, all such payments
are in the possession of, or under the control of, the Company, 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
and are being maintained in full compliance with applicable state and federal
law and the provisions of the related Mortgage Note and Mortgage. As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient to
pay for every escrowed item that remains unpaid and has been assessed but is not
yet due and payable. No escrow deposits or other charges or payments due under
the Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited;

                  (h) The Company has not used selection procedures that
identified the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in the Company's portfolio at the Cut-off Date;

                  (i) The Company will treat the sale of the Mortgage Loans to
the Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;

                  (j) The Company is an approved seller/servicer of residential
mortgage loans for Fannie Mae or Freddie Mac and HUD, with such facilities,
procedures and personnel necessary for

<PAGE>

the sound servicing of such mortgage loans. The Company is duly qualified,
licensed, registered and otherwise authorized under all applicable federal,
state and local laws, and regulations, meets the minimum capital requirements,
if applicable, set forth by the OCC, and is in good standing to sell mortgage
loans to and service mortgage loans for Fannie Mae or Freddie Mac and no event
has occurred which would make the Company unable to comply with eligibility
requirements or which would require notification to either Fannie Mae or Freddie
Mac;

                  (k) The Company does not believe, nor does it have any cause
or reason to believe, that it cannot perform each and every covenant contained
in this Agreement and the related Purchase Price and Terms Letter. The Company
is solvent and the sale of the Mortgage Loans will not cause the Company to
become insolvent. The sale of the Mortgage Loans is not undertaken with the
intent to hinder, delay or defraud any of the Company's creditors;

                  (l) No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Company pursuant to this Agreement,
the related Purchase Price and Terms Letter or in connection with the
transactions contemplated hereby, contains or will contain any statement that is
or will be inaccurate or misleading in any material respect. The Company has
prudently originated and underwritten each Mortgage Loan;

                  (m) The Company acknowledges and agrees that the Interim
Servicing Fee represents reasonable compensation for performing such services
and that the entire Interim Servicing Fee shall be treated by the Company, for
accounting and tax purposes, as compensation for the servicing and
administration of the Mortgage Loans pursuant to this Agreement;

                  (n) The Company has delivered to the Purchaser financial
statements as to its last two complete fiscal years. All such financial
statements fairly present the pertinent results of operations and changes in
financial position for each of such periods and the financial position at the
end of each such period of the Company and its subsidiaries and have been
prepared in accordance with GAAP consistently applied throughout the periods
involved, except as set forth in the notes thereto. There has been no change in
the business, operations, financial condition, properties or assets of the
Company since the date of the Company's financial statements that would have a
material adverse effect on its ability to perform its obligations under this
Agreement or the related Purchase Price and Terms Letter;

                  (o) The Company has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans; and

                  (p) The Company 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 servicing of the MERS Mortgage Loans for as long as such
Mortgage Loans are registered with MERS.

<PAGE>

                                  SCHEDULE IIIA

                 Representations and Warranties -Mortgage Loans

                                       I-1

<PAGE>

                          DIME/NORTH AMERICAN MORTGAGE
                          ----------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  Each Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

<PAGE>

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance with the
terms of the related Mortgage Note;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the applicable 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 issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the applicable policy, and which assumption
agreement is pan of the Mortgage Loan File delivered to the Purchaser and the
terms of which are reflected in the Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

<PAGE>

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. AU individual insurance policies contain a standard
mortgagee clause naming the related Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such 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 an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The related
Seller has not engaged in, and has no knowledge of the Mortgagor's or any
subservicer's having engaged in. any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either, including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Sellers;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Sellers shall maintain in their possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser on
the related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Sellers have not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor have the
Sellers waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single

<PAGE>

parcel of real property with a detached single family residence erected thereon,
or a two- to four-family dwelling, or an individual condominium unit in a
low-rise condominium project, or an individual unit in a planned unit
development, provided, however, that any condominium unit or planned unit
development shall conform with the applicable Fannie Mae requirements regarding
such dwellings and that no residence or dwelling is (i) a mobile home or (ii) a
manufactured dwelling unless such manufactured dwelling is (x) permanently
affixed to the Mortgaged Property, (y) considered real estate under applicable
local law and (z) conforms to all Fannie Mae requirements. No portion of the
Mortgaged Property is used for commercial purposes, provided, that 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;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                  (1) the lien of current real property taxes and assessments
         not yet due and payable;

                  (2) covenants, conditions and restrictions, rights of way,
         easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                  (3) other matters to which like properties are commonly
         subject which do not materially interfere with the benefits of the
         security intended to be provided by the Mortgage or the use, enjoyment,
         value or marketability of the related Mortgaged Property;

                  (4) with respect to each Second Lien Mortgage a prior mortgage
         lien on the Mortgaged Property; or

                  (5) if the Mortgaged Property is a condominium, any lien for
         common charges permitted by state law.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the related Seller has full
right to sell and assign the same to the Purchaser;

<PAGE>

                  (j) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. The documents, instruments and agreements submitted
for loan underwriting and all information supplied by, on behalf of, or
concerning the Mortgagor, were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading. No
fraud, error, negligence, misrepresentation or omission of fact with respect to
a Mortgage Loan has taken place on the part of the Sellers or the Mortgagor or
any other party involved in the origination or servicing of the Mortgage Loan.
The Sellers have reviewed all of the documents constituting the Servicing File
and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein. The Seller has prudently
originated and underwritten each Mortgage Loan;

                  (l) FULL DISBURSEMENT OF PROCEEDS. Except to the extent the
Mortgage Loan is subject to completion escrows which have been disclosed to and
acknowledged by the Purchaser and which meet the requirements of the Seller's
Underwriting Standards, and as to which a completed Fannie Mae form 442 has been
delivered to the Purchaser within sixty (60) days after the Closing Date, the
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been
fully disbursed and 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 the
Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is
not entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;

                  (m) OWNERSHIP. The related Seller is the sole owner of record
and holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged,
and the related Seller has good and marketable title thereto, and has full right
to transfer and sell the Mortgage Loan therein to the Purchaser free and clear
of any encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest, were)
(I) in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae

<PAGE>

or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie
Mac and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and assigns, as to the
first or second 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 Interest Rate and Monthly Payment, subject only to the exceptions
contained in and clauses (1). (2), (3), and (5) and with respect to each Second
Lien Mortgage Loan clause (4) of paragraph Q) of this Section 8. Where required
by state law or regulation, the Mortgagor has been given the opportunity to
choose the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The related Seller is the sole insured of such lender's title insurance policy,
and such lender's title insurance policy is in full force and effect and will be
in force and effect upon the consummation of the transactions contemplated by
this Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the Mortgage, including the related Seller, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the related Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS. No Encroachments. All
improvements subject to the Mortgage which were considered in determining the
appraised value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of the Mortgaged Property (and wholly within the
project with respect to a condominium unit) except for de minimis encroachments
permitted by the FNMA Guide and which have been noted on the appraisal or the
title policy affirmatively insures against loss or damage by reason of any
violation, variation or encroachment or adverse circumstance which is either
disclosed or would have been disclosed by

<PAGE>

an accurate survey, and no improvements on adjoining properties encroach upon
the Mortgaged Property except those which are insured against by the title
insurance policy referred to in clause (o) above or are acceptable under FNMA or
FHLMC guidelines and all improvements on the property comply with all applicable
zoning and subdivision laws and ordinances;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is (a) with respect to fixed rate
Mortgage Loans, the fixed interest rate set forth in the Mortgage Note and (b)
with respect to Adjustable Rate Mortgage Loans, adjusted semi-annually on each
Interest Rate Adjustment Date to equal the Index plus the Gross Margin, rounded
up or down to the nearest 0.125%, subject to the Periodic Rate Cap and the
Lifetime Rate Cap. The Mortgage Note is payable in equal monthly installments of
principal and interest, which, with interest calculated and payable in arrears,
are 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. The Mortgage Loans have an original term to maturity of not more
than 30 years, with interest payable in arrears on the first day of each month.
No Mortgage Loan contains terms or provisions which would result in negative
amortization; Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the funds were disbursed in connection with the Mortgage
Loan;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, (ii) other wise by
nonjudicial foreclosure, if applicable and (iii) by judicial foreclosure. Upon
default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee's sale
of, the Mortgaged Property pursuant to the proper procedures, the holder of the
Mortgage Loan will be able to deliver good and merchantable title to the
Mortgaged Property. There is no homestead or other exemption available to the
Mortgagor which would interfere with the right to sell the Mortgaged Property at
a trustee's sale or the right to foreclose the Mortgage subject to applicable
federal and state laws and judicial precedent with respect to bankruptcy and
right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as Exhibit 8 hereto. The Mortgage Note and
Mortgage are on forms acceptable to Fannie Mae or Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
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;

<PAGE>

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (I) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Mortgagor is not in bankruptcy
or insolvent and the Sellers have no knowledge of any circumstances or
conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor
or the Mortgagor's credit standing that can reasonably be expected to cause
private institutional investors in the mortgage banking industry to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage Loan,
other than as previously disclosed by the Sellers to the Purchaser;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Sellers under this Agreement have been delivered to the
Purchaser or its Custodian. The Interim Servicer is in possession of a complete,
true and accurate Mortgage File in compliance with Exhibit 2, except for such
documents the originals of which have been delivered to the Purchaser or its
Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. To the extent not prohibited 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. Unless otherwise expressly provided for in the related
Underwriting Guidelines, the Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Sellers, the Mortgagor or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other

<PAGE>

similar provisions currently in effect which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or, to the best of the Sellers' knowledge, threatened for the total or
partial condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Sellers 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Sellers have been
capitalized under the Mortgage or the Mortgage Note. With respect to Adjustable
Rate Mortgage Loans, all Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage Note. Any interest required to be paid pursuant to state and local law
has been properly paid and credited;

                  (hh) APPRAISAL. The Sellers have delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in Exhibit 2 hereof, and all applicable Federal and state laws and
regulations.

<PAGE>

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. (There is no pending action or
proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation, to
the best of the Sellers' knowledge, of any environmental law, rule or regulation
with respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons [and] or trustees for an Illinois land trust or a trustee under
a "living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts];

                  (nn) RIEGLE ACT. Each Mortgage Loan classified as a "high
cost" loan under Section 32 of the Home Ownership and Equity Protection Act of
1994 complies with all applicable rules and regulations with respect to
disclosures and other documentation;

                  (oo) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (pp) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (qq) Prepayment Fee. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

<PAGE>

                  (rr) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (ss) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (tt) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (uu) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File.

                  (vv) With respect to each Mortgage Loan in which the Mortgagor
has a leasehold interest in the related Mortgaged Property:

                  (1) The leasehold was created by direct lease of the freehold
         estate, and the ground lease or memorandum thereof has been recorded
         and by its terms permits the leasehold estate to be mortgaged. The
         ground lease grants any leasehold mortgagee standard protection
         necessary to protect the security of a leasehold mortgagee, including
         the right of the leasehold mortgagee to receive notice of the lessee's
         default under the ground lease, the right of the leasehold mortgagee,
         with adequate time, to cure such default, and, in the case of incurable
         defaults of the lessee, the right of the leasehold mortgagee to enter
         into a new ground lease with the lessor on terms financially identical
         and otherwise substantially identical to the existing ground lease;

                  (2) The ground lease was at the origination of the Mortgage
         Loan and, to the best of the Seller's knowledge is, in full force and
         effect without any outstanding defaults, and was at the origination of
         the Mortgage Loan and, to the best of Sellers' knowledge is, not
         subject to liens and encumbrances;

                  (3) The ground lease shall be automatically renewable for at
         least thirty (30) years or at least ten (10) years beyond the scheduled
         date for the final payment on the Mortgage Loan; and

                  (4) The fee estate of the lessor under the ground lease is
         encumbered by the ground lease, and any lien of any present or future
         fee mortgagee is and will be subject to and subordinate to the ground
         lease. The foreclosure of the fee mortgage will not terminate the
         leasehold estate or the rights of the sub-tenants, and the fee mortgage
         is subject to the ground lease.

<PAGE>

                                 IRWIN MORTGAGE
                                 --------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

<PAGE>

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and

<PAGE>

its successors and assigns as mortgagee, and all premiums thereon have been
paid. The Mortgage obligates the Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor's cost and expense, and on the Mortgagor's
failure to do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at such 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 an opportunity to choose the carrier of the required
hazard insurance, provided the policy is not a "master" or "blanket" hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's or any subservicer's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of either,
including, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected [first or second] lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and

<PAGE>

replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. Unless otherwise disclosed in the
Mortgage Loan Schedule, annexed as Exhibit A of the Assignment and Conveyance,
the Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

<PAGE>

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the [first or second] priority lien of the
Mortgage in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment,] subject only to the exceptions contained in and
clauses (1), (2) and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

<PAGE>

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is [the fixed interest rate set
forth in the Mortgage Note] [adjusted [semi-]annually on each Interest Rate
Adjustment Date to equal the Index plus the Gross Margin, rounded up or down to
the nearest 0.125%, subject to the Initial Periodic Rate Cap, the Periodic Rate
Cap and the Lifetime Mortgage Interest Rate Cap]. The Mortgage Note is payable
in equal monthly installments of principal and interest, [which installments of
interest are subject to change due to adjustments to the Mortgage Interest Rate
on each Adjustable Rate Mortgage Loan,] 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, rounded up or down to the nearest 0.125%, subject to the Initial
Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage Interest Rate
Cap with respect to each Adjustable Rate Mortgage Loan];

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will

<PAGE>

be able to deliver good and merchantable title to the Mortgaged Property. There
is no homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage subject to applicable federal and state laws
and judicial precedent with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties

<PAGE>

required by Fannie Mae with respect to such condominium or planned unit
development have been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second] lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee's consolidated interest or
by other title evidence acceptable to Fannie Mae and Freddie Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS[; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS]. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due

<PAGE>

the Seller have been capitalized under the Mortgage or the Mortgage Note. [All
Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage Note. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited];

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations.

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting of a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons [and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts];

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with

<PAGE>

respect to the making of adjustable rate mortgage loans. The Seller shall
maintain such statement in the Mortgage File;

                  (oo) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;

                  (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

<PAGE>

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably acceptable to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, with
interest calculated and payable in arrears, sufficient to amortize the Mortgage
Loan

<PAGE>

fully by the stated maturity date, over an original term of not more than thirty
years from commencement of amortization;

                  (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. No Mortgage Loan
is insured by a Primary Mortgage Insurance Policy unless otherwise noted on the
Mortgage Loan Schedule.

<PAGE>

                                MASTER FINANCIAL
                                ----------------

                  Subsection 8.03. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on or within 30 days of its Due Date, all in accordance with the terms of
the related Mortgage Note;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds by a
part, other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the title insurer, to the extent required by the 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 part of the Mortgage Loan File delivered to the Purchaser and the
terms of which are reflected in the Mortgage Loan Schedule;

<PAGE>

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac in an amount not less than the greatest of (i) 100%
of the replacement cost of all improvements to the Mortgaged Property, (ii) the
outstanding principal balance of the Mortgage Loan, or (iii) the amount
necessary to avoid the operation of any co-insurance provisions with respect to
the Mortgaged Property, and consistent with the amount that would have been
required as of the date of origination in accordance with the required by Fannie
Mae and Freddie Mac. If upon origination of the Mortgage Loan, the Mortgaged
Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individuaI insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available

<PAGE>

for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a widely-accepted practice, the mortgaged property may be a leasehold estate
and consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a low-rise condominium project, or an individual
unit in a planned unit development, and that no residence or dwelling is (i) a
mobile home or (ii) a manufactured dwelling unless such manufactured dwelling is
(x) permanently affixed to the Mortgaged Property, (y) considered real estate
under applicable local law and (z) conforms to all Fannie Mae requirements. No
portion of the Mortgaged Property is used for commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise consider in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

<PAGE>

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. The documents, instruments and agreements submitted
for loan underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading. No
fraud, error, negligence, misrepresentation or omission of fact with respect to
a Mortgage Loan has taken place on the part of the Seller or the Mortgagor or
any other party involved in the origination or servicing of the Mortgage Loan.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and

<PAGE>

loan associations or national banks having principal offices in such state, or
(5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment,] subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on

<PAGE>

adjoining properties encroach upon the Mortgaged Property. No improvement
located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is (i) with respect to Fixed Rate
Mortgage Loans, the fixed interest rate set forth in the Mortgage Note and (ii)
with respect to Adjustable Rate Mortgage Loans, adjusted semi-annually on each
Interest Rate Adjustment Date to equal the Index plus the Gross Margin, rounded
up or down to the nearest 0.125%, subject to the Periodic Rate Cap and the
Lifetime Rate Cap. Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. No Mortgage Loan contains terms or provisions which would result
in negative amortization. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest are
subject to change due to adjustments to the Mortgage Interest Rate on each, 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, rounded up or down to the
nearest 0.125%, subject to the Periodic Rate Cap and the Lifetime Rate Cap;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 --------- hereto. The Mortgage
Note and Mortgage are on forms acceptable to Fannie Mae or Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

<PAGE>

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Mortgagor is not in bankruptcy
or insolvent and the Seller has no knowledge of any circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) DUE ON SALE. 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;

                  (bb) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (cc) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (dd) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

<PAGE>

                  (ee) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (ff) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (gg) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by an appraiser qualified under Fannie Mae and Freddie Mac
guidelines who (i) is licensed in the state where the Mortgaged Property is
located, (ii) has no interest, direct or indirect, in the Mortgaged Property or
in any Loan or the security therefor, and (iii) does not receive compensation
that is affected by the approval or disapproval of the Loan. The appraisal shall
have been made within one hundred and eighty (180) days of the origination of
the Loan, be completed in compliance with the Uniform Standards of Professional
Appraisal Practice, any additional requirements set forth for appraisals in
EXHIBIT 2 hereof, and all applicable Federal and state laws and regulations. lf
the appraisal was made more than one hundred and twenty (120) days before the
origination of the Loan, the Seller shall have received and deliver to the
purchase a recertification of the appraisal.

                  (hh) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (ii) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

<PAGE>

                  (jj) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) facilitating the trade-in or exchange of a Mortgaged
Property or (ii) the construction or rehabilitation of a Mortgaged Property,
unless the Mortgage Loan is a construction-to-permanent mortgage loan listed on
the Mortgage Loan Schedule which has been fully disbursed, all construction work
is complete and a completion certificate has been issued;

                  (kk) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, or bankruptcy
bond, 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 the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;

                  (ll) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts];

                  (mm) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of Adjustable Rate
Mortgage Loans. The Seller shall maintain such statement in the Mortgage File;

                  (nn) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of
1994;][Each Mortgage Loan classified as a "high cost" loan under Section 32 of
the Home Ownership and Equity Protection Act of 1994 complies with all
applicable rules and regulations with respect to disclosures and other
documentation;

                  (oo) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

<PAGE>

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (pp) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (qq) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (rr) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a Prepayment Fee feature, each such Prepayment Fee is enforceable and will
be enforced by the Seller for the benefit of DLJ, and each Prepayment Fee is
permitted pursuant to federal, state and local law. Each such Prepayment Fee is
in an amount equal to the maximum amount permitted under applicable law;

                  (ss) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (tt) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (uu) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File.

                  (vv) LEASEHOLDS. lf the Mortgage Loan is secured by a
long-term residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without the
lessor's consent and the acquisition by the holder of the Mortgage of the rights
of the lessee upon

<PAGE>

foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice.

<PAGE>

                                IVY MORTGAGE INC.

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

<PAGE>

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all building or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of

<PAGE>

Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mae. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

<PAGE>

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other mailers to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting the Servicing File and has made such

<PAGE>

inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan and 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 Interest
Rate and Monthly Payment, subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be

<PAGE>

received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note adjusted semi-annually on each Interest Rate Adjustment
Date to equal the Index plus the Gross Margin, rounded up or down to the nearest
0.125%, subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the
Lifetime Mortgage Interest Rate Cap. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest
are subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan, 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, rounded up or down to the nearest 0.125%, subject to the Initial
Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage Interest Rate
Cap with respect to each Adjustable Rate Mortgage Loan;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the

<PAGE>

case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage
Loan and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant
to the proper procedures, the holder of the Mortgage Loan will be able to
deliver good and merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private, institutional investors to regard the Mortgage
Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit

<PAGE>

development) such condominium or planned unit development project meets Fannie
Mae eligibility requirements for sale to Fannie Mae or is located in a
condominium or planned unit development project which has received Fannie Mae
project approval and the representations and warranties required by Fannie Mae
with respect to such condominium or planned unit development have been made and
remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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

<PAGE>

federal law. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations.

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

<PAGE>

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

                  (oo) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;
Each Mortgage Loan classified as a "high cost" loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 complies with all applicable rules
and regulations with respect to disclosures and other documentation;

                  (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

<PAGE>

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint less payee
and mortgagee rights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the pan of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage

<PAGE>

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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;

                  (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than _____%. Except for Mortgage Loans underwritten
in accordance with a lender Paid Mortgage Insurance Policy Program, if a
Mortgage Loan has an LTV greater than 80%, the excess of the principal balance
of the Mortgage Loan over 75% of the Appraised Value, with respect to a
Refinanced Mortgage Loan, or the lesser of the Appraised Value or the purchase
price of the Mortgaged Property, with respect to a purchase money Mortgage Loan,
is and will be insured as to payment defaults by a Primary Mortgage Insurance
Policy issued by a Qualified Insurer. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for the
Mortgage Loan as set forth on the Mortgage Loan Schedules net of any such
insurance premium.

<PAGE>

                             MORTGAGE NETWORK, INC.
                             ----------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The issuance of any such waiver, alteration or modification has been approved by
the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause named by the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such 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 an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and inure to the benefit
of the Purchaser upon the consummation of the transactions contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's or any subservicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either, including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

<PAGE>

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four- family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

<PAGE>

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and

<PAGE>

loan associations or national banks having principal offices in such state, or
(5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment, subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

<PAGE>

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority The Mortgage Interest Rate is (a) with respect to Fixed Rate
Mortgage Loans, the fixed interest rate set forth in the Mortgage Note or (b)
with respect to Adjustable Rate Mortgage Loans, adjusted annually on each
Interest Rate Adjustment Date to equal the Index plus the Gross Margin, rounded
up or down to the nearest 0.125%, subject to the Initial Periodic Rate Cap, the
Periodic Rate Cap and the Lifetime Mortgage Interest Rate Cap. The Mortgage Note
is payable in equal monthly installments of principal and interest, which
installments of interest are subject to change due to adjustments to the
Mortgage Interest Rate on each Adjustable Rate Mortgage Loan, 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, rounded up or down to the
nearest 0.125%, subject to the Initial Periodic Rate Cap, the Periodic Rate Cap
and the Lifetime Mortgage Interest Rate Cap with respect to each Adjustable Rate
Mortgage Loan;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto.

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

<PAGE>

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT Interests. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision.

<PAGE>

The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within one hundred twenty (120) days of
the origination of the Loan, be completed in compliance with the Uniform
Standards of Professional Appraisal Practice, any additional requirements set
forth for appraisals in EXHIBIT 2 hereof, and all applicable Federal and state
laws and regulations.

<PAGE>

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

                  (oo) RIEGLE ACT. Each Mortgage Loan classified as a "high
cost" loan under Section 32 of the Home Ownership and Equity Protection Act of
1994 complies with all applicable rules and regulations with respect to
disclosures and other documentation;

                  (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the
foregoing,

<PAGE>

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

<PAGE>

                  (tt) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser:

                  (uu) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (vv) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

                  (ww) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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;

                  (xx) LTV, PRIMARY MORTGAGE INSURANCE POLICY. No Mortgage Loan
has an LTV in excess of 90%. Except for Mortgage Loans underwritten in
accordance with a Lender Paid Mortgage Insurance Policy Program or as otherwise
set forth in the Seller's Underwriting Guidelines, if a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan over
75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or the
lesser of the Appraised Value or the purchase price of the Mortgaged Property,
with respect to a purchase money Mortgage Loan, is and will be insured as to
payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified
insurer. All provisions of such Primary Mortgage

<PAGE>

Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for the
Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such
insurance premium.

<PAGE>

                         PROVIDENT FUNDING ASSOCIATES LP
                         -------------------------------

                  Section 3.02      REPRESENTATIONS AND WARRANTIES AS TO
                                    INDIVIDUAL MORTGAGE LOANS.

                  References in this Section to percentages of Mortgage Loans
refer in each case to the percentage of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, based on the outstanding balances of the
Mortgage Loans as of the Cut-off Date, and giving effect to scheduled Monthly
Payments due on or prior to the Cut-off Date, whether or not

<PAGE>

received. References to percentages of Mortgaged Properties refer, in each case,
to the percentages of expected aggregate principal balances of the related
Mortgage Loans (determined as described in the preceding sentence). The Seller
hereby represents and warrants to the Purchaser, as to each Mortgage Loan, as of
the Closing Date as follows:

                  (a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes sent to the Purchaser, is
complete, true and correct in all material respects as of the Cut-Off Date;

                  (b) With respect to a Mortgage Loan that is not a Co-op Loan,
the Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Mortgage Loan that is a Co-op Loan, the Mortgage creates a first
lien or a first priority ownership interest in the stock ownership and leasehold
rights associated with the cooperative unit securing the related Mortgage Note;

                  (c) All payments due prior to the Cut-off Date for such
Mortgage Loan have been made as of the Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and has not been dishonored; there are
no material defaults under the terms of the Mortgage Loan; the Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required by the
Mortgage Loan; and there has been no more than one delinquency during the
preceding twelve-month period, and such delinquency did not last more than 30
days;

                  (d) There are no defaults by Seller in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

                  (e) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof except
in connection with an assumption agreement and which assumption agreement is
part of the Mortgage File and the terms of which are reflected in the Mortgage
Loan Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Mortgage Insurance Policy and
title insurance policy, to the extent required by the related policies;

                  (f) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury,

<PAGE>

nor will the operation of any of the terms of the Mortgage Note or the Mortgage,
or the exercise of any right thereunder, render the Mortgage Note or Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto; and the Mortgagor was not a debtor in any state or federal
bankruptcy or insolvency proceeding at the time the Mortgage Loan was
originated;

                  (g) All buildings or other customarily insured improvements
upon the Mortgaged Property are insured by an insurer acceptable under the FNMA
Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the FNMA Guides or by FHLMC, as well as all
additional requirements set forth in Section 4.10 of this Agreement. All such
standard hazard policies are in full force and effect and on the date of
origination contained a standard mortgagee clause naming the Seller and its
successors in interest and assigns as loss payee and such clause is still in
effect and all premiums due thereon have been paid. If required by the Flood
Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration which policy conforms to FNMA and FHLMC
requirements, as well as all additional requirements set forth in Section 4.10
of this Agreement. Such policy was issued by an insurer acceptable under FNMA or
FHLMC guidelines. 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 the Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;

                  (h) 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 or
disclosure laws applicable to the Mortgage Loan have been complied with in all
material respects;

                  (i) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, 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 release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;

                  (j) The Mortgage is a valid, subsisting, enforceable and
perfected first lien on the Mortgaged Property, including for Mortgage Loans
that are not Co-op Loans, all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all adverse claims, liens

<PAGE>

and encumbrances having priority over the first lien of the Mortgage subject
only to (1) the lien of non-delinquent current real property taxes and
assessments not yet due and payable, (2) covenants, conditions and restrictions,
rights of way, easements and other matters of the public record as of the date
of recording which are acceptable to mortgage lending institutions generally and
either (A) which are referred to or otherwise considered in the appraisal made
for the originator of the Mortgage Loan, or (B) which do not adversely affect
the appraised value of the Mortgaged Property as set forth in such appraisal,
and (3) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and perfected first
lien and first priority security interest on the property described therein, and
the Seller has the full right to sell and assign the same to the Purchaser;

                  (k) The Mortgage Note and the related Mortgage are original
and genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency and other laws of general application affecting the
rights of creditors and the Seller has taken all action necessary to transfer
such rights of enforceability to the Purchaser. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of Seller or the
Mortgagor, or, on the part of any other party involved in the origination of the
Mortgage Loan. The proceeds of the Mortgage Loan have been fully disbursed and
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 the Mortgage Loan and the
recording of the Mortgage were paid or are in the process of being paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

                  (1) The Seller or its affiliate is the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage
Note, except for the assignments of mortgage which have been sent for recording,
and upon recordation the Purchaser or its designee will be the owner of record
of the Mortgage and the indebtedness evidenced by the Mortgage Note, and upon
the sale of the Mortgage Loan to the Purchaser, the Seller will retain the
Mortgage File or any part thereof with respect thereto not delivered to the
Purchaser or the Purchaser's designee in trust only for the purpose of servicing
and supervising the servicing of the Mortgage Loan. Immediately prior to the
transfer and assignment to the Purchaser on the Closing Date, the Mortgage Loan,
including the Mortgage Note and the Mortgage, were not subject to an assignment
or pledge, and the Seller had good and marketable title to and was the sole
owner thereof and had 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 has the full right and authority subject to no interest
or participation of, or agreement with, any other

<PAGE>

party, to sell and assign the Mortgage Loan pursuant to this Agreement and
following the sale of the Mortgage Loan, the Purchaser will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Seller intends to relinquish all
rights to possess, control and monitor the Mortgage Loan, except for the
purposes of servicing the Mortgage Loan as set forth in this Agreement. After
the Closing Date, the Seller will have no right to modify or alter the terms of
the sale of the Mortgage Loan and the Seller will have no obligation or right to
repurchase the Mortgage Loan or substitute another Mortgage Loan, except as
provided in this Agreement, or as otherwise agreed to by the Seller and the
Purchaser;

                  (m) Each Mortgage Loan that is not a Co-op Loan is covered by
an ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to FNMA or FHLMC and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions
contained in (j)(1), (2) and (3) above) the Seller, its successors and assigns,
as to the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan. Where required by state law or regulation, the Mortgagor
has been given the opportunity to choose the carrier of the required mortgage
title insurance. The Seller, its successors and assigns, are the sole insureds
of such lender's title insurance policy, such title insurance policy has been
duly and validly endorsed to the Purchaser or the assignment to the Purchaser of
the Seller's interest therein does not require the consent of or notification to
the insurer and such lender's title insurance policy is in full force and effect
and will be in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;

                  (n) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Seller nor any prior mortgagee has
waived any default, breach, violation or event permitting acceleration;

                  (o) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the related
Mortgage;

                  (p) All improvements subject to the Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit) and
no improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred

<PAGE>

to in clause (m) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;

                  (q) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with all the terms, conditions and requirements of the
Seller's Underwriting Standards in effect at the time of origination of such
Mortgage Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on
forms generally acceptable to FNMA or FHLMC. Seller is currently selling loans
to FNMA and/or FHLMC which are the same document forms as the Mortgage Notes and
Mortgages (inclusive of any riders). The Mortgage Loan bears interest at a fixed
rate as set forth in the Mortgage Loan Schedule, and Monthly Payments under the
Mortgage Note are due and payable on the first day of each month. The Mortgage
contains the usual and enforceable provisions of the originator at the time of
origination for the acceleration of the payment of the unpaid principal amount
of the Mortgage Loan if the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder;

                  (r) The Mortgaged Property is not subject to any material
damage by waste, fire, earthquake, windstorm, flood or other casualty. At
origination of the Mortgage Loan there was, and there currently is, no
proceeding pending for the total or partial condemnation of the Mortgaged
Property. There have not been any condemnation proceedings with respect to the
Mortgaged Property and there are no such proceedings scheduled to commence at a
future date;

                  (s) The related Mortgage contains 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, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no homestead or other exemption available to the Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;

                  (t) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;

                  (u) The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, approved by the Seller, 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, and the appraisal and appraiser both satisfy
the requirements of FNMA or FHLMC and Title XI of the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date

<PAGE>

the Mortgage Loan was originated. The appraisal is in a fonn acceptable to FNMA
or FHLMC and was made by a Qualified Appraiser;

                  (v) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;

                  (w) The related Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

                  (x) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of such mortgage loans;

                  (y) The Mortgage Loan does not contain "graduated payment"
features; to the extent any Mortgage Loan contains any buydown provision, such
buydown funds have been maintained and administered in accordance with, and such
Mortgage Loan otherwise complies with, FNMA/FHLMC requirements relating to
buydown loans;

                  (z) The Mortgagor is not in bankruptcy and, the Mortgagor is
not insolvent or in bankruptcy and the Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor's credit standing that could reasonably be
expected to cause investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or materially
adversely affect the value or marketability of the Mortgage Loan;

                  (aa) The Mortgage Loans are fixed rate mortgage loans. The
Mortgage Loans have an original term to maturity of not more than 30 years, with
interest payable in arrears on the first day of each month. Each Mortgage Note
requires a monthly payment which is sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate. No Mortgage Loan contains terms or provisions
which would result in negative amortization.

                  (bb) Except for Mortgage Loans (1) specifically not required
by the Purchaser to be subject to a Primary Mortgage Insurance Policy or (2)
underwritten in accordance with the Lender Paid Mortgage Insurance Policy
Program, if a Mortgage Loan has an LTV greater than 80%, the excess of the
principal balance of the Mortgage Loan over 75% of the Appraised Value, with
respect to a Refinanced Mortgage Loan, or the lesser of the Appraised Value or
the purchase price of the Mortgaged Property, with respect to a purchase money
Mortgage Loan, is and will be

<PAGE>

insured as to payment defaults by a Primary Mortgage Insurance Policy issued by
a Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium;

                  (cc) The assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (dd) As to Mortgage Loans that are not Co-op Loans and that
are not secured by an interest in a leasehold estate, the Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a townhouse, 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 de minimis planned unit development, provided, however,
that no residence or dwelling is a single parcel of real property with a
cooperative housing corporation erected thereon, or a mobile home. As of the
date of origination, no portion of the Mortgaged Property is used for commercial
purposes, and since the date or origination no portion of the Mortgaged Property
is used for commercial purposes;

                  (ee) Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, 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;

                  (ff) Certain Mortgage Loans as specified on the Mortgage Loan
Schedule may contain a Prepayment Penalty in an amount specified in the related
Mortgage Note or Mortgage.

                  (gg) As of the date of origination of the Mortgage Loan, the
Mortgage Property was lawfully occupied under applicable law, and 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;

                  (hh) If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development), or
stock in a cooperative

<PAGE>

housing corporation, such condominium, cooperative or planned unit development
project meets Seller's eligibility requirements as set forth in Seller's
underwriting guidelines;

                  (ii) There is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental law,
rule or regulation is an issue; there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to use and enjoyment of said property;

                  (j) The Mortgagor has not notified the Seller, and the Seller
has no knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;

                  (kk) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property or facilitating the
trade-in or exchange of a Mortgaged Property;

                  (ll) No action has been taken or failed to be taken by Seller,
on or prior to the Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller, or for any other reason under such coverage;

                  (mm) Each Mortgage Loan has been serviced in all material
respects in compliance with Accepted Servicing Practices;

                  (nn) With respect to each Co-op Loan, the related Mortgage is
a valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;

                  (oo) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to FNMA and qualified to do business in the
jurisdiction where the cooperative unit is

<PAGE>

located, and such search has not found anything which would materially and
adversely affect the Co-op Loan;

                  (pp) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the
Internal Revenue Code, and is in material compliance with applicable federal,
state and local laws which, if not complied with, could have a material adverse
effect on the Mortgaged Property;

                  (qq) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;

                  (rr) The Mortgage Loan was originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank,
a commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority; and

                  (ss) With respect to any ground lease to which a Mortgaged
Property may be subject: (i) the Mortgagor is the owner of a valid and
subsisting leasehold interest under such ground lease: (ii) such ground lease is
in full force and effect, unmodified and not supplemented by any writing or
otherwise; (iii) all rent, additional rent and other charges reserved therein
have been fully paid to the extent payable as of the Closing Date; (iv) the
Mortgagor enjoys the quiet and peaceful possession of the leasehold estate,
subject to any sublease; (v) the Mortgagor is not in default under any of the
terms of such ground lease, and there are no circumstances which, with the
passage of time or the giving of notice, or both, would result in a default
under such ground lease; (vi) the lessor under such ground lease is not in
default under any of the terms or provisions of such ground lease on the part of
the lessor to be observed or performed; (vii) the lessor under such ground lease
has satisfied any repair or construction obligations due as of the Closing Date
pursuant to the terms of such ground lease; and (viii) the execution, delivery
and performance of the Mortgage do not require the consent (other than those
consents which have been obtained and are in full force and effect) under, and
will not contravene any provision of or cause a default under, such ground
lease.

                  (tt) With respect to any broker fees collected and paid on any
of the loans, all broker fees have been properly assessed to the borrower and no
claims will arise as to broker fees that are double charged and for which the
borrower would be entitled to reimbursement.

<PAGE>

                           CHAPEL MORTGAGE CORPORATION
                           ---------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage

<PAGE>

Loan been delinquent for more than 30 days more than once in the 12 months
preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance

<PAGE>

policy meeting the requirements of the current guidelines of the Federal Flood
Insurance Administration is in effect which policy conforms to the requirements
of Fannie Mae and Freddie Mac. All individual insurance policies contain a
standard mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such 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 an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the

<PAGE>

Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

<PAGE>

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment, subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

<PAGE>

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being pan of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate with respect to each Fixed Rate
Mortgage Loan is the fixed interest rate set forth in the Mortgage Note. The
Mortgage Interest Rate with respect to each Adjustable Rate Mortgage Loan is
adjusted semi-annually on each Interest Rate Adjustment Date to equal the Index
plus the Gross Margin, rounded up or down to the nearest 0.125%, subject to the
Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage
Interest Rate Cap. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest with respect to the
Adjustable Rate Mortgage Loans are subject to change due to adjustments to the
Mortgage Interest Rate on each such Adjustable Rate Mortgage Loan, 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 each Fixed Rate Mortgage
Loan or over an original term of not more than forty years from commencement of
amortization with respect to each Adjustable Rate Mortgage Loan, rounded up or
down to the nearest 0.125%, subject to the Initial Periodic Rate Cap, the
Periodic Rate Cap and the Lifetime Mortgage Interest Rate Cap; provided,
however, in the case of a balloon Mortgage Loan, the Mortgage Loan matures at
least five (5) years after the first payment date thereby requiring a final
payment of the outstanding principal balance prior to the full amortization of
the Mortgage Loan;

<PAGE>

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

<PAGE>

                  ( (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimus planned unit development) such condominium or planned unit
development project meets Fannie Mae eligibility requirements for sale to Fannie
Mae or is located in a condominium or planned unit development project which has
received Fannie Mae project approval and the representations and warranties
required by Fannie Mae with respect to such condominium or planned unit
development have been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  ( (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage
is in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller and there exist

<PAGE>

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. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay for
every item which remains unpaid and which has been assessed but is not yet due
and payable. No escrow deposits or Escrow Payments or other charges or payments
due the Seller have been capitalized under the Mortgagor the Mortgage Note. All
Mortgage Interest Rate adjustments with respect to the Adjustable Rate Mortgage
Loans have been made in strict compliance with state and federal law and the
terms of the related Mortgage Note. Any interest required to be paid pursuant to
state and local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations;

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

<PAGE>

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

                  (oo) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;

                  (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

<PAGE>

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Except as otherwise set forth on the Mortgage Loan
Schedule, with respect to each Mortgage Loan that contains a Prepayment Penalty,
such Prepayment Penalty is at least equal to the lesser of (A) the maximum
amount permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan;

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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

<PAGE>

the Mortgage Loan and the recording of the Mortgage were paid or are in the
process of being paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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 each Fixed Rate
Mortgage Loan or an original term of not more than forty years from commencement
of amortization with respect to each Adjustable Rate Mortgage Loan; provided,
however, in the case of a balloon Mortgage Loan, the Mortgage Loan matures at
least five (5) years after the first payment date thereby requiring a final
payment of the outstanding principal balance prior to the full amortization of
the Mortgage Loan;

                  (yy) LTV. PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than ___%. Except for Mortgage Loans underwritten in
accordance with a Lender Paid Mortgage Insurance Policy Program, if a Mortgage
Loan has an LTV greater than 80%, the excess of the principal balance of the
Mortgage Loan over 75% of the Appraised Value, with respect to a Refinanced
Mortgage Loan, or the lesser of the Appraised Value or the purchase price of the
Mortgaged Property, with respect to a purchase money Mortgage Loan, is and will
be insured as to payment defaults by a Primary Mortgage Insurance Policy issued
by a Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium; and

                  (zz) SERVICING PRACTICES. Each Mortgage Loan has been serviced
in all material respects in compliance with those mortgage servicing practices
(including collection procedures) of prudent mortgage banking institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.

<PAGE>

                    CIT/GROUP REPRESENTATIONS AND WARRANTIES

3.       SELLER'S REPRESENTATIONS. WARRANTIES AND COVENANTS. To induce Buyer to
         enter into this Agreement and purchase Mortgage Loans from the Sellers,
         each Seller makes the following representations, warranties and
         covenants to Buyer which shall be deemed to have been true, correct and
         restated as of the Closing Date:

         A. AS TO EACH SELLER.

         (i) The Seller is a company duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry out its business as now being conducted, and is
licensed and qualified to transact business in and is in good standing under the
laws of each state in which any Mortgaged Property related to a Mortgage Loan
sold by it is located or is otherwise exempt under applicable law from such
licensing or qualification or is otherwise not required under applicable law to
effect such licensing or qualification and no demand for such licensing or
qualification has been made upon such Seller by any such state, and in any event
such Seller is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of each Mortgage Loan sold by it and the
servicing of the Mortgage Loans in accordance with the terms of this Agreement;

         (ii) The Seller has the full power and authority and legal right to
hold, transfer and convey each Mortgage Loan sold by it, to sell each such
Mortgage Loan and to execute, deliver and perform, and to enter into and
consummate all transactions contemplated by this Agreement and to conduct its
business as presently conducted, has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, and any agreements contemplated hereby,
and this Agreement and each assignment of Mortgage if applicable, to the Buyer
and any agreements contemplated hereby, constitutes a legal, valid and binding
obligation of the Seller, enforceable against it in accordance with its terms,
and all requisite corporate action has been taken by the Seller to make this
Agreement and all agreements contemplated hereby valid and binding upon the
Seller in accordance with their terms;

         (iii) None of the execution and delivery of this Agreement, the
origination by the Seller of the Mortgage Loans originated and sold by it, the
sale of such Mortgage Loans to the Buyer, the consummation of the transactions
contemplated hereby, or the fulfillment of or compliance with the terms and
conditions of this Agreement will conflict with any of the terms, conditions or
provisions of the Seller's charter, by-laws or other organizational documents or
materially conflict with or result in a material breach of any of the terms,
conditions or provisions of any legal restriction or any agreement or instrument
to which the Seller is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the material violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject;

         (iv) Each Mortgage Note, each Mortgage, each assignment of Mortgage and
any other documents required pursuant to this Agreement to be delivered to the
Buyer or its designee, or its

<PAGE>

assignee for each Mortgage Loan, will be, on or before the Closing Date,
delivered by the Seller to the Buyer or its designee, or its assignee;

         (v) There is no litigation, suit, proceeding or investigation pending
or threatened, or any order or decree outstanding, with respect to the Seller
which is reasonably likely to have a material adverse effect on the sale of the
Mortgage Loans sold by it, the execution, delivery, performance or
enforceability of this Agreement, or which is reasonably likely to have a
material adverse effect on the financial condition of the Seller;

         (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,
except for consents, approvals, authorizations and orders which have been
obtained;

         (vii) The consummation of the transactions contemplated by this
Agreement is in the ordinary course of business of the Seller, and the transfer,
assignment and conveyance of the related Mortgage Notes and the Mortgages by the
Seller pursuant to this Agreement are not subject to bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction;

         The origination, collection and servicing practices used by the Seller,
with respect to each Mortgage Note and Mortgage related to the Mortgage Loans
originated and sold by it have been legal and in accordance with applicable laws
and regulations, and in all material respects proper and prudent in the mortgage
origination and servicing business. With respect to escrow deposits and payments
that the Seller is entitled to collect, all such payments are in the possession
of, or under the control of, the Seller, 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 the provisions of the related Mortgage Note and
Mortgage. As to any Mortgage Loan sold by the Seller that is the subject of an
escrow, escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every escrowed item that remains
unpaid and has been assessed but is not yet due and payable. With respect to
each Mortgage Loan sold by the Seller, no escrow deposits or other charges or
payments due under the Mortgage Note have been capitalized under any Mortgage or
the related Mortgage Note. With respect to escrow deposits and Escrow Payments
(other than with respect to second lien Mortgage Loans for which the Mortgagee
under the prior mortgage lien is collecting Escrow Payments), all such payments
are in the possession of the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All escrow of funds is not prohibited by applicable law and has
been established in an amount sufficient to pay for every item which remains
unpaid and which has been assessed but is not yet due and payable. No escrow
deposits or escrow payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. (All mortgage interest
rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited);

<PAGE>

         (viii) The Seller is duly qualified, licensed, registered and otherwise
authorized under all applicable federal, state and local laws, and regulations,
if applicable to, conduct its business as currently conducted by it;

         (ix) The Seller will treat the sale of the Mortgage Loans sold by it to
the Buyer as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;

         (x) The Seller does not believe, nor does it have any cause or reason
to believe, that it cannot perform each and every covenant contained in this
Agreement. The Seller is solvent and the sale of the Mortgage Loans by it will
not cause the Seller to become insolvent. The sale of the Mortgage Loans by the
Seller is not undertaken with the intent to hinder, delay or defraud any of the
Seller's creditors;

         (xi) No statement, tape, diskette, form, report or other document
prepared by, or on behalf of, the Seller pursuant to this Agreement, the Bill of
Sale or in connection with the transactions contemplated hereby, contains or
will contain any statement that is or will be inaccurate or misleading in any
material respect. The Seller has prudently originated and underwritten each
Mortgage Loan sold by it in accordance with its underwriting guidelines. To the
extent said underwriting guidelines have been exceeded, there are compensating
factors, consistent with industry standards, justifying the Seller to make the
Mortgage Loan;

         (xii) The Seller acknowledges and agrees that the interim servicing fee
represents reasonable compensation for performing such services and that the
entire interim servicing fee shall be treated by the Seller, for accounting and
tax purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;

         (xiii) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans sold by it.

         (xiv) The consideration received by Seller upon the sale of the
Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans.

         B.   AS TO EACH MORTGAGE LOAN, ON THE CLOSING DATE:

         (i) The information set forth in the Mortgage Loan Schedule, including
any diskette or other related data tapes sent to the Buyer, is complete, true
and correct in all material respects as of the Cut-Off Date.

         (ii) Except as set forth herein and as indicated on the Mortgage Loan
Schedule, all payments due on or prior to the Cut-Off Date for such Mortgage
Loan have been made as of the Closing Date, the Mortgage Loan is not delinquent
more than thirty (30) days and has not been dishonored; there are no material
defaults under the terms of the Mortgage Loan; the Seller has not advanced
finds, or induced, solicited or knowingly received any advance of funds from a
party other than the owner of the Mortgaged Property subject to the Mortgage,
directly or indirectly, for the payment of any amount required by the Mortgage
Loan sold by it; and there has been no more than

<PAGE>

one delinquency during the preceding twelve (12) month period, and such
delinquency did not last more than thirty (30) days. Buyer shall purchase up to
2.5% of the Mortgage Loans (by aggregate principal balance as of the Cut-Off
Date) which are up to thirty (30) days delinquent as of the Closing Date.

         (iii) To the best of Seller's actual knowledge, there are no unpaid
taxes, governmental assessments, insurance premiums, ground rent, leasehold
payments, insurance premiums, water, sewer and municipal charges affecting the
Mortgaged Property which are due and payable, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable.

         (iv) The terms of the Mortgage and Mortgage Note have not been
impaired, waived, altered, released or modified in any respect, except by
instruments, the originals or certified true copies of which are in the Mortgage
File and the terms of which are reflected in the Mortgage Loan Schedule.

         (v) The Mortgage Loan, including without limitation the origination,
servicing and transfer thereof, the Mortgage, the Mortgage Note and any
insurance policy, certificate and coverage relating thereto, comply with all
applicable federal, state and local laws, rules, regulations and ordinances
including, without limitation, all usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or
disclosure laws applicable to the Mortgage Loan. The Mortgagor has received all
disclosure materials required by applicable law with respect to the making of
such Mortgage Loans.

         (vi) All buildings on the Mortgaged Property are insured against loss
by (a) fire, (b) hazards of extended coverage, and (c) such other hazards as are
customary in the area by an insurer licensed to sell such insurance in the
jurisdiction in which Mortgaged Property is located. With respect to each
Mortgage Loan originated by the Seller, on the date of origination such Mortgage
Loan contained a standard mortgagee clause naming the Seller and its successors
in interest and assigns as loss payee and such clause is still in effect and all
premiums due thereon have been paid. If the Mortgaged Property is located in a
flood zone, the Mortgage Property is covered by a flood insurance policy. Each
Mortgage obligates the Mortgagor thereunder to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor, with all such sums as may be advanced by the Mortgagee to be added to
the Mortgage indebtedness and secured by the Mortgage.

         (vii) The Mortgage has not been satisfied or subordinated, in whole or
in part, or rescinded. No Mortgagor has been released, in whole or in part from
such Mortgagor's obligations under the Mortgage Note, and the Mortgaged Property
has not been released, in whole or in part, from the lien of the Mortgage. The
Seller has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor.

         (viii) The Mortgage, as transferred to Buyer, is a valid, subsisting
and enforceable first or second lien on the Mortgaged Property, and to the
extent that state law in the jurisdiction where the Mortgaged Property is
located provides that a Mortgage will encumber all buildings on the

<PAGE>

Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems affixed to such buildings, and all
additions, alterations and replacements made at any time with respect thereto
("Fixtures"), said Mortgage constitutes a lien of on the Fixtures of equal
priority as the Mortgaged Property securing the Mortgage Note's original
principal balance, as set forth in the Mortgage Loan Schedule. Such lien and
Mortgaged Property are subject only to (a) the lien of an approved Senior
Mortgage with an approved unpaid balance, if the Mortgage is a second Mortgage,
(b) the lien of current real property taxes and assessments, water, sewer and
municipal charges, ground rents, rates and assessments not yet due and payable,
and (c) covenants, conditions and restrictions, rights of way, easements and
other matters of the public record acceptable to mortgage lending institutions
generally and set forth in the title policy or search for the respective
Mortgage Loan, which do not impair the value of the property.

         (ix) To the best of Seller's actual knowledge, all parties to the
Mortgage Note, Mortgage, and all other documents in the Mortgage File were the
real parties in interest on the Mortgage Loan and not mere nominees or
accommodation parties for any other persons and had full legal capacity to
execute same. All signatures are the genuine and authentic signatures of the
person they purport to be.

         (x) The Mortgage Note and the Mortgage have not been assigned, pledged,
or hypothecated, nor subject to any security agreement by Seller. The Seller or
its affiliate is the sole owner of record and holder of the Mortgage Loan and
the indebtedness evidenced by the Mortgage Note, except for the assignments of
Mortgage which have been sent for recording, and upon recordation the Buyer or
its designee will be the owner of record of the Mortgage and the indebtedness
evidenced by the Mortgage Note. Seller has good and marketable title to the
Mortgage Loan and is the sole owner thereof and has full and unrestricted right
to sell, assign and transfer the Mortgage Loan, the Mortgage Note, the Mortgage
and the Mortgage File to Buyer free and clear of any liens, encumbrances,
equities, loans, pledges, charges, claims, participation interests or security
interests. The Seller will take all action necessary to transfer all fights of
enforceability to Buyer no later than the Closing Date.

         (xi) Following the sale of each Mortgage Loan, the Buyer will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends to
relinquish all rights to possess, control and monitor the Mortgage Loan except
for the purposes of servicing the Mortgage Loan as set forth in this Agreement.
After the Closing Date, the Seller will have no right to modify or alter the
terms of the sale of the Mortgage Loan and the Seller will have no obligation or
right to repurchase the Mortgage Loan or substitute another Mortgage Loan,
except as provided in this Agreement, or as otherwise agreed to by the Seller
and the Buyer.

         (xii) With respect to each Mortgage Loan sold by the Seller, the
related Mortgage Note and Mortgage is not subject to any 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 such Mortgage Note or
Mortgage, or the exercise of any right thereunder, render such Mortgage Note or
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or

<PAGE>

defense has been asserted with respect thereto; and the related Mortgagor was
not a debtor in any state or federal bankruptcy or insolvency proceeding at the
time such Mortgage Loan was originated.

         (xiii) No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of the Seller or the Mortgagor, and, to the best of Seller's knowledge, on the
part of any other party involved in the origination of the Mortgage Loan.

         (xiv) The lien of the Mortgage is insured under an ALTA form lenders
title insurance policy (the most current such form approved for use in the state
in which the Mortgaged Property is located), or, a title search consistent with
Seller's credit policies. Each such title insurance policy will have been issued
by a title qualified to do business in the jurisdiction where the Mortgage
Property is located. Each such title insurance policy shall insure (subject to
the exceptions contained in (viii)(a), (b) and (c) above) the Seller, its
successors and assigns, as to the lien priority of the Mortgage in the original
principal amount of the Mortgage Loan. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. The Seller, its successors and
assigns, are the sole insureds of such lender's title insurance policy, such
title insurance policy has been duly and validly endorsed to the Buyer or the
assignment to the Buyer of the Seller's interest therein does not require the
consent of or notification to the insurer and such lender's title insurance
policy is in full force and effect and will be in full force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy.

         (xv) There is no default, breach, violation or event of default and/or
acceleration existing under the Mortgage Note or Mortgage or to Seller's
knowledge under the Senior Mortgage, if any, nor is there any state of facts
which, with the passage of time or the giving of notice or both, could give rise
to such default, breach, violation or event of default and/or acceleration. With
respect to each second lien Mortgage Loan, at the time of origination of the
Mortgage Loan (i) the Senior Mortgage was in full force and effect, (ii) there
was no default, breach, violation or event of acceleration existing under such
prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder.

         (xvi) To the best of Seller's actual knowledge, there are no mechanic's
or materialman's liens or claims for work, labor or materials affecting the
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the Mortgage.

         (xvii) To the best of Seller's knowledge, at the time of closing, the
Mortgaged Property was not subject to any material damage by waste, fire,
earthquake, windstorm, flood or other casualty. At origination of the Mortgage
Loan there was, and there currently is, no proceeding pending for the total or
partial condemnation of the Mortgaged Property. There have not been any
condemnation proceedings with respect to the Mortgaged Property and there are no
such proceedings scheduled to commence at a future date.

<PAGE>

         (xviii) The Mortgage Loan was originated or acquired by the Seller.
Each Mortgage Loan was underwritten in accordance with Seller's credit
underwriting guidelines previously provided to Buyer. To the extent that the
Mortgage Loans were underwritten in excess of those guidelines, there were other
compensating factors (which compensating factors are generally reflected in the
credit file) which, consistent with industry standards, reasonably justified the
Seller in making the Mortgage Loan to the Mortgagor. The Mortgage Loan bears
interest at a fixed rate as set forth in the Mortgage Loan Schedule. The
Mortgage contains the usual and enforceable provisions of the originator at the
time of origination for the acceleration of the payment of the unpaid principal
amount of the Mortgage Loan if the related Mortgaged Property is sold without
the prior consent of the mortgagee thereunder.

         (xix) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation.

         (xx) The Mortgage contains customary and enforceable provisions so 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, but not limited to, (a) in case of a Mortgage
designated as a deed of trust, enforcement by trustee's sale or power of sale,
and (b) otherwise by judicial foreclosure, (c) the right of the Mortgagee upon
failure by the Mortgagor to make any payment on a Senior Mortgage when the Loan
becomes due, to pay same, to pay real estate taxes, property insurance premiums
and the costs of Mortgaged Property repairs, with the amount so paid added to
the Mortgage indebtedness and secured by the Mortgage, and the right to call a
default under the Mortgage and accelerate the Mortgage indebtedness in the event
of a default under a Senior Mortgage, and (d) the right, subject to any
applicable federal restrictions, to call a default under the Mortgage and to
accelerate the Mortgage indebtedness in the event the Mortgaged Property or a
portion thereof is sold or transferred without the consent of the holder of the
Mortgage. There is no homestead or other exemption available to a Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage.

         (xxi) If 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 such Mortgage or in a properly recorded
substitution of trustee, and no fees or expenses, except as may be required by
local law, are or will become payable by the Buyer to the trustee under the deed
of trust, except in connection with a trustee's sale or attempted sale after
default by the Mortgagor.

         (xxii) The Mortgaged Property is located in the state identified in the
Mortgage Loan Schedule and is improved by a either a single family residential
dwelling (including a manufactured home) or a two, three or four family
residential dwelling, which is not a cooperative apartment or a mobile home. At
the date of origination, no portion of the Mortgaged Property was used for
commercial purposes. If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development),
such condominium or planned unit development project meets the Seller's
eligibility requirements as set forth in the Seller's underwriting guidelines.

<PAGE>

         (xxiii) The Mortgage Note bears a fixed annual interest rate. The
Mortgage Loans have an original term to maturity of not more than thirty (30)
years, with interest payable in arrears on a fixed day each month. Each Mortgage
Note requires a monthly payment which is sufficient to fully amortize the
original principal balance over the original term thereof and to pay interest at
the related mortgage interest rate. The Mortgage Loan is not a "negatively
amortizing loan." If the Mortgage Loan is a second lien mortgage loan, the
Seller underwrote the Mortgage Loan assuming that the related first lien
mortgage loan had fully negatively amortized if such related first mortgage loan
was a negatively amortizing loan. The Mortgage Loan does not contain "graduated
payment" features; to the extent any Mortgage Loan contains any buydown
provision, such buydown finds have been maintained and administered in
accordance with, and such Mortgage Loan otherwise complies with, Fannie Mae
requirements relating to buydown loans.

         (xxiv) The proceeds of the Mortgage Loan have been fully disbursed, and
there is no obligation on the part of the Mortgagee to make future advances
thereunder other than protective advances. Any and all requirements as to
completion of any on-site or off-site improvements and as to disbursement of any
escrow funds therefor have been complied with.

All costs, fees and expenses incurred in making, closing or recording the
Mortgage Loan have been paid. The Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or the Mortgage.

         (xxv) The Mortgage Loans are not insured by private mortgage insurance.

         (xxvi) Seller has not received any notification that the Mortgagor is
in bankruptcy.

         (xxvii) There is no obligation on the part of the Seller or any other
party to make payments on account of the Mortgage which are in addition to those
made by the Mortgagor.

         (xxviii) The Mortgage File contains an Appraisal on a form then
currently acceptable to FNMA and FHILMC setting forth the Appraised Value of the
Mortgaged Property at the time of origination of the Mortgage Loan. The
Appraisal was performed by an appraiser, approved by the Seller, 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, and the Appraisal and appraiser both satisfy
the requirements of Fannie Mae and Title XI of the Federal Institutions Reform,
Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated.

         (xxix) To the best of Seller's actual knowledge, all information
contained in the Mortgage File and each document and instrument comprising same
and all copies thereof are complete, accurate and correct in all material
respects.

         (xxx) The transfer, assignment and conveyance of the Mortgage Note and
Mortgage and related Mortgage File by the Seller pursuant to this Agreement are
not subject to the bulk transfer laws or any similar statutory provisions in
effect in any applicable jurisdiction.

         (xxxi) No instruments other than those delivered to Buyer are required
under applicable

<PAGE>

law to evidence the indebtedness represented by the Mortgage Loan or to perfect
the security interest in the Mortgaged Property.

         (xxxii) Seller has not made any agreement or reached any understanding
with any Mortgagor for any variation of the Note Rate, schedule of payments or
other terms and conditions of the Mortgage Loan not reflected in the Mortgage
Note.

         (xxxiii) Neither Seller nor any stockholder, director or officer of
Seller has received any benefit, consideration or value, other than the
increased business to Seller and its affiliated corporations represented by the
Mortgage Loan or a prepaid finance charge disclosed to the Mortgagor on the
Mortgage Loan or insurance commissions from time to time heretofore paid, from
any Mortgagor or anyone else in connection with the Mortgage Loan.

         (xxxiv) The governing laws with respect to the foreclosure of any
collateral securing such Mortgage Loans are the applicable provisions of the
laws of the state in which the collateral is located, or the laws of the United
States.

         (xxxv) With respect to Mortgage Loans secured by an interest in real
property, all persons who have or will have an ownership, homestead or dower
interest in the real property have signed the Mortgage relating to such property
if said signature is permitted.

         (xxxvi) The Mortgage and the assignment executed with respect thereto
are in recordable form and are acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located.

         (xxxvii) The Mortgagor has not notified the Seller and the Seller has
no actual knowledge of any relief requested or allowed to, the Mortgagor under
the Soldiers' and Sailors' Civil Relief Act of 1940.

         (xxxviii) All parties which have had any interest in the Mortgage,
whether as Mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state.

         (xxxix) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the funds were disbursed in connection with the Mortgage
Loan. The Mortgage Note is payable on the day of each month as set forth in the
Note and in equal monthly installments of principal and interest, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage Loan
fu'ny by the stated maturity date, over an original term of not more than thirty
years from commencement of amortization.

         (xl) Each Mortgage Loan constitutes a qualified Mortgage under Section
860G(a)(3)(A) of the Code and Treasury Regulations Section 1.8600-2(a)(l).

<PAGE>

         (xli) As of the date of origination of the Mortgage Loan, the Mortgaged
Property was lawfully occupied under applicable law, and, to the best of
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.

         (xlii) To the best of Seller's knowledge, there is no pending action or
proceeding directly involving the Mortgaged Property in which compliance with
any environmental law, rule or regulation is an issue; there is no violation of
any environmental law, rule or regulation with respect to the Mortgaged
Property; and nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property.

         (xliii) No Mortgage Loan was made in connection with the construction
or rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property.

         (xliv) No action has been taken or failed to be taken by the Seller, on
or prior to the Closing Date which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any primary mortgage insurance
policy (including, without limitation, any exclusions, denials or defenses which
would limit or reduce the availability of the timely payment of the full amount
of the loss otherwise due thereunder to the insured) whether arising out of
actions, representations, errors, omissions, negligence, or fraud of the Seller,
or for any other reason under such coverage.

         (xlv) Each Mortgage Loan has been serviced in all material respects in
compliance with Accepted Servicing Practices.

         (xlvi) With respect to any broker fees collected and paid on any of the
loans, all broker fees have been properly assessed to the borrower.

         (xlvii) The Mortgage Loan was originated by a Mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority.

         (xlviii) The Mortgage Loans are not "high cost" Mortgage Loans as
defined in 12 CFR ss.226.32 et seq.

<PAGE>

                            OLD KENT MORTGAGE COMPANY
                            -------------------------

         Section 8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.

                  Subsection 8.01 REPRESENTATIONS AND WARRANTIES RESPECTING THE
SELLER.

                  The Seller hereby represents and warrants to the Purchaser as
of the related Closing Date that:

                  (a) DUE ORGANIZATION AND AUTHORITY. The Seller is a __________
duly organized, validly existing and in good standing under the laws of [the
United States the state of its incorporation] and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in each state where a Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct business of
the type conducted by the Seller, and in any event the Seller is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan in accordance with the terms of this
Agreement; the Seller has the full corporate power and authority to execute and
deliver this Agreement and to perform in accordance herewith; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;

                  (b) ORDINARY COURSE OF BUSINESS. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;

                  (c) NO CONFLICTS. Neither the execution and delivery of this
Agreement, the acquisition of the Mortgage Loans by the Seller, the sale of the
Mortgage Loans to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Seller's charter or by-laws or any legal restriction or any
agreement or instrument to which the Seller is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or impair the
ability of the Purchaser to realize on the Mortgage Loans, or impair the value
of the Mortgage Loans;

                  (d) ABILITY TO PERFORM. The Seller does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent and the sale of the
Mortgage Loans will not cause the Seller to become insolvent.

<PAGE>

The sale of the Mortgage Loans is not undertaken with the intent to hinder,
delay or defraud any of the Seller's creditors. The Seller is an institution
whose accounts are insured by the FDIC;

                  (e) NO LITIGATION PENDING. There is no action, suit,
proceeding or investigation pending or threatened against the Seller which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Seller, or in any material impairment of the right or ability of
the Seller to carry on its business substantially as now conducted, or in any
material liability on the part of the Seller, or which would draw into question
the validity of this Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of the Seller contemplated
herein, or which would be likely to impair materially the ability of the Seller
to perform under the terms of this Agreement;

                  (f) NO CONSENT REQUIRED. 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 Mortgage Loans, the delivery of a portion of the
Mortgage Files to the Custodian or the sale of the Mortgage Loans to the
Purchaser or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the related
Closing Date;

                  (g) SELECTION PROCESS. The Mortgage Loans were not
intentionally selected in a manner so as to affect adversely the interests of
the Purchaser;

                  (h) NO UNTRUE INFORMATION. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue or misleading statement of fact or omits to state a fact
necessary to make the statements contained therein not misleading;

                  (i) SALE TREATMENT. The Seller has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;

                  (j) NO COMMISSIONS TO THIRD PARTIES. The Seller has not dealt
with any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Purchaser;

                  (k) FINANCIAL STATEMENTS. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal years and
any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent results of
operations and changes in financial position at the end of each such period of
the Seller and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as set forth in the notes thereto. In addition, the
Seller has delivered information as to its loan gain and loss experience for the
immediately preceding three-year period, in each case with respect to mortgage
loans owned by

<PAGE>

it and such mortgage loans serviced for others during such period, and all such
information so delivered is true and correct in all material respects. There has
been no change in the business, operations, financial condition, properties or
assets of the Seller since the date of the Seller's financial statements that
would have a material adverse effect on its ability to perform its obligations
under this Agreement. The Seller has completed any forms requested by the
Purchaser in a timely manner and in accordance with the provided instructions;

                  (l) FAIR CONSIDERATION. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;

                  (m) INSURED DEPOSITORY INSTITUTION REPRESENTATIONS. Seller is
an "insured depository institution" as that term is defined in Section
1813(c)(2) of Title 12 of the United States Code, as amended, and accordingly,
Seller makes the following additional representations and warranties:

                  (i) This Agreement between Purchaser and Seller conforms to
all applicable statutory and regulatory requirements; and

                  (ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Purchaser and Seller, (2) approved by a specific corporate
or banking association resolution by the Seller's board of directors, which
approval shall be reflected in the minutes of said board, and (3) an official
record of the Seller. A copy of such resolution, certified by a vice president
or higher officer of Seller has been provided to Purchaser;

                  (n) GOOD STANDING. Seller is an approved seller/servicer of
residential mortgage loans for Fannie Mae and Freddie Mac with such facilities,
procedures and personnel necessary for the sound servicing of such mortgage
loans. Seller is in good standing to sell mortgage loans to and service mortgage
loans for Fannie Mae and Freddie Mac and no event has occurred which would make
Seller unable to comply with eligibility requirements or which would require
notification to either Fannie Mae or Freddie Mac;

                  (o) POOL CHARACTERISTICS. The Pool Characteristics of the
Mortgage Loans delivered on the related Closing Date are as set forth in EXHIBIT
B to the Assignment and Conveyance, attached hereto; and

                  (p) ORIGINATION AND SERVICING. The origination and servicing
practices used by the Seller with respect to each Mortgage Note and Mortgage
originated or serviced by it have been legal and in accordance with applicable
laws and regulations, and in all material respects proper and prudent in the
mortgage origination and servicing business. With respect to escrow deposits and
payments that the Seller is entitled to collect, all such payments are in the
possession of, or under the control of, the Seller, 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 applicable state and federal law and the provisions of the
related Mortgage

<PAGE>

Note and Mortgage. As to any Mortgage Loan that is the subject of an escrow,
escrow of funds is not prohibited by applicable law and has been established in
an amount sufficient to pay for every escrowed item that remains unpaid and has
been assessed but is not yet due and payable. No escrow deposits or other
charges or payments due under the Mortgage Note have been capitalized under any
Mortgage or the related Mortgage Note.

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (q) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (r) PAYMENTS CURRENT. All payments required to be made up to
the related Cutoff Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (s) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (t) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage

<PAGE>

Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (u) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (v) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (w) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available

<PAGE>

for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (x) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (y) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four- family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (z) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                  (1) the lien of current real property taxes and assessments
         not yet due and payable;

                  (2) covenants, conditions and restrictions, rights of way,
         easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                  (3) other matters to which like properties are commonly
         subject which do not materially interfere with the benefits of the
         security intended to be provided by the Mortgage or the use, enjoyment,
         value or marketability of the related Mortgaged Property; and

                  (4) with respect to each Second Lien Mortgage a prior mortgage
         lien on the Mortgaged Property.

<PAGE>

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (aa) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (bb) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (cc) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (dd) DOING BUSINESS. All parties which have had any interest
in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and

<PAGE>

loan associations or national banks having principal offices in such state, or
(5) not doing business in such state;

                  (ee) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment, subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (ff) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (gg) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

<PAGE>

                  (hh) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (ii) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note adjusted semi-annually on each Interest Rate Adjustment
Date to equal the Index plus the Gross Margin, rounded up or down to the nearest
0.125%, subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the
Lifetime Mortgage Interest Rate Cap. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest
are subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan, 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, rounded up or down to the nearest 0.125%, subject to the Initial
Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage Interest Rate
Cap with respect to each Adjustable Rate Mortgage Loan;

                  (jj) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (kk) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (ll) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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

<PAGE>

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;

                  (mm) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and
has not been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage referred to in (j) above;

                  (nn) DEEDS OF TRUST. 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;

                  (oo) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (pp) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (qq) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (rr) DUE ON SALE. 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;

                  (ss) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (tt) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT Interests. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or

<PAGE>

partially paid with funds deposited in any separate account established by the
Seller, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other similar provisions
currently in effect which may constitute a "buydown" provision.
The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;

                  (uu) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (vv) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (ww) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (xx) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall

<PAGE>

have been made within ninety (90) days of the origination of the Loan, be
completed in compliance with the Uniform Standards of Professional Appraisal
Practice, any additional requirements set forth for appraisals in EXHIBIT 2
hereof, and all applicable Federal and state laws and regulations.

                  (yy) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (zz) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (aaa) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (bbb) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (ccc) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (ddd) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

                  (eee) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;
Each Mortgage Loan classified as a "high cost" loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 complies with all applicable rules
and regulations with respect to disclosures and other documentation;

<PAGE>

                  (fff) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (ggg) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (hhh) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (iii) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment

<PAGE>

fee feature, each such prepayment fee is enforceable and will be enforced by the
Seller, and each prepayment penalty is permitted pursuant to federal, state and
local law. Each such prepayment fee is in an amount equal to the maximum amount
permitted under applicable law;

                  (jjj) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (kkk) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser,

                  (lll) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a
CLTV in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;
and

                  (mmm) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage

                  (nnn) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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;

<PAGE>

                  (ooo) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage
Loan has an LTV equal to or less than ____%. Except for Mortgage Loans
underwritten in accordance with a Lender Paid Mortgage Insurance Policy Program,
if a Mortgage Loan has an LTV greater than 80%, the excess of the principal
balance of the Mortgage Loan over 75% of the Appraised Value, with respect to a
Refinanced Mortgage Loan, or the lesser of the Appraised Value or the purchase
price of the Mortgaged Property, with respect to a purchase money Mortgage Loan,
is and will be insured as to payment defaults by a Primary Mortgage Insurance
Policy issued by a Qualified Insurer. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for the
Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such
insurance premium.

                  Subsection 8.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND
WARRANTIES.

                  It is understood and agreed that the covenants,
representations and warranties of Seller set forth in this Agreement shall
survive the sale of the Mortgage Loans to the Purchaser and shall inure to the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination or
lack of examination of any Mortgage File. Upon discovery by either the Seller or
the Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the value
of a Mortgage Loan or the interests of the Purchaser in the related Mortgage
Loan in the case of a representation and warranty relating to a particular
Mortgage Loan), the party discovering such breach shall give prompt written
notice to the other.

                  Within sixty (60) days (or thirty (30) days with respect to a
breach of Subsection 8.02 (g), (pp), (qq), (uu) or (vv)) of the earlier of
either discovery by or notice to the Seller of any breach of a representation or
warranty which materially and adversely affects the value of a Mortgage Loan or
the Mortgage Loans, or the interest of the Purchaser therein, the Seller shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Seller shall, at the Purchaser's option
(other than with respect to Subsection 8.02 (uu) or (vv)) repurchase at the
Purchaser's option and not later than 90 days of its discovery or its receipt of
notice of such Breach such Mortgage Loan at the Repurchase Price. With respect
to Subsection 8.02 (uu) or (vv), the Seller shall notify the Purchaser as to any
Mortgage Loans for which it has not produced requisite tax service contract or
flood certification referenced in Subsection 8.02 and shall pay to the Purchaser
a fee for each such Mortgage Loan equal to the fee that is customarily charged
for each such contract or certification, as determined by the Purchaser in its
reasonable discretion. In the event that a breach shall involve any
representation or warranty set forth in Subsection 8.01 and such breach cannot
be cured within sixty (60) days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Repurchase Price. Any
repurchase of a Mortgage Loan or Mortgage Loans pursuant

<PAGE>

to the foregoing provisions of this Subsection 8.03 shall occur on a date
designated by the Purchaser and shall be accomplished by wire transfer of
immediately available funds on the repurchase date to an account designated by
the Purchaser.

                  At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the repurchased Mortgage Loan and the related
servicing rights to the Seller and the delivery to the Seller of any documents
held by the Purchaser or its designee relating to the repurchased Mortgage Loan.
Upon such repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.

                  If the Seller is required to repurchase any Mortgage Loan
pursuant to this Section 8.03, within two (2) years of the related Closing Date,
the Seller may, with the Purchaser's prior consent, which consent shall not be
unreasonably withheld, substitute another Mortgage Loan for such defective
Mortgage Loan, in lieu of repurchasing such defective Mortgage Loan. Any
substitute Mortgage Loan shall (a) have a principal balance at the time of
substitution not in excess of the principal balance of the defective Mortgage
Loan (the amount of any difference, plus one month's interest thereon at the
Mortgage Interest Rate borne by the defective Mortgage Loan, being paid by the
Seller and deemed to be a Principal Prepayment to be deposited by the Seller in
the Custodial Account), (b) have a Mortgage Interest Rate not less than, and not
more than one percentage point greater than, the Mortgage Interest Rate of the
removed Mortgage Loan, (c) have a remaining term to stated maturity not later
than, and not more than one year less than, the remaining term to stated
maturity of the removed Mortgage Loan, (d) be, in the reasonable determination
of the Purchaser, of the same type, quality and character (including location of
the Mortgaged Property) as the removed Mortgage Loan as if the Breach had not
occurred, (e) have a Loan-to-Value Ratio at origination no greater than that of
the removed Mortgage Loan and (f) be, in the reasonable determination of the
Purchaser, in material compliance with the representations and warranties
contained in this Agreement and described in Section 8.02 as of the date of
substitution.

                  The Seller shall amend the related Mortgage Loan Schedule to
reflect the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor. Upon such amendment, the
Purchaser or its designee shall review the Mortgage File delivered to it
relating to the substitute Mortgage Loan. In the event of such a substitution,
accrued interest on the substitute Mortgage Loan for the month in which the
substitution occurs and any Principal Prepayments made thereon during such month
shall be the property of the Purchaser and accrued interest for such month on
the Mortgage Loan for which the substitution is made and any Principal
Prepayments made thereon during such month shall be the property of the Seller.
The principal payment on a substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Seller and the principal
payment on the Mortgage Loan for which the substitution is made due on such date
shall be the property of the Purchaser.

                  In addition to such cure and repurchase obligation, the Seller
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of

<PAGE>

the representations and warranties contained in this Section 8. It is understood
and agreed that the obligations of the Seller set forth in this Subsection 8.03
to cure or repurchase a defective Mortgage Loan and to indemnify the Purchaser
as provided in this Subsection 8.03 and Subsection 13.01 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.

                  Any cause of action against the Seller relating to or arising
out of the breach of any representations and warranties made in Subsections 8.01
or 8.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach
by the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure
by the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement. In the event that any Mortgage Loan is
held by a REMIC, notwithstanding any contrary provision of this Agreement, with
respect to any Mortgage Loan that is not in default or as to which no default is
imminent, Purchaser may require the Seller to deliver at the Seller's expense an
Opinion of Counsel to the effect that such repurchase or substitution will not
(i) result in the imposition of taxes on "prohibited transactions" of such REMIC
(as defined in Section 860F of the Code) or otherwise subject the REMIC to tax,
or (ii) cause the REMIC to fail to qualify as a REMIC at any time.

                  Subsection 8.04 EARLY PAYMENT DEFAULT. In the event that,
within the first eighteen (18) months after the applicable Closing Date, three
(3) consecutive monthly payments which are due under any Mortgage Loan after the
applicable Cut-off Date are not made within 30 days of the date upon which such
payment was due (each an "EARLY PAYMENT DEFAULT MORTGAGE LOAN"), then upon five
(5) Business Days' notice to the Seller, the Seller shall immediately repurchase
each such Mortgage Loan from the Purchaser at the Repurchase Price, provided,
however, that the Seller shall not be obligated to repurchase such Mortgage
Loans pursuant to this Section 8.04 if such repurchase would result in the
repurchase pursuant to this Section 8.04 of more than 10% of the aggregate
outstanding principal balance of all Mortgage Loans sold to the Purchaser as of
such repurchase date.

                  Subsection 8.05 PREMIUM RECAPTURE. For Mortgage Loans that are
prepaid in whole or in part in the first year after the related Closing Date,
the Seller shall rebate the premium paid by the Purchaser according to the
following formula: the premium rebate (the "REIMBURSED PREMIUM") shall be equal
to (a) the total premium paid (Purchase Price less Stated Principal Balance as
of the related Closing Date (such amount, the "PREMIUM PAID")) times (b) a
fraction, the numerator of which is equal to the number of months remaining from
the date of prepayment in full until one year from the related Closing Date and
the denominator of which is 12.

                  Subsection 8.06 POST-CLOSING DUE DILIGENCE. From the related
Closing Date until 60 days after the related Closing Date, the Purchaser shall
have the right to review each Mortgage File, to conduct property inspections,
obtain appraisal recertifications and otherwise to underwrite the Mortgage Loans
and to reject any Mortgage Loan which in the Purchaser's sole opinion is an
unacceptable investment. In the event that the Purchaser so rejects any Mortgage
Loan, the Seller shall, no later than the 60th day following the related Closing
Date, repurchase the rejected

<PAGE>

Mortgage Loan in the manner prescribed in Section 3.03 at the Repurchase Price.
Any Rejected Loan shall be removed from the terms of this Agreement.

<PAGE>

                        GREENPOINT MORTGAGE FUNDING. INC.
                        ---------------------------------

                  Section 8. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH.

                  Subsection 8.01 REPRESENTATIONS AND WARRANTIES RESPECTING THE
SELLER.

                  The Seller hereby represents and warrants to the Purchaser as
of the related Closing Date that:

                  (a) DUE ORGANIZATION AND AUTHORITY. The Seller is a
____________ duly organized, validly existing and in good standing under the
laws of [the United States the state of its incorporation] and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state where a Mortgaged Property is
located if the laws of such state require licensing or qualification in order to
conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power and authority
to execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the Seller in
accordance with its terms;

                  (b) ORDINARY COURSE OF BUSINESS. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;

                  (c) NO CONFLICTS. Neither the execution and delivery of this
Agreement, the acquisition of the Mortgage Loans by the Seller, the sale of the
Mortgage Loans to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of the Seller's charter or by-laws or any legal restriction or any
agreement or instrument to which the Seller is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject, or impair the
ability of the Purchaser to realize on the Mortgage Loans, or impair the value
of the Mortgage Loans;

                  (d) ABILITY TO PERFORM. The Seller does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent and the sale of the
Mortgage Loans will not cause the Seller to become insolvent.

<PAGE>

The sale of the Mortgage Loans is not undertaken with the intent to hinder,
delay or defraud any of the Seller's creditors. The Seller is an institution
whose accounts are insured by the FDIC;

                  (e) NO LITIGATION PENDING. There is no action, suit,
proceeding or investigation pending or threatened against the Seller which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of the Seller, or in any material impairment of the right or ability of
the Seller to carry on its business substantially as now conducted, or in any
material liability on the part of the Seller, or which would draw into question
the validity of this Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of the Seller contemplated
herein, or which would be likely to impair materially the ability of the Seller
to perform under the terms of this Agreement;

                  (f) NO CONSENT REQUIRED. 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 Mortgage Loans, the delivery of a portion of the
Mortgage Files to the Custodian or the sale of the Mortgage Loans to the
Purchaser or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the related
Closing Date;

                  (g) SELECTION PROCESS. The Mortgage Loans were not
intentionally selected in a manner so as to affect adversely the interests of
the Purchaser;

                  (h) NO UNTRUE INFORMATION. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue or misleading statement of fact or omits to state a fact
necessary to make the statements contained therein not misleading;

                  (i) SALE TREATMENT. The Seller has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;

                  (j) NO COMMISSIONS TO THIRD PARTIES. The Seller has not dealt
with any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Purchaser;

                  (k) FINANCIAL STATEMENTS. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal years and
any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent results of
operations and changes in financial position at the end of each such period of
the Seller and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved, except as set forth in the notes thereto. In addition, the
Seller has delivered information as to its loan gain and loss experience for the
immediately preceding three-year period, in each case with respect to mortgage
loans owned by it and such mortgage loans serviced for others during such
period, and all such information so delivered is true and correct in all
material respects. There has been no change in the business,

<PAGE>

operations, financial condition, properties or assets of the Seller since the
date of the Seller's financial statements that would have a material adverse
effect on its ability to perform its obligations under this Agreement. The
Seller has completed any forms requested by the Purchaser in a timely manner and
in accordance with the provided instructions;

                  (l) FAIR CONSIDERATION. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;

                  (m) INSURED DEPOSITORY INSTITUTION REPRESENTATIONS. Seller is
an "insured depository institution" as that term is defined in Section
l813(c)(2) of Title 12 of the United States Code, as amended, and accordingly,
Seller makes the following additional representations and warranties:

                  (i) This Agreement between Purchaser and Seller conforms to
all applicable statutory and regulatory requirements; and

                  (ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Purchaser and Seller, (2) approved by a specific corporate
or banking association resolution by the Seller's board of directors, which
approval shall be reflected in the minutes of said board, and (3) an official
record of the Seller. A copy of such resolution, certified by a vice president
or higher officer of Seller has been provided to Purchaser;

                  (n) GOOD STANDING. Seller is an approved seller/servicer of
residential mortgage loans for Fannie Mae and Freddie Mac with such facilities,
procedures and personnel necessary for the sound servicing of such mortgage
loans. Seller is in good standing to sell mortgage loans to and service mortgage
loans for Fannie Mae and Freddie Mac and no event has occurred which would make
Seller unable to comply with eligibility requirements or which would require
notification to either Fannie Mae or Freddie Mac;

                  (o) POOL CHARACTERISTICS. The Pool Characteristics of the
Mortgage Loans delivered on the related Closing Date are as set forth in EXHIBIT
B to the Assignment and --------- Conveyance, attached hereto; and

                  (p) ORIGINATION AND SERVICING. The origination and servicing
practices used by the Seller with respect to each Mortgage Note and Mortgage
originated or serviced by it have been legal and in accordance with applicable
laws and regulations, and in all material respects proper and prudent in the
mortgage origination and servicing business. With respect to escrow deposits and
payments that the Seller is entitled to collect, all such payments are in the
possession of, or under the control of, the Seller, 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 applicable state and federal law and the provisions of the
related Mortgage Note and Mortgage. As to any Mortgage Loan that is the subject
of an escrow, escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every escrowed item that remains
unpaid and has been assessed but is not yet due and payable. No escrow

<PAGE>

deposits or other charges or payments due under the Mortgage Note have been
capitalized under any Mortgage or the related Mortgage Note.

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (q) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (r) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (s) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing have been paid, or an escrow
of finds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and payable.
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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (t) ORIGINAL TERMS UNMODIFIED. The tens of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

                  (u) NO DEFENSES. The Mortgage Loan is not subject to any right
of rescission, set- of counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the tens 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (v) HAZARD INSURANCE. Pursuant to the tens of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (w) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (x) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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

<PAGE>

effect any such release, cancellation, subordination or rescission. The Seller
has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;

                  (y) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (z) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other mailers of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the

<PAGE>

Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or
other security instrument creating a lien subordinate to the lien of the
Mortgage;

                  (aa) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (bb) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (cc) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has fill right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (dd) DOING BUSINESS. All parties which have had any interest
in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (ee) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal

<PAGE>

amount of the Mortgage Loan , and 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 Interest Rate and Monthly Payment,
subject only to the exceptions contained in and clauses (1), (2), and (3), and
with respect to each Second Lien Mortgage Loan clause (4) of paragraph (j) of
this Section 8. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the Mortgage,
including the Seller, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;

                  (ff) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (gg) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (hh) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (ii) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the

<PAGE>

Mortgage Note adjusted semi-annually on each Interest Rate Adjustment Date to
equal the Index plus the Gross Margin, rounded up or down to the nearest 0.125%,
subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime
Mortgage Interest Rate Cap. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest are
subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan, 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, rounded up or down to the nearest 0.125%, subject to the Initial
Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage Interest Rate
Cap with respect to each Adjustable Rate Mortgage Loan;

                  (jj) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (kk) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Sellers underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (ll) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (mm) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and
has not been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage referred to in (j) above;

                  (nn) DEEDS OF TRUST. 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;

<PAGE>

                  (oo) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (pp) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (qq) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (rr) DUE ON SALE. 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;

                  (ss) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (tt) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (uu) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

<PAGE>

                  (vv) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (ww) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of finds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (xx) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations.

                  (yy) Soldiers' and Sailors' Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (zz) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (aaa) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

<PAGE>

                  (bbb) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (ccc) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (ddd) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

                  (eee) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;
Each Mortgage Loan classified as a "high cost" loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 complies with all applicable rules
and regulations with respect to disclosures and other documentation;

                  (fff) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time ofthe origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

<PAGE>

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (ggg) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (hhh) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (iii) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

                  (jjj) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (kkk) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract tor each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (lll) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a
CLTV in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;
and

                  (mmm) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the

<PAGE>

Mortgage have been duly and properly executed by such parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place by the Seller or the Mortgagor, or, on the part of
any other party involved in the origination of the Mortgage Loan. Except to the
extent the Mortgage Loan is subject to completion escrows which have been
disclosed to and acknowledged by the Purchaser and which meet the requirements
of the Seller's Underwriting Standards, and as to which a completed Fannie Mae
form 442 has been delivered to the Purchaser within sixty (60) days after the
Closing Date, the proceeds of the Mortgage Loan have been fully disbursed and
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 the Mortgage Loan and the
recording of the Mortgage were paid or are in the process of being paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage

                  (nnn) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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;

                  (ooo) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage
Loan has an LTV equal to or less than ___%. Except for Mortgage Loans
underwritten in accordance with a Lender Paid Mortgage Insurance Policy Program,
if a Mortgage Loan has an LTV greater than 80%, the excess of the principal
balance of the Mortgage Loan over 75% of the Appraised Value, with respect to a
Refinanced Mortgage Loan, or the lesser of the Appraised Value or the purchase
price of the Mortgaged Property, with respect to a purchase money Mortgage Loan,
is and will be insured as to payment defaults by a Primary Mortgage Insurance
Policy issued by a Qualified Insurer. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for the
Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such
insurance premium.

                  Subsection 8.03 REMEDIES FOR BREACH OF REPRESENTATIONS AND
WARRANTIES. It is understood and agreed that the covenants, representations and
warranties of Seller set forth in this Agreement shall survive the sale of the
Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or lack of examination of any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser (or
which materially and adversely affects the value of a Mortgage Loan or the
interests of the Purchaser in the related Mortgage Loan in the case of a

<PAGE>

representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.

                  Within sixty (60) days (or thirty (30) days with respect to a
breach of Subsection 8.02 (g), (pp), (qq), (uu) or (vv)) of the earlier of
either discovery by or notice to the Seller of any breach of a representation or
warranty which materially and adversely affects the value of a Mortgage Loan or
the Mortgage Loans, or the interest of the Purchaser therein, the Seller shall
use its best efforts promptly to cure such breach in all material respects and,
if such breach cannot be cured, the Seller shall, at the Purchaser's option
(other than with respect to Subsection 8.02 (uu) or (vv)) repurchase at the
Purchaser's option and not later than 90 days of its discovery or its receipt of
notice of such Breach such Mortgage Loan at the Repurchase Price. With respect
to Subsection 8.02 (uu) or (vv), the Seller shall notify the Purchaser as to any
Mortgage Loans for which it has not produced requisite tax service contract or
flood certification referenced in Subsection 8.02 and shall pay to the Purchaser
a fee for each such Mortgage Loan equal to the fee that is customarily charged
for each such contract or certification, as determined by the Purchaser in its
reasonable discretion. In the event that a breach shall involve any
representation or warranty set forth in Subsection 8.01 and such breach cannot
be cured within sixty (60) days of the earlier of either discovery by or notice
to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Repurchase Price. Any
repurchase of a Mortgage Loan or Mortgage Loans pursuant to the foregoing
provisions of this Subsection 8.03 shall occur on a date designated by the
Purchaser and shall be accomplished by wire transfer of immediately available
funds on the repurchase date to an account designated by the Purchaser.

                  At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the repurchased Mortgage Loan and the related
servicing rights to the Seller and the delivery to the Seller of any documents
held by the Purchaser or its designee relating to the repurchased Mortgage Loan.
Upon such repurchase, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.

                  If the Seller is required to repurchase any Mortgage Loan
pursuant to this Section 8.03, within two (2) years of the related Closing Date,
the Seller may, with the Purchaser's prior consent, which consent shall not be
unreasonably withheld, substitute another Mortgage Loan for such defective
Mortgage Loan, in lieu of repurchasing such defective Mortgage Loan. Any
substitute Mortgage Loan shall (a) have a principal balance at the time of
substitution not in excess of the principal balance of the defective Mortgage
Loan (the amount of any difference, plus one month's interest thereon at the
Mortgage Interest Rate borne by the defective Mortgage Loan, being paid by the
Seller and deemed to be a Principal Prepayment to be deposited by the Seller in
the Custodial Account), (b) have a Mortgage Interest Rate not less than, and not
more than one percentage point greater than, the Mortgage Interest Rate of the
removed Mortgage Loan, (c) have a remaining term to stated maturity not later
than, and not more than one year less than, the remaining term to stated
maturity of the removed Mortgage Loan, (d) be, in the reasonable determination
of the Purchaser, of the same type, quality and character (including location of
the Mortgaged Property) as the removed Mortgage Loan as if the Breach had not
occurred, (e) have a Loan-to-Value Ratio at origination no greater than that of
the removed Mortgage Loan and (f) be, in the reasonable determination of the
Purchaser, in material compliance with the representations and warranties
contained in this Agreement and described in Section 8.02 as of the date of
substitution.

<PAGE>

                  The Seller shall amend the related Mortgage Loan Schedule to
reflect the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor. Upon such amendment, the
Purchaser or its designee shall review the Mortgage File delivered to it
relating to the substitute Mortgage Loan. In the event of such a substitution,
accrued interest on the substitute Mortgage Loan for the month in which the
substitution occurs and any Principal Prepayments made thereon during such month
shall be the property of the Purchaser and accrued interest for such month on
the Mortgage Loan for which the substitution is made and any Principal
Prepayments made thereon during such month shall be the property of the Seller.
The principal payment on a substitute Mortgage Loan due on the Due Date in the
month of substitution shall be the property of the Seller and the principal
payment on the Mortgage Loan for which the substitution is made due on such date
shall be the property of the Purchaser.

                  In addition to such cure and repurchase obligation, the Seller
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Section 8. It is understood
and agreed that the obligations of the Seller set forth in this Subsection 8.03
to cure or repurchase a defective Mortgage Loan and to indemnify the Purchaser
as provided in this Subsection 8.03 and Subsection 13.01 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.

                  Any cause of action against the Seller relating to or arising
out of the breach of any representations and warranties made in Subsections 8.01
or 8.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach
by the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure
by the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.

                  In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may require the Seller to deliver at the Seller's expense an Opinion
of Counsel to the effect that such repurchase or substitution will not (i)
result in the imposition of taxes on "prohibited transactions" of such REMIC (as
defined in Section 860F of the Code) or otherwise subject the REMIC to tax, or
(ii) cause the REMIC to fail to qualify as a REMIC at any time.

                  Subsection 8.04 EARLY PAYMENT DEFAULT. In the event that,
within the first eighteen (18) months after the applicable Closing Date, three
(3) consecutive monthly payments which are due under any Mortgage Loan after the
applicable Cut-off Date are not made within 30 days of the date upon which such
payment was due (each an "EARLY PAYMENT DEFAULT MORTGAGE LOAN"), then upon five
(5) Business Days' notice to the Seller, the Seller shall immediately repurchase
each such Mortgage Loan from the Purchaser at the Repurchase Price, provided,
however, that the Seller shall not be obligated to repurchase such Mortgage
Loans pursuant to this Section 8.04 if such repurchase would result in the
repurchase pursuant to this Section 8.04 of more

<PAGE>

than 10% of the aggregate outstanding principal balance of all Mortgage Loans
sold to the Purchaser as of such repurchase date.

                  Subsection 8.05 PREMIUM RECAPTURE. For Mortgage Loans that are
prepaid in whole or in part in the first year after the related Closing Date,
the Seller shall rebate the premium paid by the Purchaser according to the
following formula: the premium rebate (the "REIMBURSED PREMIUM") shall be equal
to (a) the total premium paid (Purchase Price less Stated Principal Balance as
of the related Closing Date (such amount, the "PREMIUM PAID")) times (b) a
fraction, the numerator of which is equal to the number of months remaining from
the date of prepayment in full until one year from the related Closing Date and
the denominator of which is 12.

                  Subsection 8.06 POST-CLOSING DUE DILIGENCE. From the related
Closing Date until 60 days after the related Closing Date, the Purchaser shall
have the right to review each Mortgage File, to conduct property inspections,
obtain appraisal recertifications and otherwise to underwrite the Mortgage Loans
and to reject any Mortgage Loan which in the Purchaser's sole opinion is an
unacceptable investment. In the event that the Purchaser so rejects any Mortgage
Loan, the Seller shall, no later than the 60th day following the related Closing
Date, repurchase the rejected Mortgage Loan in the manner prescribed in Section
3.03 at the Repurchase Price. Any Rejected Loan shall be removed from the terms
of this Agreement.

<PAGE>

                                STARNET MORTGAGE
                                ----------------

                  Section 3.02 REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL
MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser, as
to each Mortgage Loan, as of the Closing Date as follows:

<PAGE>

                  (a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes sent to the Purchaser, is
complete, true and correct in all material respects as of the Cut-off Date;

                  (b) With respect to a first lien Mortgage Loan that is not a
Co-op Loan, the Mortgage creates a first lien or a first priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a first lien Mortgage Loan that is a Co-op Loan,
the Mortgage creates a first lien or a first priority ownership interest in the
stock ownership and leasehold rights associated with the cooperative unit
securing the related Mortgage Note;

                  (c) With respect to a second lien Mortgage Loan that is not a
Co-op Loan, the Mortgage creates a second lien or a second priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a second lien Mortgage Loan that is a Co-op Loan,
the Mortgage creates a second lien or a second priority ownership interest in
the stock ownership and leasehold rights associated with the cooperative unit
securing the related Mortgage Note;

                  (d) All payments due on or prior to the Cut-off Date for such
Mortgage Loan have been made as of the Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and has not been dishonored; there are
no material defaults under the terms of the Mortgage Loan; the Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required by the
Mortgage Loan; and there has been no more than one delinquency during the
preceding twelve-month period, and such delinquency did not last more than 30
days;

                  (e) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

                  (f) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof except
in connection with an assumption agreement and which assumption agreement is
part of the Mortgage File and the terms of which are reflected in the Mortgage
Loan Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Mortgage Insurance Policy and
title insurance policy, to the extent required by the related policies;

<PAGE>

                  (g) The Mortgage Note and the Mortgage are not subject to any
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 the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto; and the Mortgagor was not a
debtor in any state or federal bankruptcy or insolvency proceeding at the time
the Mortgage Loan was originated;

                  (h) All buildings or other customarily insured improvements
upon the Mortgaged Property are insured by an insurer acceptable under the
Fannie Mae Guides, against loss by fire, hazards of extended coverage and such
other hazards as are provided for in the Fannie Mae Guides or by Freddie Mac, as
well as all additional requirements set forth in Section 4.10 of this Agreement.
All such standard hazard policies are in full force and effect and on the date
of origination contained a standard mortgagee clause naming the Seller and its
successors in interest and assigns as loss payee and such clause is still in
effect and all premiums due thereon have been paid. If required by the Flood
Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration which policy conforms to Fannie Mae and Freddie
Mac requirements, as well as all additional requirements set forth in Section
4.10 of this Agreement. Such policy was issued by an insurer acceptable under
Fannie Mae or Freddie Mac guidelines. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;

                  (i) 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 or
disclosure laws applicable to the Mortgage Loan have been complied with in all
material respects;

                  (j) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, 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 release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;

                  (k) With respect to any first lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property and, with respect to any second lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected second lien
on the Mortgaged Property, including for Mortgage Loans that are not Co- op
Loans, all buildings on the Mortgaged Property and all installations and
mechanical,

<PAGE>

electrical, plumbing, heating and air conditioning systems affixed to such
buildings, and all additions, alterations and replacements made at any time with
respect to the foregoing securing the Mortgage Note's original principal
balance. The Mortgage and the Mortgage Note do not contain any evidence of any
security interest or other interest or right thereto. Such lien is free and
clear of all adverse claims, liens and encumbrances having priority over the
first or second lien, as applicable, of the Mortgage subject only to (1) with
respect to any second lien Mortgage Loan, the related First Lien, (2) the lien
of non-delinquent current real property taxes and assessments not yet due and
payable, (3) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan, or (B) which do not adversely affect the appraised value of
the Mortgaged Property as set forth in such appraisal, and (4) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates (1) with
respect to any first lien Mortgage Loan, a valid, subsisting, enforceable and
perfected first lien and first priority security interest and (2) with respect
to any second lien Mortgage Loan, a valid, subsisting, enforceable and perfected
second lien and second priority security interest, in each case, on the property
described therein, and the Seller has the full right to sell and assign the same
to the Purchaser;

                  (1) The Mortgage Note and the related Mortgage are original
and genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the
Mortgage have been duly and properly executed by such parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of Seller or the Mortgagor, or, on the
part of any other party involved in the origination of the Mortgage Loan. The
proceeds of the Mortgage Loan have been fully disbursed and 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 the Mortgage Loan and the recording of the
Mortgage were paid or are in the process of being paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;

                  (m) The Seller or its affiliate is the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage
Note, and upon recordation the Purchaser or its designee will be the owner of
record of the Mortgage and the indebtedness evidenced by the Mortgage Note, and
upon the sale of the Mortgage Loan to the Purchaser, the

<PAGE>

Servicer will retain the Servicing File in trust for the Purchaser only for the
purpose of servicing and supervising the servicing of the Mortgage Loan.
Immediately prior to the transfer and assignment to the Purchaser on the Closing
Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, were not
subject to an assignment or pledge, and the Seller had good and marketable title
to and was the sole owner thereof and had 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 has the full right and authority
subject to no interest or participation of, or agreement with, any other party,
to sell and assign the Mortgage Loan pursuant to this Agreement and following
the sale of the Mortgage Loan, the Purchaser will own such Mortgage Loan free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest. The Seller intends to relinquish all rights
to possess, control and monitor the Mortgage Loan, except for the purposes of
servicing the Mortgage Loan as set forth in this Agreement;

                  (n) Each Mortgage Loan that is not a Co-op Loan is covered by
an ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to Fannie Mae or Freddie Mac, issued by a title
insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (j)(1), (2), (3) and (4) above) the Seller, its
successors and assigns, as to the first or second, as applicable, priority lien
of the Mortgage in the original principal amount of the Mortgage Loan. Where
required by applicable state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance. The
Seller, its successors and assigns, are the sole insureds of such lender's title
insurance policy, such title insurance policy has been duly and validly endorsed
to the Purchaser or the assignment to the Purchaser of the Seller's interest
therein does not require the consent of or notification to the insurer and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement and the related Purchase Price and Terms Letter. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;

                  (o) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Seller nor any prior mortgagee has
waived any default, breach, violation or event permitting acceleration. With
respect to each second lien Mortgage Loan, (i) the First Lien is in full force
and effect, (ii) there is no default, breach, violation or event of acceleration
existing under such prior mortgage or the related mortgage note, (iii) no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the prior mortgage contains a provision
which allows or (B) applicable law requires, the mortgagee under the second lien
Mortgage Loan to receive notice of, and

<PAGE>

affords such mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;

                  (p) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the related
Mortgage;

                  (q) All improvements subject to the Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit) and
no improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred to
in clause (m) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;

                  (r) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with all the terms, conditions and requirements of the
Seller's Underwriting Standards in effect at the time of origination of such
Mortgage Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on
forms generally acceptable to Fannie Mae or Freddie Mac. Seller is currently
selling loans to Fannie Mae and/or Freddie Mac which are the same document forms
as the Mortgage Notes and Mortgages (inclusive of any riders). The Mortgage Loan
bears interest at the Mortgage Interest Rate set forth in the Mortgage Loan
Schedule, and Monthly Payments under the Mortgage Note are due and payable on
the first day of each month. The Mortgage contains the usual and enforceable
provisions of the originator at the time of origination for the acceleration of
the payment of the unpaid principal amount of the Mortgage Loan if the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;

                  (s) The Mortgaged Property is not subject to any material
damage by waste, fire, earthquake, windstorm, flood or other casualty. At
origination of the Mortgage Loan there was, and there currently is, no
proceeding pending for the total or partial condemnation of the Mortgaged
Property. There have not been any condemnation proceedings with respect to the
Mortgaged Property and there are no such proceedings scheduled to commence at a
future date;

                  (t) The related Mortgage contains 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. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage;

                  (u) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be

<PAGE>

required by local law, are or will become payable by the Purchaser to the
trustee under the deed of trust, except in connection with a trustee's sale or
attempted sale after default by the Mortgagor;

                  (v) The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, 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, and the appraisal and appraiser both satisfy the requirements of Fannie
Mae or Freddie Mac and Title XI of FIRREA and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated. The
appraisal is in a form acceptable to Fannie Mae or Freddie Mac;

                  (w) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;

                  (x) The related Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

                  (y) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of such mortgage loans;

                  (z) The Mortgage Loan does not contain "graduated payment"
features; to the extent any Mortgage Loan contains any buydown provision, such
buydown funds have been maintained and administered in accordance with, and such
Mortgage Loan otherwise complies with, Fannie Mae/Freddie Mac requirements
relating to buydown loans;

                  (aa) The Mortgagor is not in bankruptcy and, the Mortgagor is
not insolvent or in bankruptcy and the Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor's credit standing that could reasonably be
expected to cause investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or materially
adversely affect the value or marketability of the Mortgage Loan;

                  (bb) The Mortgage Loans have an original term to maturity of
not more than 30 years, with interest payable in arrears on the first day of
each month. Each Mortgage Note requires a monthly payment which is sufficient to
fully amortize the original principal balance

<PAGE>

over the original term thereof and to pay interest at the related Mortgage
Interest Rate. No Mortgage Loan contains terms or provisions which would result
in negative amortization.

                  (cc) Except for Mortgage Loans underwritten in accordance with
the Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan over
75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or the
lesser of the Appraised Value or the purchase price of the Mortgaged Property,
with respect to a purchase money Mortgage Loan, is and will be insured as to
payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified
Insurer. All provisions of such Primary Mortgage Insurance Policy have been and
are being complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;

                  (dd) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (ee) As to Mortgage Loans that are not Co-op Loans and that
are not secured by an interest in a leasehold estate, the Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a townhouse, 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 de minimis planned unit development, provided, however,
that no residence or dwelling is a single parcel of real property with a
cooperative housing corporation erected thereon, or a mobile home. As of the
date of origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date or origination no portion of the
Mortgaged Property has been used for commercial purposes;

                  (ff) Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, 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;

                  (gg) Certain Mortgage Loans as specified on the Mortgage Loan
Schedule may contain a Prepayment Penalty in an amount specified in the related
Mortgage Note or Mortgage.

                  (hh) As of the date of origination of the Mortgage Loan, the
Mortgaged Property was lawfully occupied under applicable law, and all
inspections, licenses and

<PAGE>

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;

                  (ii) If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development), or
stock in a cooperative housing corporation, such condominium, cooperative or
planned unit development project meets the Seller's eligibility requirements as
set forth in Seller's underwriting guidelines;

                  (jj) There is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental law,
rule or regulation is an issue; there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to use and enjoyment of said property;

                  (kk) The Mortgagor has not notified the Seller, and the Seller
has no knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;

                  (ll) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property or facilitating the
trade-in or exchange of a Mortgaged Property;

                  (mm) No action has been taken or failed to be taken by the
Seller on or prior to the Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller, or for any other reason under such coverage;

                  (nn) Each Mortgage Loan has been serviced in all material
respects in compliance with Accepted Servicing Practices;

                  (oo) With respect to each Co-op Loan, the related Mortgage is
a valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance,

<PAGE>

assessments and other amounts owed to the related cooperative which individually
or in the aggregate will not have a material adverse effect on such Co-op Loan),
which have priority over the Seller's security interest in such cooperative
shares;

                  (pp) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to Fannie Mae and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;

                  (qq) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the Code,
and is in material compliance with applicable federal, state and local laws
which, if not complied with, could have a material adverse effect on the
Mortgaged Property;

                  (rr) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;

                  (ss) The Mortgage Loan was originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank,
a commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;

                  (tt) With respect to any ground lease to which a Mortgaged
Property may be subject: (i) a true, correct and complete copy of the ground
lease and all amendments, modifications and supplements thereto is included in
the Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all rent, additional rent and
other charges reserved therein have been fully paid to the extent payable as of
the Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of
the leasehold estate, subject to any sublease; (v) the Mortgagor is not in
default under any of the terms of such ground lease, and there are no
circumstances which, with the passage of time or the giving of notice, or both,
would result in a default under such ground lease; (vi) the lessor under such
ground lease is not in default under any of the terms or provisions of such
ground lease on the part of the lessor to be observed or performed; (vii) the
lessor under such ground lease has satisfied any repair or construction
obligations due as of the Closing Date pursuant to the terms of such ground
lease; (viii) the execution, delivery and performance of the Mortgage do not
require the consent (other than those consents which have been obtained and are
in full force and effect) under, and will not contravene any provision of or
cause a default under, such ground lease; (ix) the ground lease term extends, or
is automatically renewable, for at least five years beyond the maturity date of
the related Mortgage Loan; and (x) the Purchaser has the right to cure defaults
on the ground lease;

<PAGE>

                  (uu) With respect to any broker fees collected and paid on any
of the Mortgage Loans, all broker fees have been properly assessed to the
borrower and no claims will arise as to broker fees that are double charged and
for which the borrower would be entitled to reimbursement;

                  (vv) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Purchaser certifying that the original
Mortgage Note has been lost or destroyed and not been replaced, if such Mortgage
Loan is subsequently in default, the enforcement of such Mortgage Loan will not
be materially adversely affected by the absence of the original Mortgage Note;

                  (ww) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);

                  (xx) Except as provided in Section 2.07, the Mortgage Note,
the Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;

                  (yy) All information supplied by, on behalf of, or concerning
the Mortgagor is true, accurate and complete and does not contain any statement
that is or will be inaccurate or misleading in any material respect;

                  (zz) There does not exist on the related Mortgaged Property
any hazardous substances, hazardous wastes or solid wastes, as such terms are
defined in the Comprehensive Environmental Response Compensation and Liability
Act, the Resource Conservation and Recovery Act of 1976, or other federal, state
or local environmental legislation;

                  (aaa) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect to the making of adjustable rate mortgage loans. The Servicer
shall maintain such statement in the Servicing File;

                  (bbb) No second lien Mortgage Loan has an LTV in excess of
100%. No second lien Mortgage Loan has an Equity LTV in excess of 100%;

                  (ccc) Either (a) no consent for the second lien Mortgage Loan
is required by the holder of the related first lien or (b) such consent has been
obtained and is contained in the Mortgage File;

                  (ddd) With respect to any second lien Mortgage Loan, the
Seller has not received notice of: (1) any proceeding for the total or partial
condemnation of any Mortgaged Property, (2) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting any
Mortgaged Property or (3) or any default under any mortgage, lien or other
encumbrance senior to each Mortgage;

<PAGE>

                  (eee) With respect to any second lien Mortgage Loan, where
required or customary in the jurisdiction in which the Mortgaged Property is
located, the original lender has filed for record a request for notice of any
action by the senior lienholder under the related First Lien, and the original
lender has notified any senior lienholder in writing of the existence of the
second lien Mortgage Loan and requested notification of any action to be taken
against the Mortgagor by the senior lienholder;

                  (fff) No second lien Mortgage Loan is a "home equity line of
credit";

                  (ggg) No Mortgage Loan had a Loan-to-Value Ratio at the time
of origination of more than 100%;

                  (hhh) As of the Closing Date, the Seller has not received a
notice of default of a First Lien which has not been cured; and

                  (iii) No First Lien provides for negative amortization.

<PAGE>

                        NEW JERSEY MORTGAGE CAPITAL, INC
                        --------------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

<PAGE>

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae. If upon origination of the Mortgage Loan, the Mortgaged Property was
in an area identified in the Federal Register 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 Flood Insurance Administration is in effect
which policy conforms to the requirements of Fannie Mae. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such 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 an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is in full
force and effect, and will be in full force and effect and inure to the benefit
of the Purchaser upon the consummation of the transactions contemplated by this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's or any subservicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either, including,
without limitation, no unlawful fee,

<PAGE>

commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four- family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                  (1) the lien of current real property taxes and assessments
         not yet due and payable;

                  (2) covenants, conditions and restrictions, rights of way,
         easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

<PAGE>

                  (3) other matters to which like properties are commonly
         subject which do not materially interfere with the benefits of the
         security intended to be provided by the Mortgage or the use, enjoyment,
         value or marketability of the related Mortgaged Property; and

                  (4) with respect to each Second Lien Mortgage a prior mortgage
         lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full fight to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full fight to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security

<PAGE>

interest, and has full fight and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae, issued by a title insurer acceptable to
Fannie Mae and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, and 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 Interest Rate and Monthly Payment,
subject only to the exceptions contained in and clauses (1), (2), and (3), and
with respect to each Second Lien Mortgage Loan clause (4) of paragraph (j) of
this Section 8. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consurnmation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the Mortgage,
including the Seller, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the

<PAGE>

Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise under the prior
mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property Jay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate with respect to each Fixed Rate
Mortgage Loan is the fixed interest rate set forth in the Mortgage Note. The
Mortgage Interest Rate with respect to each Adjustable Rate Mortgage Loan is
adjusted semi-annually on each Interest Rate Adjustment Date to equal the Index
plus the Gross Margin, rounded up or down to the nearest 0.125%, subject to the
Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage
Interest Rate Cap. With respect to each Fixed Rate Mortgage Loan, the Mortgage
Note is payable in equal monthly installments of principal and interest, and,
with respect to each Adjustable Rate Mortgage Loan, which installments of
interest are subject to change due to adjustments to the Mortgage Interest Rate
on such Mortgage Loan, 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 each Fixed Rate Mortgage Loan or over an original term of not
more than forty years from commencement of amortization with respect to each
Adjustable Rate Mortgage Loan, rounded up or down to the nearest 0.125%, subject
to the Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime
Mortgage Interest Rate Cap; provided, however, in the case of a balloon Mortgage
Loan, the Mortgage Loan matures at leasi five (5) years after the first payment
date thereby requiring a final payment of the outstanding principal balance
prior to the full amortization of the Mortgage Loan;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the

<PAGE>

Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage
subject to applicable federal and state laws and judicial precedent with respect
to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae under one of its home mortgage
purchase programs (except that the principal balance of certain Mortgage Loans
may have exceeded the limits of Fannie Mae) and the Mortgage Note and Mortgage
are on forms acceptable to Fannie Mae;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties

<PAGE>

required by Fannie Mae with respect to such condominium or planned unit
development have been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT Interests. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision.
The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae. The consolidated principal amount
does not exceed the original principal amount of the Mortgage Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an

<PAGE>

amount sufficient to pay for every item which remains unpaid and which has been
assessed but is not yet due and payable. No escrow deposits or Escrow Payments
or other charges or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in strict compliance with state and federal law and the terms of the
related Mortgage Note. Any interest required to be paid pursuant to state and
local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations;

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

<PAGE>

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

                  (oo) RIEGLE ACT. Each Mortgage Loan classified as a "high
cost" loan under Section 32 of the Home Ownership and Equity Protection Act of
1994 complies with all applicable rules and regulations with respect to
disclosures and other documentation;

                  (pp) TEXAS HOME EGUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted Primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

<PAGE>

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee fights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is perinitted pursuant to
federal, state and local law. Except as otherwise set forth on the Mortgage Loan
Schedule, with respect to each Mortgage Loan that contains a Prepayment Penalty,
such Prepayment Penalty is at least equal to the lesser of (A) the maximum
amount permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan;

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV: EGUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
afier the Closing Date, the proceeds of the Mortgage Loan have, been fully
disbursed and there is no requirement for future advances thereunder, and any
and all requirements

<PAGE>

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 the Mortgage Loan and the recording of
the Mortgage were paid or are in the process of being paid, and the Mortgagor is
not entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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 each Fixed Rate
Mortgage Loan or an original term of not more than forty years from commencement
of amortization with respect to each Adjustable Rate Mortgage Loan; provided,
however, in the case of a balloon Mortgage Loan, the Mortgage Loan matures at
least five (5) years after the first payment date thereby requiring a final
payment of the outstanding principal balance prior to the full amortization of
the Mortgage Loan;

                  (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than 100%; and

                  (zz) SERVICING PRACTICES. Each Mortgage Loan has been serviced
in all material respects in compliance with those mortgage servicing practices
(including collection procedures) of prudent mortgage banking institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.

<PAGE>

                     NORWEST/WELLS FARGO HOME MORTGAGE, INC
                     --------------------------------------

Section 3.02 REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL MORTGAGE LOANS.

         As to each Mortgage Loan, the Company hereby represents and warrants to
the Purchaser that as of the Closing Date:

         (a)      MORTGAGE LOANS AS DESCRIBED.

                  The information set forth in the Mortgage Loan Schedule
                  attached hereto as Exhibit A and the information contained on
                  the electronic data file delivered to the Purchaser is true
                  and correct;

         (b)      PAYMENTS CURRENT.

                  All payments required to be made up to the Cut-off Date for
                  the Mortgage Loan under the terms of the Mortgage Note have
                  been made and credited, and any Mortgage Loan that is seasoned
                  two months or greater will not have been delinquent more than
                  once in the 12 months preceding the Closing Date, and such
                  delinquency was not for more than 30 days;

         (c)      NO OUTSTANDING CHARGES.

                  There are no defaults in complying with the terms of the
                  Mortgages, and all taxes, governmental assessments, insurance
                  premiums, leasehold payments, water, sewer and municipal
                  charges, which 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 which remains unpaid and
                  which has been assessed but is not yet due and

<PAGE>

                  payable. The Seller has not advanced funds, or induced, or
                  solicited directly or indirectly, the payment of any amount
                  required under the Mortgage Loan, except for interest accruing
                  from the date of the Mortgage Note or date of disbursement of
                  the Mortgage Loan proceeds, whichever is later, to the day
                  which precedes by one month the Due Date of the first
                  installment of principal and interest;

         (d)      ORIGINAL TERMS UNMODIFIED.

                  The terms of the Mortgage Note and Mortgage have not been
                  impaired, waived, altered or modified in any respect, except
                  by a written instrument which has been recorded, if necessary,
                  to protect the interests of the Purchaser and which has been
                  delivered to the Custodian. The substance of any such waiver,
                  alteration or modification has been approved by the issuer of
                  any related PMI policy and the title insurer, to the extent
                  required by the 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 issuer of any related PMI policy and
                  the title insurer, to the extent required by the policy, and
                  which assumption agreement is part of the Mortgage Loan File
                  delivered to the Custodian and the terms of which are
                  reflected in the Mortgage Loan Schedule;

         (e)      NO DEFENSES.

                  The Mortgage Loan is not subject to any 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
                  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, and no Mortgagor was a
                  debtor in any state or federal bankruptcy or insolvency
                  proceeding at the time the Mortgage Loan was originated;

         (f)      NO SATISFACTION OF MORTGAGE.

                  The Mortgage has not been satisfied, canceled, 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 release, cancellation, subordination or
                  rescission;

<PAGE>

         (g)      VALIDITY OF MORTGAGE DOCUMENT.

                  The Mortgage Note and the Mortgage and related documents are
                  genuine, and each is the legal, valid and binding obligation
                  of the maker thereof enforceable in accordance with its terms.
                  All parties to the Mortgage Note and the Mortgage had legal
                  capacity to enter into the Mortgage Loan and to execute and
                  deliver the Mortgage Note and the Mortgage, and the Mortgage
                  Note and the Mortgage have been duly and properly executed by
                  such parties;

         (h)      NO FRAUD.

                  No error, omission, misrepresentation, negligence, fraud or
                  similar occurrence with respect to a Mortgage Loan has taken
                  place on the part of the Company, or the Mortgagor, or to the
                  best of the Company's knowledge, any appraiser, any builder,
                  or any developer, or any other party involved in the
                  origination of the Mortgage Loan or in the application of any
                  insurance in relation to such Mortgage Loan;

         (i)      COMPLIANCE WITH APPLICABLE LAWS.

                  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 or disclosure laws applicable to the
                  Mortgage Loan have been complied with, and the Company shall
                  maintain in its possession, available for the Purchaser's
                  inspection, and shall deliver to the Purchaser upon demand,
                  evidence of compliance with all such requirements. 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;

         (j)      LOCATION AND TYPE OF MORTGAGED PROPERTY.

                  The Mortgaged Property is located in the state identified in
                  the Mortgage Loan Schedule and consists of a contiguous parcel
                  of real property with a detached 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 townhouse,
                  provided, however, that any condominium project or planned
                  unit development shall conform with the applicable FNMA
                  requirements regarding such dwellings, and that no residence
                  or dwelling is a mobile home or a cooperative unit. As of the
                  respective appraisal date for each Mortgaged Property, no
                  portion of the Mortgaged Property was being used for
                  commercial purposes;

<PAGE>

         (k)      VALID FIRST LIEN.

                  The Mortgage is a valid, subsisting and enforceable first lien
                  on the Mortgaged Property, including all buildings on the
                  Mortgaged Property and all installations and mechanical,
                  electrical, plumbing, heating and air conditioning systems
                  located in or annexed to such buildings, and all additions,
                  alterations and replacements made at any time with respect to
                  the foregoing. The lien of the Mortgage is subject only to:

                  (1)      the lien of current real property taxes and
                           assessments not yet due and payable;

                  (2)      covenants, conditions and restrictions, rights of
                           way, easements and other matters of the public record
                           as of the date of recording acceptable to mortgage
                           lending institutions generally and specifically
                           referred to in the lender's title insurance policy
                           delivered to the originator of the Mortgage Loan and
                           (i) referred to or otherwise considered in the
                           appraisal made for the originator of the Mortgage
                           Loan and (ii) which do not adversely affect the
                           Appraised Value of the Mortgaged Property set forth
                           in such appraisal; and

                  (3)      other matters to which like properties are commonly
                           subject which do not materially interfere with the
                           benefits of the security intended to be provided by
                           the mortgage or the use, enjoyment, value or
                           marketability of the related Mortgaged Property.

                  Any security agreement, chattel mortgage or equivalent
                  document related to and delivered in connection with the
                  Mortgage Loan establishes and creates a valid, subsisting and
                  enforceable first lien and first priority security interest on
                  the property described therein and the Company has full fight
                  to sell and assign the same to the
                  Purchaser;

         (1)      FULL DISBURSEMENT OF PROCEEDS.

                  The proceeds of the Mortgage Loan have been fully disbursed,
                  except for escrows established or created due to seasonal
                  weather conditions, and there is no requirement for future
                  advances thereunder. All costs, fees and expenses incurred in
                  making or closing the Mortgage Loan and the recording of the
                  Mortgage were paid, and the Mortgagor is not entitled to any
                  refund of any amounts paid or due under the Mortgage Note or
                  Mortgage;

         (m)      CONSOLIDATION OF FUTURE ADVANCES.

                  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

<PAGE>

                  reflected on the Mortgage Loan Schedule. The lien of the
                  Mortgage securing the consolidated principal amount is
                  expressly insured as having first lien priority by a title
                  insurance policy, an endorsement to the policy insuring the
                  mortgagee's consolidated interest or by other title evidence
                  acceptable to FNMA or FHLMC; the consolidated principal amount
                  does not exceed the original principal amount of the Mortgage
                  Loan; the Seller shall not make future advances after the
                  Cut-Off Date;

         (n)      OWNERSHIP.

                  The Company is the sole owner of record and holder of the
                  Mortgage Loan and the related Mortgage Note and the Mortgage
                  are not assigned or pledged, and the Company has good and
                  marketable title thereto and has full right and authority to
                  transfer and sell the Mortgage Loan to the Purchaser. The
                  Company is transferring the Mortgage Loan free and clear of
                  any and all encumbrances, liens, pledges, equities,
                  participation interests, claims, charges or security interests
                  of any nature encumbering such Mortgage Loan;

         (o)      ORIGINATION/DOING BUSINESS.

                  The Mortgage Loan was originated by a savings and loan
                  association, a savings bank, a commercial bank, a credit
                  union, an insurance company, or similar institution 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. All parties which have had any interest in the
                  Mortgage Loan, whether as mortgagee, assignee, pledgee or
                  otherwise, 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 laws of the
                  state wherein the Mortgaged Property is located, and (2)
                  organized under the laws of such state, or (3) qualified to do
                  business in such state, or (4) federal savings and loan
                  associations or national banks having principal offices in
                  such state, or (5) not doing business in such state;

         (p)      TITLE INSURANCE.

                  The Mortgage Loan is covered by an ALTA lender's title
                  insurance policy or other generally acceptable form of policy
                  of insurance acceptable to FNMA or FHLMC, issued by a title
                  insurer acceptable to FNMA or FBLMC and qualified to do
                  business in the jurisdiction where the Mortgaged Property is
                  located, insuring the Company, its successors and assigns, as
                  to the first priority lien of the Mortgage in the original
                  principal amount of the Mortgage Loan, subject only to the
                  exceptions contained in clauses (1), (2) and (3) of Paragraph
                  (k) of this Section 3.02, and against any loss by reason of
                  the invalidity or unenforceability of the lien resulting from
                  the provisions of the Mortgage providing for adjustment to the
                  Mortgage Interest Rate and Monthly Payment. The Company is the
                  sole insured of such lender's title insurance policy,

<PAGE>

                  and such lender's title insurance policy is in full force and
                  effect and will be in force and effect upon the consummation
                  of the transactions contemplated by this Agreement. No claims
                  have been made under such lender's title insurance policy, and
                  no prior holder of the Mortgage, including the Company, has
                  done, by act or omission, anything which would impair the
                  coverage of such lender's title insurance policy;

         (q)      NO DEFAULTS.

                  There is no 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 default, breach, violation or event of
                  acceleration, and neither the Company nor its predecessors
                  have waived any default, breach, violation or event of
                  acceleration;

         (r)      NO MECHANICS' LIENS.

                  There are no mechanics' or similar liens or claims which have
                  been filed for work, labor or material (and no rights are
                  outstanding that under the law could give rise to such liens)
                  affecting the related Mortgaged Property which are or may be
                  liens prior to, or equal or coordinate with, the lien of the
                  related Mortgage which are not insured against by the title
                  insurance policy referenced in Paragraph (q) above;

         (s)      LOCATION OF IMPROVEMENTS, NO ENCROACHMENTS.

                  Except as insured against by the title insurance policy
                  referenced in Paragraph (q) above, all improvements which were
                  considered in determining the Appraised Value of the Mortgaged
                  Property lay wholly within the boundaries and building
                  restriction lines of the Mortgaged Property and no
                  improvements on adjoining properties encroach upon the
                  Mortgaged Property. No improvement located on or being part of
                  the Mortgaged Property is in violation of any applicable
                  zoning law or regulation;

         (t)      PAYMENT TERMS.

                  The Mortgage Loans have an original term to maturity of not
                  more than 30 years, with interest payable in arrears on the
                  first day of each month. As to each adjustable rate Mortgage
                  Loan on each applicable Adjustment Date, the Mortgage Interest
                  Rate will be adjusted to equal the sum of the Index plus the
                  applicable Gross Margin, rounded up or down to the nearest
                  multiple of 0. 125% indicated by the Mortgage Note; provided
                  that the Mortgage Interest Rate will not increase or decrease
                  by more than the Periodic Interest Rate Cap on any Adjustment
                  Date, and will in no event exceed the maximum Mortgage
                  Interest Rate or be lower than the minimum Mortgage Interest
                  Rate listed on the Mortgage Loan Schedule for such Mortgage
                  Loan. Each Mortgage Note requires a monthly payment which is
                  sufficient, during

<PAGE>

                  the period prior to the first adjustment to the Mortgage
                  Interest Rate (as applicable), to fully amortize the
                  outstanding principal balance as of the first day of such
                  period over the then remaining term of such Mortgage Note and
                  to pay interest at the related Mortgage Interest Rate. As to
                  each adjustable rate Mortgage Loan, if the related Mortgage
                  Interest Rate changes on an Adjustment Date, the then
                  outstanding principal balance will be reamortized over the
                  remaining life of such Mortgage Loan.
                  No Mortgage Loan contains terms or provisions which would
                  result in negative amortization or which permits the Mortgagor
                  to pay less than the related Monthly Payment;

         (u)      CUSTOMARY PROVISIONS.

                  The Mortgage and related Mortgage Note contain customary and
                  enforceable provisions such as to render the fights and
                  remedies of the holder thereof adequate for the realization
                  against the Mortgaged Property of the benefits of the security
                  provided thereby, including, (i) in the case of a Mortgage
                  designated as a deed of trust, by trustee's sale, and (ii)
                  otherwise by judicial foreclosure. There is no homestead or
                  other exemption available to a Mortgagor which would interfere
                  with the right to sell the Mortgaged Property at a trustee's
                  sale or the fight to foreclose the Mortgage;

         (v)      OCCUPANCY OF THE MORTGAGED PROPERTY.

                  As of the date of origination, the Mortgaged Property was
                  lawfully occupied under applicable law. 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 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;

         (w)      NO ADDITIONAL COLLATERAL.

                  The Mortgage Note is not and has not been secured by any
                  collateral, pledged account or other security except the lien
                  of the corresponding Mortgage and the security interest of any
                  applicable security agreement or chattel mortgage referred to
                  in (k) above;

         (x)      DEEDS OF TRUST.

                  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 Mortgagee to the trustee under the deed
                  of trust, except in connection with a trustee's sale after
                  default by the Mortgagor;

<PAGE>

         (y)      TRANSFER OF MORTGAGE LOANS.

                  The Assignment upon the insertion of the name of the assignee
                  and recording information is in recordable form and is
                  acceptable for recording under the laws of the jurisdiction in
                  which the Mortgaged Property is located;

         (z)      MORTGAGED PROPERTY UNDAMAGED.

                  The Mortgaged Property is undamaged by waste, fire, earthquake
                  or earth movement, windstorm, flood, tornado or other casualty
                  so as to affect adversely the value of the Mortgaged Property
                  as security for the Mortgage Loan or the use for which the
                  premises were intended;

         (aa)     COLLECTION PRACTICES; ESCROW DEPOSITS.

                  The origination, servicing and collection practices used with
                  respect to the Mortgage Loan have been in accordance with
                  Accepted Servicing Practices, and have been in all material
                  respects legal and proper. With respect to escrow deposits and
                  Escrow Payments, all such payments are in the possession of
                  the Company 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. No
                  escrow deposits or Escrow Payments or other charges or
                  payments due the Company have been capitalized under the
                  Mortgage Note;

         (bb)     NO CONDEMNATION.

                  There is no proceeding pending or to the best of the Company's
                  knowledge threatened for the total or partial condemnation of
                  the related Mortgaged Property;

         (cc)     THE APPRAISAL.

                  The Mortgage Loan Documents contain an appraisal of the
                  related Mortgaged Property by an appraiser who is licensed in
                  the state where the Mortgaged Property is located and 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, and the appraisal and the appraiser both
                  satisfy the applicable requirements of Title XI of the
                  Financial Institution Reform, Recovery, and Enforcement Act of
                  1989 and the regulations promulgated thereunder, all as in
                  effect on the date the Mortgage Loan was originated. The
                  appraisal shall have been made within 120 days of the
                  origination of the Mortgage Loan and have been completed in
                  compliance with the Uniform Standards of Professional
                  Appraisal Practice;

<PAGE>

         (dd)     INSURANCE.

                  The Mortgaged Property securing each Mortgage Loan is insured
                  by an insurer acceptable to FNMA or FHLMC against loss by fire
                  and such hazards (including flood, if applicable) as are
                  covered under a standard extended coverage endorsement and
                  such other hazards as are customary in the area where the
                  Mortgaged Property is located pursuant to insurance policies
                  conforming to the requirements of Section 4.10, in an amount
                  which is not less than the lesser of 100% of the insurable
                  value of the Mortgaged Property and the outstanding principal
                  balance of the Mortgage Loan, but in no event less than the
                  minimum amount necessary to fully compensate for any damage or
                  loss on a replacement cost basis. If the Mortgaged Property is
                  a condominium unit, it is included under the coverage afforded
                  by a blanket policy for the project. If the improvements on
                  the Mortgaged Property are in an area identified in the
                  Federal Register by the Federal Emergency Management Agency as
                  having special flood hazards, a flood insurance policy meeting
                  the requirements of the current guidelines of the Federal
                  Insurance Administration is in effect with a generally
                  acceptable insurance carrier, in an amount representing
                  coverage not less than the least of (A) the outstanding
                  principal balance of the Mortgage Loan, (B) the full insurable
                  value and (C) the maximum amount of insurance which was
                  available under the Flood Disaster Protection Act of 1973, as
                  amended. All individual insurance policies contain a standard
                  mortgagee clause naming the Company and its successors and
                  assigns as mortgagee, and all premiums thereon have been paid.
                  The Mortgage obligates the Mortgagor thereunder to maintain a
                  hazard and flood (if applicable) insurance policy at the
                  Mortgagor's cost and expense, and on the Mortgagor's failure
                  to do so, authorizes the holder of the Mortgage to obtain and
                  maintain such insurance at such Mortgagor's cost and expense,
                  and to seek reimbursement therefor from the Mortgagor. The
                  hazard and flood (if applicable) insurance policy is the valid
                  and binding obligation of the insurer, is in full force and
                  effect, and will be in full force and effect and inure to the
                  benefit of the Purchaser upon the consummation of the
                  transactions contemplated by this Agreement. The Company has
                  not acted or failed to act so as to impair the coverage of any
                  such insurance policy or the validity, binding effect and
                  enforceability thereof,

         (ee)     SOLDIERS' AND SAILORS' CIVIL RELIEF ACT.

                  The Mortgagor has not notified the Company, and the Company
                  has no knowledge of any relief requested or allowed to the
                  Mortgagor under the Soldiers' and
                  Sailors'
                  Civil Relief Act of 1940, as amended;

         (ff)     NO GRADUATED PAYMENTS OR CONTINGENT INTERESTS.

                  The Mortgage Loan is not a graduated payment mortgage loan and
                  the Mortgage Loan does not have a shared appreciation or other
                  contingent interest feature;

<PAGE>

         (gg)     NO CONSTRUCTION LOANS.

                  No Mortgage Loan was made in connection with (i) the
                  construction or rehabilitation of a Mortgage Property or (ii)
                  facilitating the trade-in or exchange of a Mortgaged Property
                  other than a construction-to-permanent loan which has
                  converted to a permanent Mortgage Loan; and

         (hh)     UNDERWRITING.

                  Each Mortgage Loan was underwritten in accordance with the
                  underwriting guidelines of the Company; and the Mortgage Note
                  and Mortgage are on forms acceptable to FHLMC or FNMA.

         (ii)     DUE ON SALE. To the extent permitted 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 Mortgage Property is
                  sold or transferred without the prior written consent of the
                  Mortgagee thereunder;

         (jj)     NO VIOLATION OF ENVIRONMENTAL LAWS. There is no pending action
                  or proceeding directly involving any Mortgaged Property of
                  which the Company is aware in which compliance with any
                  environmental law, rule or regulation is an issue; and to the
                  best of the Company's knowledge, nothing further remains to be
                  done to satisfy in full all requirements of each such law,
                  rule or regulation constituting a prerequisite to use and
                  enjoyment of said property;

         (kk)     SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage Loans are
                  simple interest Mortgage Loans;

         (ll)     PREPAYMENT FEE. With respect to each Mortgage Loan that has a
                  prepayment fee feature, each such prepayment fee is
                  enforceable and will be enforced by the Company pursuant to
                  the terms of the Mortgage Note, and each prepayment penalty is
                  permitted pursuant to federal, state and local law;

         (mm)     HIGH COST LOANS. No Mortgage Loan is subject to the
                  Homeownership and Equity Protection Act of 1994 ("High Cost
                  Mortgage Act"), (Section 103(aa) of the Truth in Lending Act,
                  as amended, and Section 226.32 of Regulation Z, as amended) or
                  any similar state statues or regulations related to high cost
                  mortgage loans or predatory lending (as such terms are defined
                  in the applicable statute or regulation);

         (nn)     LEASEHOLD MORTGAGES. With respect to any ground lease to which
                  a Mortgaged Property may be subject: (i) the Mortgagor is the
                  owner of a valid and subsisting leasehold interest under such
                  ground lease; (ii) such ground lease is in full force and
                  effect, unmodified and not supplemented by any writing or
                  otherwise; (iii) all rent, additional rent and other charges
                  reserved therein have been fully paid to the extent

<PAGE>

                  payable as of the Closing Date; (iv) the Mortgagor is not in
                  default under any of the terms of such ground lease, (v) there
                  are no circumstances which, with the passage of time or the
                  giving of notice, or both, would result in a default under
                  such ground lease; and (vi) the execution, delivery and
                  performance of the Mortgage do not require the consent (other
                  than those consents which have been obtained and are in full
                  force and effect) under, and will not contravene any provision
                  of or cause a default under, such ground lease; and

         (oo)     LATE FEES. Each Mortgage Note provides for a late charge based
                  upon a percent of the outstanding payment due as permitted by
                  the state where the Mortgage Loan was originated.

<PAGE>

                            PINNACLE FINANCIAL CORP.
                            ------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b PAYMENTS CURRENT. All payments required to be made up to
the related Cut- off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan

<PAGE>

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

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this

<PAGE>

Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor's or any subservicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for herein, or the validity and binding effect of either, including,
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. Any and all requirements
of any federal, state or local law including, without limitation, usury,
trutb-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (1) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four- family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID [FIRST OR SECOND] LIEN. The Mortgage is a valid,
subsisting enforceable and perfected [first or second] lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending

<PAGE>

         institutions generally and specifically referred to in the lender's
         title insurance policy delivered to the originator of the Mortgage Loan
         and (i) referred to or to otherwise considered in the appraisal made
         for the originator of the Mortgage Loan or (ii) which do not adversely
         affect the appraised value of the Mortgaged Property set forth in such
         appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (1) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

<PAGE>

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the [first or second) priority lien of the
Mortgage in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment] subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which,

<PAGE>

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
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note adjusted /semi-annually on each Interest Rate Adjustment
Date to equal the Index plus the Gross Margin, rounded up or down to the nearest
0.125%, subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the
Lifetime Mortgage Interest Rate Cap. The Mortgage Note is payable in equal
monthly installments of principal and interest, which installments of interest
are subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan, 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, rounded up or down to the nearest 0.125%, subject to the Initial
Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage Interest Rate
Cap with respect to each Adjustable Rate Mortgage Loan;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

<PAGE>

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

<PAGE>

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT Interests. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second] lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee's consolidated interest or
by other title evidence acceptable to Fannie Mae and Freddie Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS[; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS]. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest

<PAGE>

Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations.

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (nn) [MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with

<PAGE>

respect to the making of adjustable rate mortgage loans. The Seller shall
maintain such statement in the Mortgage File;]

                  (oo) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of
1994;][Each Mortgage Loan classified as a "high cost" loan under Section 32 of
the Home Ownership and Equity Protection Act of 1994 complies with all
applicable rules and regulations with respect to disclosures and other
documentation;

                  (pp) TEXAS HOME EQUITY LOAN. With respect to any Loan which is
a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI of
the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for
each such Mortgage Loan.]

<PAGE>

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

                  (tt) TAX SERVICE The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid,

<PAGE>

and the Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage;

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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;

                  (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than ____%. Except for Mortgage Loans underwritten
in accordance with a Lender Paid Mortgage Insurance Policy Program, if a
Mortgage Loan has an LTV greater than 80%, the excess of the principal balance
of the Mortgage Loan over 75% of the Appraised Value, with respect to a
Refinanced Mortgage Loan, or the lesser of the Appraised Value or the purchase
price of the Mortgaged Property, with respect to a purchase money Mortgage Loan,
is and will be insured as to payment defaults by a Primary Mortgage Insurance
Policy issued by a Qualified Insurer. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The mortgage interest rate for the
Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such
insurance premium.

<PAGE>

                            ONCALL/CROSSLAND MORTGAGE
                            -------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on its Due Date or within 30 days after its Due Date, all in accordance
with the terms of the related Mortgage Note (or pursuant to such alternate terms
as set forth in the applicable Terms Letter);

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the title insurer, to the extent required by the policy, and its terms are
reflected on the Mortgage Loan Schedule. No Mortgagor has been released, in
whole or in part, except in connection

<PAGE>

with an assumption agreement approved by the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac in an amount not less than the greatest of (i) 100%
of the replacement cost of all improvements to the Mortgaged Property, (ii) the
outstanding principal balance of the Mortgage Loan, or (iii) the amount
necessary to avoid the operation of any co- insurance provisions with respect to
the Mortgaged Property, and consistent with the amount that would have been
required as of the date of origination in accordance with the required by Fannie
Mae and Freddie Mac. If upon origination of the Mortgage Loan, the Mortgaged
Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

<PAGE>

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single contiguous plot of real property
with a detached single family residence erected thereon, or a two- to fourfamily
dwelling, or an individual residential condominium unit, or an individual unit
in a planned unit development, provided, however, that no residence or dwelling
is (i) a mobile home or (ii) a manufactured dwelling unless such manufactured
dwelling is (x) permanently affixed to the Mortgaged Property, and (y)
considered real estate under applicable local law. No portion of the Mortgaged
Property is used for commercial in a manner which adversely affects the
marketability to the Mortgaged Property. No Mortgage Property is used for
agricultural purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the

<PAGE>

         Mortgage or the use, enjoyment, value or marketability of the related
         Mortgaged Property; and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. The documents, instruments and agreements submitted
for loan underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading. No
fraud, error, negligence, misrepresentation or omission of fact with respect to
a Mortgage Loan has taken place on the part of the Seller or the Mortgagor or
any other party involved in the origination or servicing of the Mortgage Loan.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

<PAGE>

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment, subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

<PAGE>

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS, NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is (a) with respect to fixed rate
mortgage loans, the fixed interest rate set forth in the Mortgage Note or (b)
with respect to adjustable rate mortgage loans, adjusted semiannually on each
Interest Rate Adjustment Date to equal the Index plus the Gross Margin, rounded
up or down to the nearest 0.125%, subject to the Periodic Rate Cap and the
Lifetime Rate Cap. Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. No Mortgage Loan contains terms or provisions which would result
in negative amortization. Except with respect to Mortgage Loans which are
identified on the Mortgage Loan Schedule as balloon loans, the Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest are subject to change due to adjustments to the
Mortgage Interest Rate on each, 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;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Note and
Mortgage are on forms acceptable to Fannie Mae or Freddie
Mac;

<PAGE>

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

                  (y) ACCEPTABLE INVESTMENT. The Mortgagor is not in bankruptcy
or insolvent and, other than any information disclosed by the Seller to the
Purchaser, the Seller has no knowledge of any other circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

<PAGE>

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT Interests. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

<PAGE>

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a appraiser qualified under Fannie Mae and Freddie Mac guidelines
who (i) is licensed in the state where the Mortgaged Property is located, (ii)
has no interest, direct or indirect, in the Mortgaged Property or in any Loan or
the security therefor, and (iii) does not receive compensation that is affected
by the approval or disapproval of the Loan. The appraisal shall have been made
within six months of the origination of the Loan (provided that if the appraisal
was made more than four months before the origination of the Loan, the Seller
shall have delivered to the Purchaser a recertification of the appraisal), be
completed in compliance with the Uniform Standards of Professional Appraisal
Practice, any additional requirements set forth for appraisals in EXHIBIT 2
hereof, and all applicable Federal and state laws and regulations.

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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
insurance policy required under this Agreement, 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 the Seller or any designee of the Seller or any corporation in which
the Seller or any officer, director, or employee had a financial interest at the
time of placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons;

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of Adjustable Rate
Mortgage Loans. The Seller shall maintain such statement in the Mortgage File;

<PAGE>

                  (oo) RIEGLE ACT. Each Mortgage Loan classified as a "high
cost" loan under Section 32 of the Home Ownership and Equity Protection Act of
1994 complies with all applicable rules and regulations with respect to
disclosures and other documentation;

                  (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

<PAGE>

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a Prepayment Fee feature, such Prepayment Fee is enforceable and, prior to
the Servicing Transfer Date, will be enforced by the Seller for the benefit of
DLJ, and each Prepayment Fee is permitted pursuant to federal, state and local
law. Each such Prepayment Fee is in an amount equal to that set forth on EXHIBIT
15 hereof,

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File.

<PAGE>

                                    LIFE BANK
                                    ---------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. As of the related Cut-Off Date, payment
required under the Mortgage Loan is 30 days or more delinquent nor has any
payment under the Mortgage Loan been delinquent for more than 30 days more than
once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released

<PAGE>

from the lien of the Mortgage, in whole or in part, nor has any instrument been
executed that would effect any such release, cancellation, subordination or
rescission. The Seller has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling or an individual condominium unit in a low-rise condominium project, or
an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home. No portion of the Mortgaged Property is used for
commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. Other than as disclosed on the
Mortgage Loan Schedule, the Mortgaged

<PAGE>

Property was not, as of the date of origination of the Mortgage Loan, subject to
a mortgage, deed of trust, deed to secure debt or other security instrument
creating a lien subordinate to the lien of the Mortgage;

                           (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note
and the Mortgage are genuine, and each is the legal, valid and binding
obligation of the maker thereof enforceable in accordance with its terms. All
parties to the Mortgage Note and the Mortgage and any other related agreement
had legal capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note and the Mortgage and any other related agreement, and the
Mortgage Note and the Mortgage and any other related agreement have been duly
and properly executed by such parties. No statement, tape, diskette, form,
report or other document prepared by, or on behalf of, the Seller pursuant to
this Agreement in connection with the transactions contemplated hereby, contains
or will contain any statement that is or will be inaccurate or misleading in any
material respect, and all information supplied by, on behalf of, or concerning
the Mortgagor is true, accurate and complete and does not contain any statement
that is or will be inaccurate or misleading in any material respect. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                           (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan
has been closed and the proceeds of the Mortgage Loan have been fully disbursed
and there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;

                           (m) OWNERSHIP. The Seller is the sole owner of record
and holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged,
and the Seller has good and marketable title thereto, and has full right to
transfer and sell the Mortgage Loan therein to the Purchaser free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                           (n) DOING BUSINESS. All parties which have had any
interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, 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 laws of the state wherein the Mortgaged Property is located,
and (2) organized under the laws of such state, or (3) qualified to do business
in such state, or (4) federal savings and loan associations or national banks
having principal offices in such state, or (5) not doing business in such state;

                           (o) TITLE INSURANCE. The Mortgage Loan is covered by
an ALTA lender's title insurance policy or other generally acceptable form of
policy of insurance acceptable to Fannie Mae or Freddie Mac, issued by a title
insurer acceptable to Fannie Mae or Freddie Mac and qualified

<PAGE>

to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the [first or second]
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan, and 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 Interest Rate and Monthly Payment,] subject only to the
exceptions contained in and clauses (1), (2), and (3), and with respect to each
Second Lien Mortgage Loan clause (4) of paragraph (j) of this Section 8. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The Seller is the sole insured of such lender's title
insurance policy, and such lender's title insurance policy is in full force and
effect and will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the Mortgage, including the
Seller, has done, by act or omission, anything which would impair the coverage
of such lender's title insurance policy including without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                           (p) NO DEFAULTS. There is no 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 default, breach,
violation or event of acceleration, and neither the Seller nor its predecessors
have waived any default, breach, violation or event of acceleration. With
respect to each Second Lien Mortgage Loan, (i) the prior mortgage is in full
force and effect, (ii) there is no default, breach, violation or event of
acceleration existing under such prior mortgage or the related mortgage note,
(iii) no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event of acceleration thereunder, and either (A) the prior mortgage contains a
provision which allows or (B) applicable law requires, the mortgagee under the
Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise under the prior
mortgage;

                           (q) NO MECHANICS' LIENS. There are no mechanics' or
similar liens or claims which have been filed for work, labor or material (and
no rights are outstanding that under the law could give rise to such liens)
affecting the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage;

                           (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                           (s) ORIGINATION: PAYMENT TERMS. At the time the
Mortgage Loan was originated, the originator was a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act or a savings and loan

<PAGE>

association, a savings bank, a commercial bank or similar banking institution
which is supervised and examined by a Federal or State authority. The Mortgage
Interest Rate is the fixed interest rate set forth in the Mortgage Note
adjusted/semi-annually on each Interest Rate Adjustment Date to equal the Index
plus the Gross Margin, rounded up or down to the nearest 0.125%, subject to the
Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage
Interest Rate Cap. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest are subject to change due
to adjustments to the Mortgage Interest Rate on each Adjustable Rate Mortgage
Loan, 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, rounded up or down
to the nearest 0.125%, subject to the Initial Periodic Rate Cap, the Periodic
Rate Cap and the Lifetime Mortgage Interest Rate Cap with respect to each
Adjustable Rate Mortgage Loan;

                           (t) CUSTOMARY PROVISIONS. The Mortgage contains
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, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and (ii)
otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage
Loan and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant
to the proper procedures, the holder of the Mortgage Loan will be able to
deliver good and merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption;

                           (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The
Mortgage Loan was underwritten in accordance with the Seller's underwriting
guidelines in effect at the time the Mortgage Loan was originated, a copy of
which underwriting guidelines are attached as EXHIBIT 8 --------- hereto. The
Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or Freddie Mac;

                           (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The
Mortgaged Property is lawfully occupied under applicable law. 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;

                           (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is
not and has not been secured by any collateral except the lien of the
corresponding Mortgage and the security interest of any applicable security
agreement or chattel mortgage referred to in (j) above;

                           (x) DEEDS OF TRUST. 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;

<PAGE>

                           (y) NO ADVERSE SELECTION. The Seller has not used
selection procedures that identified the Mortgage Loans as being less desirable
or valuable than other comparable mortgage loans in the Seller's portfolio at
the related Cut-Off Date;

                           (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage
Note, the Mortgage, the Assignment of Mortgage and any other documents required
to be delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                           (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the
Mortgaged Property is a condominium unit or a planned unit development (other
than a de minimis planned unit development) such condominium or planned unit
development project meets Fannie Mae eligibility requirements for sale to Fannie
Mae or is located in a condominium or planned unit development project which has
received Fannie Mae project approval and the representations and warranties
required by Fannie Mae with respect to such condominium or planned unit
development have been made and remain true and correct in all respects;

                           (bb) DUE ON SALE. 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;

                           (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of
Mortgage is in recordable form and is acceptable for recording under the laws of
the jurisdiction in which the Mortgaged Property is located;

                           (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                           (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future
advances made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second] lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee's consolidated interest or
by other title evidence acceptable to Fannie Mae and Freddie Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;

                           (ff) MORTGAGED PROPERTY UNDAMAGED. There is no
proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property. The Mortgaged Property

<PAGE>

is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended;

                           (gg) COLLECTION PRACTICES; ESCROW DEPOSITS[;
ADJUSTABLE RATE MORTGAGE LOAN ADJUSTMENTS]. The origination and collection
practices used with respect to the Mortgage Loan have been in accordance with
Accepted Servicing Practices and in all respects in compliance with all
applicable laws and regulations. With respect to escrow deposits and Escrow
Payments (other than with respect to Second Lien Mortgage Loans for which the
mortgagee under the prior mortgage lien is collecting Escrow Payments), all such
payments are in the possession of the Seller 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. An escrow of funds is not prohibited by applicable law
and has been established in an amount sufficient to pay for every item which
remains unpaid and which has been assessed but is not yet due and payable. No
escrow deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under the Mortgage or the Mortgage Note. All Mortgage
Interest Rate adjustments have been made in strict compliance with state and
federal law and the terms of the related Mortgage Note. Any interest required to
be paid pursuant to state and local law has been properly paid and credited;

                           (hh) APPRAISAL. The Seller has delivered to the
Purchaser an appraisal of the Mortgaged Property signed prior to the approval of
the Mortgage application by a qualified appraiser who (i) is licensed in the
state where the Mortgaged Property is located, (ii) has no interest, direct or
indirect, in the Mortgaged Property or in any Loan or the security therefor, and
(iii) does not receive compensation that is affected by the approval or
disapproval of the Loan. The appraisal shall have been made within one hundred
twenty (120) days of the origination of the Loan, be completed in compliance
with the Uniform Standards of Professional Appraisal Practice, any additional
requirements set forth for appraisals in EXHIBIT 2 hereof, and all applicable
Federal and state laws and regulations.

                           (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor
has not notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors' Civil
Relief Act of 1940;

                           (jj) ENVIRONMENTAL MATTERS. To the best of the
Seller's knowledge, the Mortgaged Property is free from any and all toxic or
hazardous substances and there exists no violation of any local, state or
federal environmental law, rule or regulation. There is no pending action or
proceeding directly involving any Mortgaged Property of which the Seller is
aware in which compliance with any environmental law, rule or regulation is an
issue; and to the best of the Seller's knowledge, nothing further remains to be
done to satisfy in full all requirements of each such law, rule or regulation
consisting a prerequisite to use and enjoyment of said property;

                           (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made
in connection with (i) the construction or rehabilitation of a Mortgaged
Property or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

<PAGE>

                           (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                           (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or
more natural persons and/or trustees for an Illinois land trust or a trustee
under a "living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                           (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has
executed a statement to the effect that the Mortgagor has received all
disclosure materials required by applicable law with respect to the making of
adjustable rate mortgage loans. The Seller shall maintain such statement in the
Mortgage File;

                           (oo) RIEGLE ACT. None of the Mortgage Loans are
classified as "high cost" loans under the Home Ownership and Equity Protection
Act of 1994;][Each Mortgage Loan classified as a "high cost" loan under Section
32 of the Home Ownership and Equity Protection Act of 1994 complies with all
applicable rules and regulations with respect to disclosures and other
documentation;

                           (pp) TEXAS HOME EQUITY LOANS. With respect to any
Loan which is a Texas Home Equity Loan, any and all requirements of Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans
which were in effect at the time of the origination of the Mortgage Loan have
been complied with. Specifically, without limiting the generality of the
foregoing,

                                    (a) all fees paid by the owner of the
                  Mortgaged Property or such owner's spouse, to any person, that
                  were necessary to originate, evaluate, maintain, record,
                  insure or service the Mortgage Loan are reflected in the
                  closing statement for such Mortgage Loan;

                                    (b) the Mortgage Loan was closed only at the
                  office of the mortgage lender, an attorney at law, or a title
                  company;

                                    (c) the Mortgagee has not been found by a
                  federal regulatory agency to have engaged in the practice of
                  refusing to make loans because the applicants for the loans
                  reside or the property proposed to secure the loans is located
                  in a certain area;

                                    (d) the owner of the Mortgaged Property was
                  not required to apply the proceeds of the Loan to repay
                  another debt except debt secured by the Mortgaged Property or
                  debt to a lender other than the Mortgagee;

<PAGE>

                                    (e) the owner of the Mortgaged Property did
                  not sign any documents or instruments relating to the Loan in
                  which blanks were left to be filled in; and

                                    (f) if discussions between the Mortgagee and
                  the Borrower were conducted primarily in a language other than
                  English, the Mortgagee provided to the owner of the Mortgaged
                  Property, prior to closing, a copy of the notice required by
                  Section 50(g), Article XVI of the Texas Constitution
                  translated into the written language in which the discussions
                  were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.]

                           (qq) INSURANCE. The Seller has caused or will cause
to be performed any and all acts required to preserve the rights and remedies of
the Purchaser in any insurance policies applicable to the Mortgage Loans
including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser;

                           (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the
Mortgage Loans are simple interest Mortgage Loans;

                           (ss) PREPAYMENT FEE. With respect to each Mortgage
Loan that has a prepayment fee feature, each such prepayment fee is enforceable
and will be enforced by the Seller, and each prepayment penalty is permitted
pursuant to federal, state and local law. Each such prepayment fee is in an
amount equal to the maximum amount permitted under applicable law;

                           (tt) TAX SERVICE. The Seller shall have obtained a
life of loan, transferable real estate tax service contract with a tax service
company reasonably accepted to the Purchaser on all of the Mortgage Loans and
shall assign all such contracts to the Purchaser;

                           (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall
have obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                           (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan
has a CLTV in excess of 100%. No Mortgage Loan has an Equity LTV in excess of
125%;

                           (ww) CONSENT. Either (a) no consent for the Second
Lien Mortgage Loan is required by the holder of the related first lien or (b)
such consent has been obtained and is contained in the Mortgage File. The
Mortgage Note and the related Mortgage are original and genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in all
respects in accordance with its terms subject to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application affecting the
rights of creditors and by general equitable principles. All parties to the
Mortgage Note and the Mortgage had the legal capacity to enter into the Mortgage

<PAGE>

Loan and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage
Note and the Mortgage have been duly and properly executed by such parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

                           (xx) PAYMENTS. Principal payments on the Mortgage
Loan commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month (unless otherwise indicated on the Mortgage Loan Schedule) in
equal monthly installments of principal and interest, 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;

                           (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The
Mortgage Loan has an LTV equal to or less than 100%. Except for Mortgage Loans
underwritten in accordance with a Lender Paid Mortgage Insurance Policy Program
or otherwise disclosed on the Mortgage Loan Schedule, if a Mortgage Loan has an
LTV greater than 80%, the excess of the principal balance of the Mortgage Loan
over 75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or
the lesser of the Appraised Value or the purchase price of the Mortgaged
Property, with respect to a purchase money Mortgage Loan, is and will be insured
as to payment defaults by a Primary Mortgage Insurance Policy issued by a
Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy have
been and are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium.

<PAGE>

                               AAMES CAPITAL CORP.
                               -------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance with the
terms of the related Mortgage Note;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage

<PAGE>

Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

<PAGE>

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two-to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home. No portion of the Mortgaged Property is used for
commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                  (1) the lien of current real property taxes and assessments
         not yet due and payable;

                  (2) covenants, conditions and restrictions, rights of way,
         easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                  (3) other matters to which like properties are commonly
         subject which do not materially interfere with the benefits of the
         security intended to be provided by the Mortgage or the use, enjoyment,
         value or marketability of the related Mortgaged Property; and

                  (4) with respect to each Second Lien Mortgage a prior mortgage
         lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the

<PAGE>

same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secure debt or other security instrument creating a lien subordinate to the lien
of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. The documents, instruments and agreements submitted
for loan underwriting and all information supplied by, on behalf of, or
concerning the Mortgagor, were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading. No
fraud, negligence, misrepresentation or omission of fact with respect to a
Mortgage Loan has taken place on the part of the Sellers or the Mortgagor or any
other party involved in the origination or servicing of the Mortgage Loan. The
Sellers have reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae

<PAGE>

or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie
Mac and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and assigns, as to the
first or second priority lien of the Mortgage in the original principal amount
of the Mortgage Loan ,and 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 Interest Rate and Monthly Payment,
subject only to the exceptions contained in and clauses (1), (2), and (3), and
with respect to each Second Lien Mortgage Loan clause (4) of paragraph (j) of
this Section 8. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the Mortgage,
including the Seller, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development

<PAGE>

pursuant to Sections 203 and 211 of the National Housing Act or a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a Federal or State authority.
The Mortgage Interest Rate is the fixed interest rate set forth in the Mortgage
Note adjusted semi-annually on each Interest Rate Adjustment Date to equal the
Index plus the Gross Margin, rounded up or down to the nearest 0.125%, subject
to the Periodic Rate Cap and the Lifetime Rate Cap. The Mortgage Note is payable
in equal monthly installments of principal and interest, which installments of
interest are subject to change due to adjustments to the Mortgage Interest Rate
on each, 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, rounded up or down
to the nearest 0.125%, subject to the Periodic Rate Cap and the Lifetime Rate
Cap;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto.

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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;

<PAGE>

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor, other than the Mortgagor's credit standing, that can
reasonably be expected to cause private institutional investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

<PAGE>

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with accepted servicing
practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof and all applicable Federal and state laws and
regulations.

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

<PAGE>

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (nn) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;
Each Mortgage Loan classified as a "high cost" loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 complies with all applicable rules
and regulations with respect to disclosures and other documentation;

                  (oo) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g),

<PAGE>

         Article XVI of the Texas Constitution translated into the written
         language in which the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (pp) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (qq) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (rr) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law.

                  (ss) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (tt) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (uu) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLIV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (vv) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
FNMA form 442 has been delivered to the Purchaser within sixty (60) days after
the Closing Date, the proceeds of the Mortgage Loan have been fully disbursed

<PAGE>

and 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 the Mortgage Loan and the
recording of the Mortgage were paid or are in the process of being paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage.

                  (ww) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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;

                  (xx) LTV, PRIMARY MORTGAGE INSURANCE POLICY. Any Mortgage Loan
on the Mortgage Loan Schedule that has Primary Mortgage Insurance is and will be
insured as to payment defaults by the Primary Mortgage Insurance Policy issued
by a Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium.

<PAGE>

                       MERITAGE MORTGAGE CORPORATION/RBMG
                       ----------------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which previously became due and owing

<PAGE>

have been paid, or an escrow of funds has been established in an amount
sufficient to pay for every such item which remains unpaid and which has been
assessed but is not yet due and payable. 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 greater to the
day which precedes by one month the Due Date of the first installment of
principal and interest, including, without limitation, taxes and insurance
payments, the Seller 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 under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day
which precedes by one month the Due Date of the first installment of principal
and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain

<PAGE>

and maintain such insurance at such 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 an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering the common facilities of a planned
unit development. The hazard insurance policy is the valid and binding
obligation of the insurer, is in full force and effect, and will be in full
force and effect and inure to the benefit of the Purchaser upon the consummation
of the transactions contemplated by this Agreement. The Seller has not engaged
in, and has no knowledge of the Mortgagor's or any subservicer's having engaged
in, any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of either, including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting, enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating, and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to the foregoing. The
lien of the Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

<PAGE>

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting, the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller or the original lender has
prudently originated and underwritten each Mortgage Loan;

                  (1) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the

<PAGE>

Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller or Meritage is the sole owner of
record and holder of the Mortgage Loan. The Mortgage Loan is not assigned or
pledged, and the Seller has good and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan therein to the Purchaser free and
clear of any encumbrance, equity, participation interest, lien, pledge, charge,
claim or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment, subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the

<PAGE>

prior mortgage is in full force and effect, (ii) there is no default, breach,
violation or event of acceleration existing under such prior mortgage or the
related mortgage note, (iii) no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Mortgage Loan to receive notice
of, and affords such mortgage an opportunity to cure any default by payment in
full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and, to the
best of the Seller's knowledge, no rights are outstanding that under the law
could cive rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. Unless
affirmative coverage for same is provided in the title insurance policy, all
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is either the fixed interest rate
set forth in the Mortgage Note or adjusted on each Interest Rate Adjustment Date
to equal the Index plus the Gross Margin, rounded up or down to the nearest
0.125%, subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the
Lifetime Mortgage Interest Rate Cap. The Mortgage Note is payable in an equal
monthly installments of principal and interest, which installments of interest
are subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan, 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 each Fixed Rate Mortgage Loan or over an original term of not
more than forty years from commencement of amortization with respect to each
Adjustable Rate Mortgage Loan, rounded up or down to the nearest 0.125%, subject
to the Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime
Mortgage Interest Rate Cap]; provided, however, in the case of a balloon
Mortgage Loan, the Mortgage Loan matures at least five (5) years after the first
payment date thereby requiring a final payment of the outstanding principal
balance prior to the full amortization of the Mortgage Loan;

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will

<PAGE>

be able to deliver good and merchantable title to the Mortgaged Property. There
is no homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage subject to applicable federal and state laws
and judicial precedent with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Note and
Mortgage are on forms acceptable to Fannie Mae or Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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 or has been legally substituted for the named trustee, 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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

<PAGE>

                  (bb) DUE ON SALE. Subject to applicable federal 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second] lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee's consolidated interest or
by other title evidence acceptable to Fannie Mae and Freddie Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or, to the best of Seller's knowledge, threatened for the total or
partial condemnation of the Mortgage Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and, if applicable,
has been established in an amount sufficient to pay for every item which remains
unpaid and which has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law

<PAGE>

and the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations;

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. To the best of the Seller's
knowledge, the Mortgaged Property is free from any and all toxic or hazardous
substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. There is no pending action or proceeding
directly involving, any Mortgaged Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is an issue; and to
the best of the Seller's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
consisting, a prerequisite to use and enjoyment of said property;

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;

<PAGE>

                  (oo) RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of 1994;

                  (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting, the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

<PAGE>

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Except as otherwise set forth on the Mortgage Loan
Schedule, with respect to each Mortgage Loan that contains a Prepayment Penalty,
such Prepayment Penalty is at least equal to the lesser of (A) the maximum
amount permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan;

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;

                  (ww) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting, the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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, the Mortgage Loan
and the recording of the Mortgage were paid or are in the process of being paid,
and the Mortgagor is not entitled to any refund of any amounts paid or due under
the Mortgage Note or Mortgage;

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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

<PAGE>

commencement of amortization with respect to each Fixed Rate Mortgage Loan or an
original term of not more than forty years from commencement of amortization
with respect to each Adjustable Rate Mortgage Loan; provided, however, in the
case of a balloon Mortgage Loan, the Mortgage Loan matures at least five (5)
years after the first payment date thereby requiring a final payment of the
outstanding principal balance prior to the full amortization of the Mortgage
Loan;

                  (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than 100%. With respect to each Mortgage Loan that
is insured as to payment defaults by a Primary Mortgage Insurance Policy, all
provisions of such Primary Mortgage Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. No action, inaction, or event has occurred and no
state of facts exists that has, or will result in the exclusion from, denial of,
or defense to coverage. Any Mortgage Loan subject to a Primary Mortgage
Insurance Policy obligates the Mortgagor thereunder to maintain the Primary
Mortgage Insurance Policy and to pay all premiums and charges in connection
therewith. The mortgage interest rate for the Mortgage Loan as set forth on the
Mortgage Loan Schedule is net of any such insurance premium; and

                  (zz) SERVICING PRACTICES. Each Mortgage Loan has been serviced
in all material respects in compliance with those mortgage servicing practices
(including collection procedures) of prudent mortgage banking institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.

<PAGE>

                     EVERGREEN MONEYSOURCE MORTGAGE COMPANY
                     --------------------------------------

         Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL
MORTGAGE LOANS.

         The Seller hereby represents and warrants to the Purchaser, with
respect to each Mortgage Loan, as of the related Closing Date or such other date
specified herein:

         (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;

         (b) PAYMENTS CURRENT. All payments required to be made up to the
related Cut-off Date for the Mortgage Loan under the terms of the Mortgage Note
have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the Closing Date;

         (c) NO OUTSTANDING CHARGES. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of finds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable.
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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller has not advanced
finds, or induced, solicited or knowingly received any advance of finds by a
party other than the Mortgagor, directly or indirectly, for the payment of any
amount required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

         (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

         (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

         (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

         (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

         (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been satisfied,
canceled, 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

<PAGE>

effect any such release, cancellation, subordination or rescission. The Seller
has not waived the performance by the Mortgagor of any action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Seller waived any default resulting from any action or
inaction by the Mortgagor;

         (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged Property is
a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low-rise condominium project, or an individual
unit in a planned unit development, provided, however, that any condominium unit
or planned unit development shall conform with the applicable Fannie Mae
requirements regarding such dwellings and that no residence or dwelling is a
mobile home or a manufactured dwelling. No portion of the Mortgaged Property is
used for commercial purposes;

         (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid, subsisting
enforceable and perfected first or second lien on the Mortgaged Property,
including all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:

                  (1) the lien of current real property taxes and assessments
         not yet due and payable;

                  (2) covenants, conditions and restrictions, rights of way,
         easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                  (3) other matters to which like properties are commonly
         subject which do not materially interfere with the benefits of the
         security intended to be provided by the Mortgage or the use, enjoyment,
         value or marketability of the related Mortgaged Property; and

                  (4) with respect to each Second Lien Mortgage a prior mortgage
         lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

<PAGE>

         (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the Mortgage
are genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the Mortgage
Note and the Mortgage and any other related agreement had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note and
the Mortgage and any other related agreement, and the Mortgage Note and the
Mortgage and any other related agreement have been duly and properly executed by
such parties. No statement, tape, diskette, form, report or other document
prepared by, or on behalf of, the Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. No fraud,
negligence, misrepresentation or omission of fact with respect to a Mortgage
Loan has taken place on the part of the Seller or the Mortgagor or any other
party involved in the origination or servicing of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

         (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

         (m) OWNERSHIP. The Seller is the sole owner of record and holder of the
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Seller has
good and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan therein to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

         (n) DOING BUSINESS. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws of the
state wherein the Mortgaged Property is located, and (2) organized under the
laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

         (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA lender's
title insurance policy or other generally acceptable form of policy of insurance
acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to
Fannie Mae or Freddie Mae and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the

<PAGE>

Mortgage Loan and 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 Interest Rate and Monthly Payment,
subject only to the exceptions contained in and clauses (1), (2), and (3), and
with respect to each Second Lien Mortgage Loan clause (4) of paragraph (j) of
this Section 8. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the Mortgage,
including the Seller, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;

         (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration: With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

         (q) NO MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

         (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;

         (s) ORIGINATION; PAYMENT TERMS. At the time the Mortgage Loan was
originated, the originator was a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National Housing
Act or a savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the

<PAGE>

Mortgage Note adjusted semi-annually on each Interest Rate Adjustment Date to
equal the Index plus the Gross Margin, rounded up or down to the nearest 0.125%,
subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime
Mortgage Interest Rate Cap. The Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest are
subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan, 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, rounded up or down to the nearest 0.125%, subject to the Initial
Periodic Rate Cap, the Periodic Rate Cap and the Lifetime Mortgage Interest Rate
Cap with respect to each Adjustable Rate Mortgage Loan;

         (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

         (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage Loan was
underwritten in accordance with the Seller's underwriting guidelines in effect
at the time the Mortgage Loan was originated, a copy of which underwriting
guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is in conformity
with the standards of Fannie Mae or Freddie Mac under one of their respective
home mortgage purchase programs (except that the principal balance of certain
Mortgage Loans may have exceeded the limits of Fannie Mae or Freddie Mac) and
the Mortgage Note and Mortgage are on forms acceptablce to Fannie Mae or Freddie
Mac;

         (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged Property is
lawfully occupied under applicable law. 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;

         (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in (j) above;

         (x) DEEDS OF TRUST. 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;

<PAGE>

         (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

         (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered by
the Seller under this Agreement have been delivered to the Purchaser or its
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with EXHIBIT 2, except for such documents the originals of
which have been delivered to the Purchaser or its Custodian;

         (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged Property
is a condominium unit or a planned unit development (other than a de minimus
planned unit development) such condominium or planned unit development project
meets Fannie Mae eligibility requirements for sale to Fannie Mae or is located
in a condominium or planned unit development project which has received Fannie
Mae project approval and the representations and warranties required by Fannie
Mae with respect to such condominium or planned unit development have been made
and remain true and correct in all respects;

         (bb) DUE ON SALE. 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;

         (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

         (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR CONTINGENT
INTERESTS. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

         (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances made prior
to the related 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. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

<PAGE>

         (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding pending or
threatened for the total or partial condemnation of the Mortgaged Property. The
Mortgaged Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the value
of the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended;

         (gg) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE MORTGAGE
LOAN ADJUSTMENTS. The origination and collection practices used with respect to
the Mortgage Loan have been in accordance with Accepted Servicing Practices and
in all respects in compliance with all applicable laws and regulations. With
respect to escrow deposits and Escrow Payments (other than with respect to
Second Lien Mortgage Loans for which the mortgagee under the prior mortgage lien
is collecting Escrow Payments), all such payments are in the possession of the
Seller 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. An
escrow of funds is not prohibited by applicable law and has been established in
an amount sufficient to pay for every item which remains unpaid and which has
been assessed but is not yet due and payable. No escrow deposits or Escrow
Payments or other charges or payments due the Seller have been capitalized under
the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have
been made in strict compliance with state and federal law and the terms of the
related Mortgage Note. Any interest required to be paid pursuant to state and
local law has been properly paid and credited;

         (hh) APPRAISAL. The Seller has delivered to the Purchaser an appraisal
of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in Exhibit 2 hereof, and all applicable Federal and state laws and
regulations;

         (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not notified
the Seller, and the Seller has no knowledge of any relief requested or allowed
to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of 1940;

         (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free from any and
all toxic or hazardous substances and there exists no violation of any local,
state or federal environmental law, rule or regulation. There is no pending
action or proceeding directly involving any Mortgaged Property of which the
Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

         (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in connection
with (i) the construction or rehabilitation of a Mortgaged Property or (ii)
facilitating the trade-in or exchange of a Mortgaged Property;

<PAGE>

         (ll) NO DENIAL OF INSURANCE. 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 pool
insurance policy, special hazard insurance policy, Primary Mortgage Insurance
Policy or bankruptcy bond, 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 the Seller or any
designee of the Seller or any corporation in which the Seller or any officer,
director, or employee had a financial interest at the time of placement of such
insurance;

         (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Fannie Mae guidelines for
such trusts;

         (nn) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials required
by applicable law with respect to the making of adjustable rate mortgage loans.
The Seller shall maintain such statement in the Mortgage File;

         (oo) RIEGLE ACT. None of the Mortgage Loans are classified as "high
cost" loans under the Home Ownership and Equity Protection Act of 1994; Each
Mortgage Loan classified as a "high cost" loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 complies with all applicable rules
and regulations with respect to disclosures and other documentation;

         (pp) TEXAS HOME EQUITY LOANS. With respect to any Loan which is a Texas
Home Equity Loan, any and all requirements of Section 50, Article XVI of the
Texas Constitution applicable to Texas Home Equity Loans which were in effect at
the time of the origination of the Mortgage Loan have been complied with.
Specifically, without limiting the generality of the foregoing,

                  (a) all fees paid by the owner of the Mortgaged Property or
         such owner's spouse, to any person, that were necessary to originate,
         evaluate, maintain, record, insure or service the Mortgage Loan are
         reflected in the closing statement for such Mortgage Loan;

                  (b) the Mortgage Loan was closed only at the office of the
         mortgage lender, an attorney at law, or a title company;

                  (c) the Mortgagee has not been found by a federal regulatory
         agency to have engaged in the practice of refusing to make loans
         because the applicants for the loans reside or the property proposed to
         secure the loans is located in a certain area;

                  (d) the owner of the Mortgaged Property was not required to
         apply the proceeds of the Loan to repay another debt except debt
         secured by the Mortgaged Property or debt to a lender other than the
         Mortgagee;

                  (e) the owner of the Mortgaged Property did not sign any
         documents or instruments relating to the Loan in which blanks were left
         to be filled in; and

<PAGE>

                  (f) if discussions between the Mortgagee and the Borrower were
         conducted primarily in a language other than English, the Mortgagee
         provided to the owner of the Mortgaged Property, prior to closing, a
         copy of the notice required by Section 50(g), Article XVI of the Texas
         Constitution translated into the written language in which the
         discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan;

         (qq) INSURANCE. The Seller has caused or will cause to be performed any
and all acts required to preserve the rights and remedies of the Purchaser in
any insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of coinsured, joint loss payee and
mortgagee rights in favor of the Purchaser;

         (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage Loans are
simple interest Mortgage Loans;

         (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that has a
prepayment fee feature, each such prepayment fee is enforceable and will be
enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount not equal
to the maximum amount permitted under applicable law;

         (tt) TAX SERVICE. The Seller shall have obtained a life of loan,
transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

         (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have obtained a
life of loan, transferable flood certification contract for each Mortgage Loan
and shall assign all such contracts to the purchaser;

         (vv) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV in
excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

         (ww) CONSENT. Either (a) no consent for the Second Lien Mortgage Loan
is required by the holder of the related first lien or (b) such consent has been
obtained and is contained in the Mortgage File. The Mortgage Note and the
related Mortgage are original and genuine and each is the legal, valid and
binding obligation of the maker thereof, enforceable in all respects in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or

<PAGE>

the Mortgagor, or, on the part of any other party involved in the origination of
the Mortgage Loan. Except to the extent the Mortgage Loan is subject to
completion escrows which have been disclosed to and acknowledged by the
Purchaser and which meet the requirements of the Seller's Underwriting
Standards, and as to which a completed Fannie Mae form 442 has been delivered to
the Purchaser within sixty (60) days after the Closing Date, the proceeds of the
Mortgage Loan have been fully disbursed and 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 the Mortgage Loan and the recording of the Mortgage were paid
or are in the process of being paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;

         (xx) PAYMENTS. Principal payments on the Mortgage Loan commenced no
more than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, 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;

         (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan has an
LTV equal to or less than ___%. Except for Mortgage Loans underwritten in
accordance with a Lender Paid Mortgage Insurance Policy Program, if a Mortgage
Loan has an LTV greater than 80%, the excess of the principal balance of the
Mortgage Loan over 75% of the Appraised Value, with respect to a Refinanced
Mortgage Loan, or the lesser of the Appraised Value or the purchase price of the
Mortgaged Property, with respect to a purchase money Mortgage Loan, is and will
be insured as to payment defaults by a Primary Mortgage Insurance Policy issued
by a Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium.

<PAGE>

                          FIRST NATIONAL BANK OF NEVADA
                          -----------------------------

         Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL
MORTGAGE LOANS.

         The Seller hereby represents and warrants to the Purchaser, with
respect to each Mortgage Loan, as of the related Closing Date or such other date
specified herein:

         (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;

         (b) PAYMENTS CURRENT. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note
have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance with the
terms of the related Mortgage Note;

         (c) NO OUTSTANDING CHARGES. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which 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 which
remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

         (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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

<PAGE>

by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the policy, and which assumption agreement is
part of the Mortgage Loan File delivered to the Purchaser and the terms of which
are reflected in the Mortgage Loan Schedule;

         (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

         (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

         (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

<PAGE>

         (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been satisfied,
canceled, 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 release,
cancellation, subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

         (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged Property is
a fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low-rise condominium project, or an individual
unit in a planned unit development, provided, however, that any condominium unit
or planned unit development shall conform with the applicable Fannie Mae
requirements regarding such dwellings and that no residence or dwelling is a
mobile home or a manufactured dwelling. No portion of the Mortgaged Property is
used for commercial purposes;

         (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid, subsisting,
enforceable and perfected first or second lien on the Mortgaged Property,
including all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:

                  (1) the lien of current real property taxes and assessments
         not yet due and payable;

                  (2) covenants, conditions and restrictions, rights of way,
         easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         to otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                  (3) other matters to which like properties are commonly
         subject which do not materially interfere with the benefits of the
         security intended to be provided by the Mortgage or the use, enjoyment,
         value or marketability of the related Mortgaged Property; and

                  (4) with respect to each Second Lien Mortgage a prior mortgage
         lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the

<PAGE>

same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secure debt or other security instrument creating a lien subordinate to the lien
of the Mortgage;

         (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the Mortgage
are genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the Mortgage
Note and the Mortgage and any other related agreement had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note and
the Mortgage and any other related agreement, and the Mortgage Note and the
Mortgage and any other related agreement have been duly and properly executed by
such parties. No statement, tape, diskette, form, report or other document
prepared by, or on behalf of, the Seller pursuant to this Agreement or in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. No fraud,
negligence, misrepresentation or omission of fact with respect to a Mortgage
Loan has taken place on the part of the Seller or the Mortgagor or any other
party involved in the origination or servicing of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

         (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

         (m) OWNERSHIP. The Seller is the sole owner of record and holder of the
Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Seller has
good and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan therein to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

         (n) DOING BUSINESS. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws of the
state wherein the Mortgaged Property is located, and (2) organized under the
laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

<PAGE>

         (o) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan has an
LTV equal to or less than 95%. The LTV of the Mortgage Loan either is not more
than 80% or the excess over 75% of the Appraised Value is and will be insured as
to payment defaults by a Primary Mortgage Insurance Policy until the LTV of such
Mortgage Loan is reduced to 80%; provided, however such Mortgage Loans will not
be insured as to payment defaults by a Primary Mortgage Insurance Policy if so
indicated on the Mortgage Loan Schedule. All provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid. No action,
inaction, or event has occurred and no state of facts exists that has, or will
result in the exclusion from, denial of, or defense to coverage. Any Mortgage
Loan subject to a Primary Mortgage Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Mortgage Insurance Policy and to pay all
premiums and charges in connection therewith. The Mortgage Interest Rate for the
Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any such
insurance premium;

         (p) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA lender's
title insurance policy or other generally acceptable form of policy of insurance
acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to
Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan, and 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 Interest Rate and Monthly
Payment, subject only to the exceptions contained in and clauses (1), (2), and
(3), and with respect to each Second Lien Mortgage Loan clause (4) of paragraph
(j) of this Section 8. Where required by state law or regulation, the Mortgagor
has been given the opportunity to choose the carrier of the required mortgage
title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller is the sole insured
of such lender's title insurance policy, and such lender's title insurance
policy is in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no prior holder of the
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;

         (q) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second

<PAGE>

Lien Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise under the prior
mortgage;

         (r) NO MECHANICS' LIENS. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

         (s) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;

         (t) ORIGINATION; PAYMENT TERMS. At the time the Mortgage Loan was
originated, the originator was a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National Housing
Act or a savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note adjusted semi-annually on each Interest Rate Adjustment
Date to equal the Index plus the Gross Margin, rounded up or down to the nearest
0.125%, subject to the Periodic Rate Cap and the Lifetime Rate Cap. The Mortgage
Note is payable in equal monthly installments of principal and interest, which
installments of interest are subject to change due to adjustments to the
Mortgage Interest Rate on each, 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, rounded up or down to the nearest 0.125%, subject to the Periodic
Rate Cap and the Lifetime Rate Cap;

         (u) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

         (v) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage Loan was
underwritten in accordance with the Seller's underwriting guidelines in effect
at the time the Mortgage Loan was originated, a copy of which underwriting
guidelines are attached as Exhibit 8 hereto. The Mortgage Notes and Mortgages
(exclusive of any riders) are on forms generally acceptable to FNMA or FHLMC.
Seller is currently selling loans to FNMA and/or FHLMC which are the same
document forms as the Mortgage Notes and Mortgages (inclusive of any riders);

<PAGE>

         (w) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related Closing Date
the Mortgaged Property is lawfully occupied under applicable law. 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;

         (x) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in (j) above;

         (y) DEEDS OF TRUST. 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;

         (z) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

         (aa) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered by
the Seller under this Agreement have been delivered to the Purchaser or its
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with EXHIBIT 2, except for such documents the originals of
which have been delivered to the Purchaser or its Custodian;

         (bb) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged Property
is a condominium unit or a planned unit development (other than a de minimus
planned unit development) such condominium or planned unit development project
meets Fannie Mae eligibility requirements for sale to Fannie Mae or is located
in a condominium or planned unit development project which has received Fannie
Mae project approval and the representations and warranties required by Fannie
Mae with respect to such condominium or planned unit development have been made
and remain true and correct in all respects;

         (cc) DUE ON SALE. 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;

         (dd) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is in
recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

         (ee) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR CONTINGENT
INTERESTS. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or

<PAGE>

partially paid with funds deposited in any separate account established by the
Seller, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other similar provisions
currently in effect which may constitute a "buydown" provision. The Mortgage
Loan is not a graduated payment mortgage loan and the Mortgage Loan does not
have a shared appreciation or other contingent interest feature;

         (ff) CONSOLIDATION OF FUTURE ADVANCES. Any future advances made prior
to the related 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. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

         (gg) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding pending or
threatened for the total or partial condemnation of the Mortgaged Property. The
Mortgaged Property is undamaged by waste, fire, earthquake or earth movement,
windstorm, flood, tornado or other casualty so as to affect adversely the value
of the Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended;

         (hh) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE MORTGAGE
LOAN ADJUSTMENTS. The origination and collection practices used with respect to
the Mortgage Loan have been in accordance with Accepted Servicing Practices and
in all respects in compliance with all applicable laws and regulations. With
respect to escrow deposits and Escrow Payments (other than with respect to
Second Lien Mortgage Loans for which the mortgagee under the prior mortgage lien
is collecting Escrow Payments), all such payments are in the possession of the
Seller 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. An
escrow of funds is not prohibited by applicable law and has been established in
an amount sufficient to pay for every item which remains unpaid and which has
been assessed but is not yet due and payable. No escrow deposits or Escrow
Payments or other charges or payments due the Seller have been capitalized under
the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have
been made in strict compliance with state and federal law and the terms of the
related Mortgage Note. Any interest required to be paid pursuant to state and
local law has been properly paid and credited;

         (ii) APPRAISAL. The Seller has delivered to the Purchaser an appraisal
of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations or as otherwise conforms to the standards as set forth in section
201 of the FNMA's Seller's guide;

<PAGE>

         (jj) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not notified
the Seller, and the Seller has no knowledge of any relief requested or allowed
to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of 1940;

         (kk) ENVIRONMENTAL MATTERS. The Mortgaged Property is free from any and
all toxic or hazardous substances and there exists no violation of any local,
state or federal environmental law, rule or regulation. There is no pending
action or proceeding directly involving any Mortgaged Property of which the
Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

         (ll) NO CONSTRUCTION LOANS. No Mortgage Loan was made in connection
with (i) the construction or rehabilitation of a Mortgaged Property or (ii)
facilitating the trade-in or exchange of a Mortgaged Property;

         (mm) NO DENIAL OF INSURANCE. 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 pool
insurance policy, special hazard insurance policy, Primary Mortgage Insurance
Policy or bankruptcy bond, 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 the Seller or any
designee of the Seller or any corporation in which the Seller or any officer,
director, or employee had a financial interest at the time of placement of such
insurance;

         (nn) REGARDING THE MORTGAGOR. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Fannie Mae guidelines for
such trusts;

         (oo) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials required
by applicable law with respect to the making of adjustable rate mortgage loans.
The Seller shall maintain such statement in the Mortgage File;

         (pp) RIEGLE ACT. None of the Mortgage Loans are classified as "high
cost" loans under the Home Ownership and Equity Protection Act of 1994; Each
Mortgage Loan classified as a "high cost" loan under Section 32 of the Home
Ownership and Equity Protection Act of 1994 complies with all applicable rules
and regulations with respect to disclosures and other documentation;

         (qq) TEXAS HOME EQUITY LOANS. With respect to any Loan which is a Texas
Home Equity Loan, any and all requirements of Section 50, Article XVI of the
Texas Constitution applicable to Texas Home Equity Loans which were in effect at
the time of the origination of the Mortgage Loan have been complied with.
Specifically, without limiting the generality of the foregoing,

<PAGE>

                  (a) all fees paid by the owner of the Mortgaged Property or
         such owner's spouse, to any person, that were necessary to originate,
         evaluate, maintain, record, insure or service the Mortgage Loan are
         reflected in the closing statement for such Mortgage Loan;

                  (b) the Mortgage Loan was closed only at the office of the
         mortgage lender, an attorney at law, or a title company;

                  (c) the Mortgagee has not been found by a federal regulatory
         agency to have engaged in the practice of refusing to make loans
         because the applicants for the loans reside or the property proposed to
         secure the loans is located in a certain area;

                  (d) the owner of the Mortgaged Property was not required to
         apply the proceeds of the Loan to repay another debt except debt
         secured by the Mortgaged Property or debt to a lender other than the
         Mortgagee;

                  (e) the owner of the Mortgaged Property did not sign any
         documents or instruments relating to the Loan in which blanks were left
         to be filled in; and

                  (f) if discussions between the Mortgagee and the Borrower were
         conducted primarily in a language other than English, the Mortgagee
         provided to the owner of the Mortgaged Property, prior to closing, a
         copy of the notice required by Section 50(g), Article XVI of the Texas
         Constitution translated into the written language in which the
         discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan;

         (rr) INSURANCE. The Seller has caused or will cause to be performed any
and all acts required to preserve the rights and remedies of the Purchaser in
any insurance policies applicable to the Mortgage Loans including, without
limitation, any necessary notifications of insurers, assignments of policies or
interests therein, and establishments of coinsured, joint loss payee and
mortgagee rights in favor of the Purchaser;

         (ss) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage Loans are
simple interest Mortgage Loans;

         (tt) PREPAYMENT FEE. With respect to each Mortgage Loan that has a
prepayment fee feature, each such prepayment fee is enforceable and will be
enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount not to
exceed the maximum amount permitted under applicable law;

         (uu) TAX SERVICE. The Seller shall have obtained a life of loan,
transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

<PAGE>

         (vv) FLOOD CERTIFICATION CONTRACT. The Seller shall have obtained a
life of loan, transferable flood certification contract for each Mortgage Loan
and shall assign all such contracts to the purchaser;

         (ww) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV in
excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;

         (xx) CONSENT. Either (a) no consent for the Second Lien Mortgage Loan
is required by the holder of the related first lien or (b) such consent has been
obtained and is contained in the Mortgage File. The Mortgage Note and the
related Mortgage are original and genuine and each is the legal, valid and
binding obligation of the maker thereof, enforceable in all respects in
accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
FNMA form 442 has been delivered to the Purchaser within sixty (60) days after
the Closing Date, the proceeds of the Mortgage Loan have been fully disbursed
and 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 the Mortgage Loan and the
recording of the Mortgage were paid or are in the process of being paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

         (yy) All parties which have had any interest in the Mortgage, whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the period in
which they held and disposed of such interest, were) (A) in compliance with any
and all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or otherwise exempt from
such qualification or licensing, or (3) not doing business in such state;

         (zz) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;

         (aaa) The Mortgagor is not in bankruptcy or insolvent and the Seller
has no knowledge of any circumstances or condition with respect to the Mortgage,
the Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that
could reasonably be expected to cause investors to regard the

<PAGE>

Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or materially adversely affect the value or marketability of the
Mortgage Loan;

         (bbb) The Mortgage Loans are fixed rate or adjustable rate mortgage
loans. The Mortgage Loans have an original term to maturity of not more than 30
years, with interest payable in arrears on the first day of each month. Each
Mortgage Note requires a monthly payment which is sufficient to fully amortize
the original principal balance over the original term thereof and to pay
interest at the related Mortgage Interest Rate. No Mortgage Loan contains terms
or provisions which would result in negative amortization;

         (ccc) The assignment of mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

         (ddd) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the funds were disbursed in connection with the Mortgage
Loan. The Mortgage Note is payable on the first day of each month in equal
monthly installments of principal and interest, 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; and

         (eee) Except for Mortgage Loans underwritten in accordance with a
Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan over
75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or the
lesser of the Appraised Value or the purchase price of the Mortgaged Property,
with respect to a purchase money Mortgage Loan, is and will be insured as to
payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified
Insurer; provided, however such Mortgage Loans will not be insured as to payment
defaults by a Primary Mortgage Insurance Policy if so indicated on the Mortgage
Loan Schedule. All provisions of such Primary Mortgage Insurance Policy have
been and are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium.

<PAGE>

                     TAYLOR, BEAN & WHITAKER MORTGAGE CORP.
                     --------------------------------------

                  Section 3.02    REPRESENTATIONS AND WARRANTIES AS TO
                                  INDIVIDUAL MORTGAGE LOANS.

                  References in this Section to percentages of Mortgage Loans
refer in each case to the percentage of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, based on the outstanding balances of the
Mortgage Loans as of the Cut-off Date, and giving effect to scheduled Monthly
Payments due on or prior to the Cut-off Date, whether or not received.
References to percentages of Mortgaged Properties refer, in each case, to the
percentages of expected aggregate principal balances of the related Mortgage
Loans (determined as described in the preceding sentence). The Seller hereby
represents and warrants to the Purchaser, as to each Mortgage Loan, as of the
Closing Date as follows:

<PAGE>

                  (a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes sent to the Purchaser, is
complete, true and correct in all material respects as of the Cut-Off Date;

                  (b) With respect to a Mortgage Loan that is not a Co-op Loan,
the Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Mortgage Loan that is a Co-op Loan, the Mortgage creates a first
lien or a first priority ownership interest in the stock ownership and leasehold
fights associated with the cooperative unit securing the related Mortgage Note;

                  (c) All payments due prior to the Cut-off Date for such
Mortgage Loan have been made as of the Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and has not been dishonored; there are
no material defaults under the terms of the Mortgage Loan; the Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required by the
Mortgage Loan; and there has been no more than one delinquency during the
preceding twelve-month period, and such delinquency did not last more than 30
days;

                  (d) There are no defaults by Seller in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

                  (e) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof except
in connection with an assumption agreement and which assumption agreement is
part of the Mortgage File and the terms of which are reflected in the Mortgage
Loan Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Mortgage Insurance Policy and
title insurance policy, to the extent required by the related policies;

                  (f) The Mortgage Note and the Mortgage are not subject to any
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 the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto; and the Mortgagor was not a
debtor in any state or federal bankruptcy or insolvency proceeding at the time
the Mortgage Loan was originated;

                  (g) All buildings or other customarily insured improvements
upon the Mortgaged Property are insured by an insurer acceptable under the FNMA
Guides, against loss by fire, hazards

<PAGE>

of extended coverage and such other hazards as are provided for in the FNMA
Guides or by FHLMC, as well as all additional requirements set forth in Section
4.10 of this Agreement. All such standard hazard policies are in full force and
effect and on the date of origination contained a standard mortgagee clause
naming the Seller and its successors in interest and assigns as loss payee and
such clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the Mortgage
Loan is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration which policy conforms
to FNMA and FHLMC requirements, as well as all additional requirements set forth
in Section 4.10 of this Agreement. Such policy was issued by an insurer
acceptable under FNMA or FHLMC guidelines. 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 the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;

                  (h) 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 or
disclosure laws applicable to the Mortgage Loan have been complied with in all
material respects;

                  (i) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, 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 release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;

                  (j) The Mortgage is a valid, subsisting, enforceable and
perfected first lien on the Mortgaged Property, including for Mortgage Loans
that are not Co-op Loans, all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems affixed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing securing the
Mortgage Note's original principal balance. The Mortgage and the Mortgage Note
do not contain any evidence of any security interest or other interest or right
thereto. Such lien is free and clear of all adverse claims, liens and
encumbrances having priority over the first lien of the Mortgage subject only to
(1) the lien of non-delinquent current real property taxes and assessments not
yet due and payable, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(3) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates a valid, subsisting, enforceable and perfected first
lien and first priority

<PAGE>

security interest on the property described therein, and the Seller has the full
right to sell and assign the same to the Purchaser;

    (k) The Mortgage Note and the related Mortgage are original and genuine and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the
Mortgage have been duly and properly executed by such parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of Seller or the Mortgagor, or, on the
part of any other party involved in the origination of the Mortgage Loan. The
proceeds of the Mortgage Loan have been fully disbursed and 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 the Mortgage Loan and the recording of the
Mortgage were paid or are in the process of being paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;

                  (l) The Seller or its affiliate is the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage
Note, except for the assignments of mortgage which have been sent for recording,
and upon recordation the Purchaser or its designee will be the owner of record
of the Mortgage and the indebtedness evidenced by the Mortgage Note, and upon
the sale of the Mortgage Loan to the Purchaser, the Seller will retain the
Mortgage File or any part thereof with respect thereto not delivered to the
Purchaser or the Purchaser's designee in trust only for the purpose of servicing
and supervising the servicing of the Mortgage Loan. Immediately prior to the
transfer and assignment to the Purchaser on the Closing Date, the Mortgage Loan,
including the Mortgage Note and the Mortgage, were not subject to an assignment
or pledge, and the Seller had good and marketable title to and was the sole
owner thereof and had 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 has the full right and authority subject to no interest
or participation of, or agreement with, any other party, to sell and assign the
Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of servicing the
Mortgage Loan as set forth in this Agreement. After the Closing Date, the Seller
will have no right to modify or alter the terms of the sale of the Mortgage Loan
and the Seller will have no obligation or right to repurchase the Mortgage Loan
or substitute another Mortgage Loan, except as provided in this Agreement, or as
otherwise agreed to by the Seller and the Purchaser;

                  (m) Each Mortgage Loan that is not a Co-op Loan is covered by
an ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to FNMA or FHLMC and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions
contained in (j)(1), (2) and (3) above) the Seller, its successors and assigns,
as to the first priority lien

<PAGE>

of the Mortgage in the original principal amount of the Mortgage Loan. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance. The
Seller, its successors and assigns, are the sole insureds of such lender's title
insurance policy, such title insurance policy has been duly and validly endorsed
to the Purchaser or the assignment to the Purchaser of the Seller's interest
therein does not require the consent of or notification to the insurer and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including tile Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;

                  (n) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Seller nor any prior mortgagee has
waived any default, breach, violation or event permitting acceleration;

                  (o) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the related
Mortgage;

                  (p) All improvements subject to the Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit) and
no improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred to
in clause (m) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;

                  (q) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with all the terms, conditions and requirements of the
Seller's Underwriting Standards in effect at the time of origination of such
Mortgage Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on
forms generally acceptable to FNMA or FHLMC. Seller is currently selling loans
to FNMA and/or FHLMC which are the same document forms as the Mortgage Notes and
Mortgages (inclusive of any riders). The Mortgage Loan bears interest at a fixed
rate as set forth in the Mortgage Loan Schedule, and Monthly Payments under the
Mortgage Note are due and payable on the first day of each month. The Mortgage
contains the usual and enforceable provisions of the originator at the time of
origination for the acceleration of the payment of the unpaid principal amount
of the Mortgage Loan if the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder;

                  (r) The Mortgaged Property is not subject to any material
damage by waste, fire, earthquake, windstorm, flood or other casualty. At
origination of the Mortgage Loan there was, and there currently is, no
proceeding pending for the total or partial condemnation of the Mortgaged

<PAGE>

Property. There have not been any condemnation proceedings with respect to the
Mortgaged Property and there are no such proceedings scheduled to commence at a
future date;

                  (s) The related Mortgage contains 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, (1) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (2) otherwise by judicial
foreclosure. There is no homestead or other exemption available to the Mortgagor
which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage;

                  (t) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;

                  (u) The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, approved by the Seller, 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, and the appraisal and appraiser both satisfy
the requirements of FNMA or FHLMC and Title XI of the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was originated. The
appraisal is in a form acceptable to FNMA or FHLMC and was made by a Qualified
Appraiser;

                  (v) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;

                  (w) The related Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

                  (x) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of such mortgage loans;

                  (y) The Mortgage Loan does not contain "graduated payment"
features; to the extent any Mortgage Loan contains any buydown provision, such
buydown funds have been maintained and administered in accordance with, and such
Mortgage Loan otherwise complies with, FNMA/FHLMC requirements relating to
buydown loans;

<PAGE>

                  (z) The Mortgagor is not in bankruptcy and, the Mortgagor is
not insolvent or in bankruptcy and the Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor's credit standing that could reasonably be
expected to cause investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or materially
adversely affect the value or marketability of the Mortgage Loan;

                  (aa) The Mortgage Loans are fixed rate mortgage loans. The
Mortgage Loans have an original term to maturity of not more than 30 years, with
interest payable in arrears on the first day of each month. Each Mortgage Note
requires a monthly payment which is sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate. No Mortgage Loan contains terms or provisions
which would result in negative amortization;

                  (bb) Except for Mortgage Loans underwritten in accordance with
the Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan over
75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or the
lesser of the Appraised Value or the purchase price of the Mortgaged Property,
with respect to a purchase money Mortgage Loan, is and will be insured as to
payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified
Insurer. All provisions of such Primary Mortgage Insurance Policy have been and
are being complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;

                  (cc) The assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (dd) As to Mortgage Loans that are not Co-op Loans and that
are not secured by an interest in a leasehold estate, the Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a townhouse, 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 de minimis planned unit development, provided, however,
that no residence or dwelling is a single parcel of real property with a
cooperative housing corporation erected thereon, or a mobile home. As of the
date of origination, no portion of the Mortgaged Property is used for commercial
purposes, and since the date or origination no portion of the Mortgaged Property
is used for commercial purposes;

                  (ee) Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated

<PAGE>

maturity date, over an original term of not more than thirty years from
commencement of amortization;

                  (ff) Certain Mortgage Loans as specified on the Mortgage Loan
Schedule may contain a Prepayment Penalty in an amount specified in the related
Mortgage Note or Mortgage.

                  (gg) As of the date of origination of the Mortgage Loan, the
Mortgage Property was lawfully occupied under applicable law, and 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;

                  (hh) If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development), or
stock in a cooperative housing corporation, such condominium, cooperative or
planned unit development project meets Seller's eligibility requirements as set
forth in Seller's underwriting guidelines;

                  (ii) There is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental law,
rule or regulation is an issue; there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to use and enjoyment of said property;

                  (jj) The Mortgagor has not notified the Seller, and the Seller
has no knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;

                  (kk) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property or facilitating the
trade-in or exchange of a Mortgaged Property;

                  (ll) No action has been taken or failed to be taken by Seller,
on or prior to the Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller, or for any other reason under such coverage;

                  (mm) Each Mortgage Loan has been serviced in all material
respects in compliance with Accepted Servicing Practices;

                  (nn) With respect to each Co-op Loan, the related Mortgage is
a valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is

<PAGE>

commonly subject and (b) other matters to which like collateral is commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the Security Agreement. There are no liens against or
security interest in the cooperative shares relating to each Co-op Loan (except
for unpaid maintenance, assessments and other amounts owed to the related
cooperative which individually or in the aggregate will not have a material
adverse effect on such Co-op Loan), which have priority over the Seller's
security interest in such cooperative shares;

                  (oo) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to FNMA and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;

                  (pp) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the
Internal Revenue Code, and is in material compliance with applicable federal,
state and local laws which, if not complied with, could have a material adverse
effect on the Mortgaged Property;

                  (qq) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;

                  (rr) The Mortgage Loan was originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank,
a commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;

                  (ss) With respect to any ground lease to which a Mortgaged
Property may be subject: (i) the Mortgagor is the owner of a valid and
subsisting leasehold interest under such ground lease; (ii) such ground lease is
in full force and effect, unmodified and not supplemented by any writing or
otherwise; (iii) all rent, additional rent and other charges reserved therein
have been fully paid to the extent payable as of the Closing Date; (iv) the
Mortgagor enjoys the quiet and peaceful possession of the leasehold estate,
subject to any sublease; (v) the Mortgagor is not in default under any of the
terms of such ground lease, and there are no circumstances which, with the
passage of time or the giving of notice, or both, would result in a default
under such ground lease; (vi) the lessor under such ground lease is not in
default under any of the terms or provisions of such ground lease on the part of
the lessor to be observed or performed; (vii) the lessor under such ground lease
has satisfied any repair or construction obligations due as of the Closing Date
pursuant to the terms of such ground lease; and (viii) the execution, delivery
and performance of the Mortgage do not require the consent (other than those
consents which have been obtained and are in full force and effect) under, and
will not contravene any provision of or cause a default under, such ground
lease;

                  (tt) With respect to any broker fees collected and paid on any
of the loans, all broker fees have been properly assessed to the borrower and no
claims will arise as to broker fees that are double charged and for which the
borrower would be intitled to reimbursement.

<PAGE>

                       MARKET STREET MORTGAGE CORPORATION
                       ----------------------------------

         Section 3.02. REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL MORTGAGE
LOANS.

         With respect to each Mortgage Loan, the Seller hereby represents and
warrants, to the Purchaser, as of the related Closing Date or as otherwise
provided herein for such Mortgage Loan as follows:

         (a) The information for such Mortgage Loan set forth in the related
Mortgage Loan Schedule, including any diskette or other related data tapes sent
to the Purchaser, is complete, true and correct in all material respects as of
the related Cut-Off Date;

         (b) With respect to a Mortgage Loan that is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note subject
only to (1) the lien of current real property taxes and assessments not yet due
and payable, (2) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording which
are acceptable to mortgage lending institutions generally and either (A) which
are referred to or otherwise considered in the appraisal made for the originator
of the Mortgage Loan, or (B) which do not adversely affect the appraised value
of the Mortgaged Property as set forth in such appraisal, and (3) other matters
to which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property. With
respect to a Mortgage Loan that is a Co-op Loan, the Mortgage creates a first
lien or a first priority ownership interest in the stock ownership and leasehold
rights associated with the cooperative unit securing the related Mortgage Note;

         (c) All payments due prior to the Cut-off Date for such Mortgage Loan
have been made as of the Closing Date; the Mortgage Loan is not delinquent in
payment more than 30 days; there are no material defaults under the terms of the
Mortgage Loan; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of the
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; and there has been no more
than one delinquency during the preceding twelve month period and such
delinquency did not last more than 30 days;

         (d) There are no defaults by the Mortgagor in complying with the terms
of the Mortgage, and all taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

         (e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded or sent for recording to the extent any
such recordation is required by law, or, necessary to protect the interest of
the Purchaser. No other instrument of waiver, alteration or modification has
been executed, and no Mortgagor has been released, in whole or in part, from the
terms thereof except in

<PAGE>

connection with an assumption agreement and which assumption agreement is part
of the Mortgage File and the terms of which are reflected in the Mortgage Loan
Schedule; the substance of any such waiver, alteration or modification has been
approved by the issuer of any related Primary Mortgage Insurance Policy and
title insurance policy, to the extent required by the related policies;

         (f) The Mortgage Note and the Mortgage are not subject to any 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 the
Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim or defense has
been asserted with respect thereto; and the Mortgagor was not a debtor in any
state or federal bankruptcy or insolvency proceeding at the time the Mortgage
Loan was originated;

         (g) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the FNMA Guides,
against loss by fire, hazards of extended coverage and such other hazards as are
provided for in the FNMA Guides or by FHLMC, as well as all additional
requirements set forth in Section 4.10 of this Agreement. All such standard
hazard policies are in full force and effect and on the date of origination
contained a standard mortgagee clause naming the person which originated such
Mortgage Loan and its successors in interest and assigns as loss payee and such
clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the Mortgage
Loan is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration which policy conforms
to FNMA and FHLMC requirements, as well as all additional requirements set forth
in Section 4.10 of this Agreement. Such policy was issued by an insurer
acceptable under FNMA or FHLMC guidelines. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;

         (h) Any and all applicable requirements of any federal, state or local
law including, ______ usury, truth-in-lending real estate settlement procedures,
consumer credit protection, equal credit opportunity or disclosure laws
applicable to the Mortgage Loan have been complied with in all material
respects;

         (i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, 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 release, cancellation, subordination or
rescission. The Seller has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Mortgagor;

         (j) The Mortgage is a valid, subsisting, enforceable and perfected
first lien on the Mortgaged Property, including for Mortgage Loans that are not
Co-op Loans, all buildings on the

<PAGE>

Mortgaged Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems affixed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing securing the Mortgage Note's original principal balance. The Mortgage
and the Mortgage Note do not contain any evidence of any security interest or
other interest or right thereto;

         (k) The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency, moratorium, reorganization and other laws of general application
affecting the rights of creditors and by general equitable principles. All
parties to the Mortgage Note and the Mortgage had the legal capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note and the
Mortgage. The Mortgage Note and the Mortgage have been duly and properly
executed by such parties. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken place
by the Seller or the Mortgagor, or, on the part of any other party involved in
the origination of the Mortgage Loan. Except to the extent the Mortgage Loan is
subject to completion escrows which have been disclosed to and acknowledged by
the Purchaser and which meet the requirements of the Seller's Underwriting
Standards, and as to which a completed FNMA form 442 has been delivered to the
Purchaser within sixty (60) days after the Closing Date, the proceeds of the
Mortgage Loan have been fully disbursed and 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 the Mortgage Loan and the recording of the Mortgage were paid
or are in the process of being paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;

         (l) Immediately prior to the transfer and assignment contemplated
herein, the Seller holds all right, title and interest in and to each Mortgage
Loan. The Seller shall take all actions necessary to transfer record ownership
to the Purchaser or its designee, and immediately upon the transfer and
assignment of such Mortgage Loan as contemplated herein, the Purchaser will have
good legal title to and will be the sole legal owner of each Mortgage Loan free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest. Immediately prior to the transfer and
assignment to the Purchaser or its designee on the related Closing Date, the
Mortgage Loan, including the Mortgage Note and the Mortgage, was not subject to
an assignment or pledge. After the Closing Date, the Seller will have no right
to modify or alter the terms of the sale of the Mortgage Loan and the Seller
will have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement, or as otherwise
agreed to by the Seller and the Purchaser;

         (m) Each Mortgage Loan that is not a Co-op Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to FNMA or FHLMC, issued by a title insurer acceptable to
FNMA or FHLMC and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring (subject to the exceptions contained in
(b)(1), (2) and (3) above) the Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan. Where required by applicable state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier

<PAGE>

of the required mortgage title insurance. The Seller, its successors and
assigns, are the sole insureds of such lender's title insurance policy, such
title insurance policy has been duly and validly endorsed to the Purchaser or
the assignment to the Purchaser of the Seller's interest therein does not
require the consent of or notification to the insurer and such lender's title
insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this Agreement.
No claims have been made under such lender's title insurance policy, and no
prior holder of the related Mortgage, including the Seller has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy;

         (n) There is no default, Breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, Breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, Breach, violation or event permitting acceleration;

         (o) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;

         (p) All improvements subject to the Mortgage which were considered in
determining the appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) except for DE MINIMIS
encroachments permitted by the FNMA Guide and which have been noted on the
appraisal or the title policy affirmatively insures against loss or damage by
reason of any violation, variation or encroachment or adverse circumstance which
is either disclosed or would have been disclosed by an accurate survey, and no
improvements on adjoining properties encroach upon the Mortgaged Property except
those which are insured against by the title insurance policy referred to in
clause (m) above or are acceptable under FNMA or FHLMC guidelines and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;

         (q) The Mortgage Loan was originated by or for Market Street Mortgage
Corporation. The Mortgage Loan complies with all the terms, conditions and
requirements of Market Street Mortgage Corporation's Underwriting Standards in
effect at the time of origination of such Mortgage Loan unless otherwise
negotiated by and agreed to by the Seller and the Purchaser. The Mortgage Notes
and Mortgages (exclusive of any riders) are on forms generally acceptable to
FNMA or FHLMC. The Seller is currently selling loans to FNMA and/or FHLMC which
are the same document forms as the Mortgage Notes and Mortgages (inclusive of
any riders). The Mortgage Loan bears interest at a fixed rate as set forth in
the Mortgage Loan Schedule, and Monthly Payments under the Mortgage Note are due
and payable on the first day of each month. The Mortgage contains the usual and
enforceable provisions of the originator at the time of origination for the
acceleration of the payment of the unpaid principal amount of the Mortgage Loan
if the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;

         (r) The Mortgaged Property is not subject to any material damage by
waste, fire, earthquake, windstorm, flood or other casualty. At origination of
the Mortgage Loan there was, and

<PAGE>

there currently is, no proceeding pending for the total or partial condemnation
of the Mortgaged Property. There have not been any condemnation proceedings with
respect to the Mortgaged Property and to the best of the Seller's knowledge
there are no such proceedings scheduled to commence at a future date;

         (s) The related Mortgage contains 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, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;

         (t) If the Mortgage constitutes a deed of trust, a trustee, authorized
and duly qualified if required under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;

         (u) The Servicing File contains an appraisal of the related Mortgaged
Property signed prior to the final approval of the mortgage loan application by
a Qualified Appraiser, approved by the originator of the Mortgage Loan, 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, and the appraisal and appraiser both
satisfy the requirements of FNMA or FHLMC and Title XI of the Federal
Institutions Reform, Recovery and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated. The appraisal is in a form acceptable to FNMA or FHLMC and was made
by a Qualified Appraiser;

         (v) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (A) in compliance with any and
all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or otherwise exempt from
such qualification or licensing, or (4) not doing business in such state;

         (w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

         (x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;

         (y) The Mortgage Loan does not contain "graduated payment" features; to
the extent any Mortgage Loan contains any buydown provision, such buydown funds
have been maintained and

<PAGE>

administered in accordance with, and such Mortgage Loan otherwise complies with,
FNMA/FHLMC requirements relating to buydown loans;

         (z) The Mortgagor is not in bankruptcy or insolvent and the Seller has
no knowledge of any circumstances or condition with respect to the Mortgage, the
Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that could
reasonably be expected to cause investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
materially adversely affect the value or marketability of the Mortgage Loan;

         (aa) The Mortgage Loans are fixed rate mortgage loans. The Mortgage
Loans have an original term to maturity of not more than 30 years, with interest
payable in arrears on the first day of each month. Each Mortgage Note requires a
monthly payment which is sufficient to fully amortize the original principal
balance over the original term thereof and to pay interest at the related
Mortgage Interest Rate. No Mortgage Loan contains terms or provisions which
would result in negative amortization;

         (bb) Except for Mortgage Loans underwritten in accordance with a Lender
Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV greater
than 80%, the excess of the principal balance of the Mortgage Loan over 75% of
the Appraised Value, with respect to a Refinanced Mortgage Loan, or the lesser
of the Appraised Value or the purchase price of the Mortgaged Property, with
respect to a purchase money Mortgage Loan, is and will be insured as to payment
defaults by a Primary Mortgage Insurance Policy issued by a Qualified Insurer.
All provisions of such Primary Mortgage Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. No action, inaction, or event has occurred and no
state of facts exists that has, or will result in the exclusion from, denial of,
or defense to coverage. Any Mortgage Loan subject to a Primary Mortgage
Insurance Policy obligates the Mortgagor thereunder to maintain the Primary
Mortgage Insurance Policy and to pay all premiums and charges in connection
therewith. The mortgage interest rate for the Mortgage Loan as set forth on the
Mortgage Loan Schedule is net of any such insurance premium;

         (cc) The assignment of mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;

         (dd) As to Mortgage Loans that are not Co-op Loans and that are not
secured by an interest in a leasehold estate, the Mortgaged Property is located
in the state identified in the Mortgage Loan Schedule and consists of a single
parcel of real property with a detached single family residence erected thereon,
or a townhouse, 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 de minimis planned unit development, or a non-warrantable
condominium, or manufactured home, if such manufactured home meets the FNMA and
FHLMC manufactured housing guidelines, provided, however, that no residence or
dwelling is a single parcel of real property with a cooperative housing
corporation erected thereon. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination no portion of the Mortgaged Property has been used for commercial
purposes, except for incidental uses which are in accordance with FNMA or FHLMC
guidelines;

<PAGE>

         (ee) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the funds were disbursed in connection with the Mortgage
Loan. The Mortgage Note is payable on the first day of each month in equal
monthly installments of principal and interest, 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;

         (ff) As of the date of origination of the Mortgage Loan, the Mortgaged
Property was lawfully occupied under applicable law, and all inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Properly 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;

         (gg) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), or stock in a
cooperative housing corporation, such condominium, cooperative or planned unit
development project meets the Seller's eligibility requirements as set forth in
Market Street Mortgage Corporation's underwriting guidelines;

         (hh) There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation, to the best of the Seller's
knowledge, of any environmental law, rule or regulation with respect to the
Mortgaged Property; and nothing further remains to be done to satisfy in full
all requirements of each such law, rule or regulation constituting a
prerequisite to use and enjoyment of said property;

         (ii) The Mortgagor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;

         (jj) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange
of a Mortgaged Property;

         (kk) No action has been taken or failed to be taken by the Seller on or
prior to the related Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller or for any other reason under such coverage;

         (ll) Each Mortgage Loan has been serviced in all material respects in
compliance with Accepted Servicing Practices;

         (mm) With respect to each Co-op Loan, the related Mortgage is a valid,
enforceable and subsisting first security interest on the related cooperative
shares securing the related cooperative note, subject only to (a) liens of the
cooperative for unpaid assessments representing the Mortgagor's pro rata share
of the cooperative's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is

<PAGE>

commonly subject and (b) other matters to which like collateral is commonly
subject which do not materially interfere with the benefits of the security
intended to be provided by the security agreement. There are no liens against or
security interest in the cooperative shares relating to each Co-op Loan (except
for unpaid maintenance, assessments and other amounts owed to the related
cooperative which individually or in the aggregate will not have a material
adverse effect on such Co-op Loan), which have priority over the Seller's
security interest in such cooperative shares;

         (nn) With respect to each Co-op Loan, a search for filings of financing
statements has been made by a company competent to make the same, which company
is acceptable to FNMA and qualified to do business in the jurisdiction where the
cooperative unit is located, and such search has not found anything which would
materially and adversely affect the Co-op Loan;

         (oo) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the
Internal Revenue Code, and is in material compliance with applicable federal,
state and local laws which, if not complied with, could have a material adverse
effect on the Mortgaged Property;

         (pp) With respect to each Co-op Loan, there is no prohibition against
pledging the shares of the cooperative corporation or assigning the Co-op Lease;

         (qq) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority;

         (rr) With respect to any ground lease to which a Mortgaged Property may
be subject: (i) a true, correct and complete copy of the ground lease and all
amendments, modifications and supplements thereto is included in the Mortgage
File and the Mortgagor is the owner of a valid and subsisting leasehold interest
under such ground lease; (ii) such ground lease is in full force and effect,
unmodified and not supplemented by any writing or otherwise, except as contained
in the Mortgage File; (iii) all rent, additional rent and other charges reserved
therein have been fully paid to the extent payable as of the related Closing
Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of the
leasehold estate, subject to any sublease; (v) the Mortgagor is not in default
under any of the terms of such ground lease, and there are no circumstances
which, with the passage of time or the giving of notice, or both, would result
in a default under such ground lease; (vi) the lessor under such ground lease is
not in default under any of the terms or provisions of such ground lease on the
part of the lessor to be observed or performed; (vii) the lessor under such
ground lease has satisfied any repair or construction obligations due as of the
related Closing Date pursuant to the terms of such ground lease; and (viii) the
execution, delivery and performance of the Mortgage do not require the consent
(other than those consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or cause a default
under, such ground lease;

         (ss) With respect to any broker fees collected and paid on any of the
Mortgage Loans, all broker fees have been properly assessed to the borrower and
no claims will arise as to broker fees that are double charged and for which the
borrower would be entitled to reimbursement;

<PAGE>

         (tt) With respect to any Mortgage Loan as to which an affidavit has
been delivered to the Purchaser certifying that the original Mortgage Note has
been lost or destroyed and not been replaced, if such Mortgage Loan is
subsequently in default, the enforcement of such Mortgage Loan will not be
materially adversely affected by the absence of the original Mortgage Note;

         (uu) Each Mortgage Loan constitutes a qualified mortgage under Section
860G(a)(3)(A) of the Code and Treasury Regulations Section 1.860G-2(a)(1); and

         (vv) Except as provided in Section 2.07, the Mortgage Note, the
Mortgage, the Assignment and the other documents set forth in Exhibit A and
required to be delivered on the related Closing Date have been delivered to the
Purchaser or its designee.

         Additionally, with respect to each Mortgage Loan Package, the Seller,
jointly and severally, hereby makes all of the representations and warranties to
the Purchaser which are listed in Exhibit B attached to the related Assignment
and Conveyance Agreement.

<PAGE>

                                EQUITY ONE, INC.
                                ----------------

                        REPRESENTATIONS AND WARRANTIES OF
                                 MORTGAGE LOANS

         Section 3.02 Representations and Warranties as to Individual Mortgage
Loans.

         References in this Section to percentages of Mortgage Loans refer in
each case to the percentage of the aggregate principal balance of the Mortgage
Loans as of the Cut-off Date, based on the outstanding balances of the Mortgage
Loans as of the Cut-off Date, and giving effect to scheduled Monthly Payments
due on or prior to the Cut-off Date, whether or not received. References to
percentages of Mortgaged Properties refer, in each case, to the percentages of
expected aggregate principal balances of the related Mortgage Loans (determined
as described in the preceding sentence). The Seller hereby represents and
warrants to the Purchaser, as to each Mortgage Loan, as of the Closing Date as
follows:

         (a) The information set forth in the Mortgage Loan Schedule, including
any diskette or other related data tapes sent to the Purchaser, is complete,
true and correct in all material respects as of the Cut-Off Date;

         (b) With respect to a Mortgage Loan that is not a Co-op Loan, the
Mortgage creates a first lien or a first priority ownership interest in an
estate in fee simple in real property securing the related Mortgage Note. With
respect to a Mortgage Loan that is a Co-op Loan, the Mortgage creates a first
lien or a first priority ownership interest in the stock ownership and leasehold
rights associated with the cooperative unit securing the related Mortgage Note;

         (c) All payments due prior to the Cut-off Date for such Mortgage Loan
have been made as of the Closing Date, the Mortgage Loan is not delinquent in
payment more than 30 days and has not been dishonored; there are no material
defaults under the terms of the Mortgage Loan; the Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds from a
party other than the owner of the Mortgaged Property subject to the Mortgage,
directly or indirectly, for the payment of any amount required by the Mortgage
Loan; and there has been no more than one delinquency during the preceding
twelve-month period, and such delinquency did not last more than 30 days;

         (d) There are no defaults by Seller in complying with the terms of the
Mortgage, and all taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or escrow funds have been established in an
amount sufficient to pay for every such escrowed item which remains unpaid and
which has been assessed but is not yet due and payable;

         (e) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the

<PAGE>

extent any such recordation is required by law, or, necessary to protect the
interest of the Purchaser. No instrument of waiver, alteration or modification
has been executed, and no Mortgagor has been released, in whole or in part, from
the terms thereof except in connection with an assumption agreement and which
assumption agreement is part of the Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule; the substance of any such waiver,
alteration or modification has been approved by the issuer of any related
Primary Mortgage Insurance Policy and title insurance policy, to the extent
required by the related policies;

         (f) The Mortgage Note and the Mortgage are not subject to any 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 the
Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim or defense has
been asserted with respect thereto; and the Mortgagor was not a debtor in any
state or federal bankruptcy or insolvency proceeding at the time the Mortgage
Loan was originated;

         (g) All buildings or other customarily insured improvements upon the
Mortgaged Property are insured by an insurer acceptable under the FNMA Guides,
against loss by fire, hazards of extended coverage and such other hazards as are
provided for in the FNMA Guides or by FHLMC, as well as all additional
requirements set forth in Section 4.10 of this Agreement. All such standard
hazard policies are in full force and effect and on the date of origination
contained a standard mortgagee clause naming the Seller and its successors in
interest and assigns as loss payee and such clause is still in effect and all
premiums due thereon have been paid. If required by the Flood Disaster
Protection Act of 1973, as amended, the Mortgage Loan is covered by a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration which policy conforms to FNMA and FHLMC
requirements, as well as all additional requirements set forth in Section 4.10
of this Agreement. Such policy was issued by an insurer acceptable under FNMA or
FHLMC guidelines. 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 the Mortgagor's cost and expense and to seek reimbursement therefor
from the Mortgagor;

         (h) 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 or disclosure
laws applicable to the Mortgage Loan have been complied with in all material
respects;

         (i) The Mortgage has not been satisfied, canceled or subordinated, in
whole or in part, or rescinded, 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 release, cancellation, subordination or
rescission. The Seller has not waived the performance by the Mortgagor of any
action, if the Mortgagor's failure to perform such action would cause the
Mortgage Loan to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Mortgagor;

<PAGE>

         (j) The Mortgage is a valid, subsisting, enforceable and perfected
first lien on the Mortgaged Property, including for Mortgage Loans that are not
Co-op Loans, all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such lien
is free and clear of all adverse claims, liens and encumbrances having priority
over the first lien of the Mortgage subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording which are
acceptable to mortgage lending institutions generally and either (A) which are
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan, or (B) which do not adversely affect the appraised value of
the Mortgaged Property as set forth in such appraisal, and (3) other matters to
which like properties are commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein, and the Seller has the full right to
sell and assign the same to the Purchaser;

         (k) The Mortgage Note and the related Mortgage are original and genuine
and each is the legal, valid and binding obligation of the maker thereof,
enforceable in all respects in accordance with its terms subject to bankruptcy,
insolvency and other laws of general application affecting the rights of
creditors and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the
Mortgage have been duly and properly executed by such parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of Seller or the Mortgagor, or, on the
part of any other party involved in the origination of the Mortgage Loan. The
proceeds of the Mortgage Loan have been fully disbursed and 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 the Mortgage Loan and the recording of the
Mortgage were paid or are in the process of being paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;

         (l) The Seller or its affiliate is the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by the Mortgage Note, except
for the assignments of mortgage which have been sent for recording, and upon
recordation the Purchaser or its designee will be the owner of record of the
Mortgage and the indebtedness evidenced by the Mortgage Note, and upon the sale
of the Mortgage Loan to the Purchaser, the Seller will retain the Mortgage File
or any part thereof with respect thereto not delivered to the Purchaser or the
Purchaser's designee in trust only for the purpose of servicing and supervising
the servicing of the Mortgage Loan, immediately prior to the transfer and
assignment to the Purchaser on the Closing Date, the Mortgage Loan, including
the

<PAGE>

Mortgage Note and the Mortgage, were not subject to an assignment or pledge, and
the Seller had good and marketable title to and was the sole owner thereof and
had 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 has the full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign the
Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of servicing the
Mortgage Loan as set forth in this Agreement. After the Closing Date, the Seller
will have no right to modify or alter the terms of the sale of the Mortgage Loan
and the Seller will have no obligation or right to repurchase the Mortgage Loan
or substitute another Mortgage Loan, except as provided in this Agreement, or as
otherwise agreed to by the Seller and the Purchaser;

         (m) Each Mortgage Loan that is not a Co-op Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy or
insurance acceptable to FNMA or FHLMC, issued by a title insurer acceptable to
FNMA or FHLMC and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring (subject to the exceptions contained in
(j)(l), (2) and (3) above) the Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan. Where required by state law or regulation, the Mortgagor has been
given the opportunity to choose the carrier of the required mortgage title
insurance. The Seller, its successors and assigns, are the sole insureds of such
lender's title insurance policy, such title insurance policy has been duly and
validly endorsed to the Purchaser or the assignment to the Purchaser of the
Seller's interest therein does not require the consent of or notification to the
insurer and such lender's title insurance policy is in full force and effect and
will be in full force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;

         (n) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event permitting
acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;

         (o) There are no mechanics' or similar liens or claims which have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to or equal to the lien of the related Mortgage;

         (p) All improvements subject to the Mortgage which were considered in
determining the appraised value of the Mortgaged Property lie wholly within the
boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) and no improvements on
adjoining properties encroach upon the Mortgaged Property except those which are
insured against by the title insurance policy referred to in clause (in) above
and all

<PAGE>

improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;

         (q) The Mortgage Loan was originated by or for the Seller. The Mortgage
Loan complies with all the terms, conditions and requirements of the Seller's
Underwriting Standards in effect at the time of origination of such Mortgage
Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on forms
generally acceptable to FNMA or FHLMC. Seller is approved to sell loans to FNMA
and/or FHLMC which are the same document forms as the Mortgage Notes and
Mortgages (inclusive of any riders). The Mortgage Loan bears interest at a fixed
rate as set forth in the Mortgage Loan Schedule, and Monthly Payments under the
Mortgage Note are due and payable on the first day of each month. The Mortgage
contains the usual and enforceable provisions of the originator at the time of
origination for the acceleration of the payment of the unpaid principal amount
of the Mortgage Loan if the related Mortgaged Property is sold without the prior
consent of the mortgagee thereunder;

         (r) The Mortgaged Property is not subject to any material damage by
waste, fire, earthquake, windstorm, flood or other casualty. At origination of
the Mortgage Loan there was, and there currently is, no proceeding pending for
the total or partial condemnation of the Mortgaged Property. There have not been
any condemnation proceedings with respect to the Mortgaged Property and there
are no such proceedings scheduled to commence at a future date;

         (s) The related Mortgage contains 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, (1) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (2) otherwise by judicial foreclosure. There is
no homestead or other exemption available to the Mortgagor which would interfere
with the right to sell the Mortgaged Property at a trustee's sale or the right
to foreclose the Mortgage;

         (t) If the Mortgage constitutes a deed of trust, a trustee, authorized
and duly qualified if required under applicable law to act as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses, except as may be required by local law, are or will become
payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale or attempted sale after default by the
Mortgagor;

         (u) The Mortgage File contains an appraisal of the related Mortgaged
Property signed prior to the final approval of the mortgage loan application by
a Qualified Appraiser, approved by the Seller, 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, and the appraisal and appraiser both satisfy the requirements of
FNMA or FHLMC and Title XI of the Federal Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated. the appraisal is in a form
acceptable to FNMA or FHLMC and was made by a Qualified Appraiser;

         (v) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (A) in compliance with any and
all applicable licensing requirements of the laws of

<PAGE>

the state wherein the Mortgaged Property is located, and (B) (1) organized under
the laws of such state, or (2) qualified to do business in such state, or (3)
federal savings and loan associations or national banks or a Federal Home Loan
Bank or savings bank having principal offices in such state, or (4) not doing
business in such state;

         (w) The related Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

         (x) The Mortgagor has received all disclosure materials required by
applicable law with respect to the making of such mortgage loans;

         (y) The Mortgage Loan does not contain "graduated payment" features; to
the extent any Mortgage Loan contains any buydown provision, such buydown funds
have been maintained and administered in accordance with, and such Mortgage Loan
otherwise complies with, FNMA/FHLMC requirements relating to buydown loans;

         (z) The Mortgagor is not in bankruptcy and, the Mortgagor is not
insolvent or in bankruptcy and the Seller has no knowledge of any circumstances
or condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor
or the Mortgagor's credit standing that could reasonably be expected to cause
investors to regard the Mortgage Loan as an unacceptable investment, cause the
Mortgage Loan to become delinquent, or materially adversely affect the value or
marketability of the Mortgage Loan;

         (aa) The Mortgage Loans are fixed rate mortgage loans. The Mortgage
Loans have an original term to maturity of not more than 30 years, with interest
payable in arrears on the first day of each month. Each Mort-gage Note requires
a monthly payment which is sufficient to fully amortize the original principal
balance over the original term thereof and to pay interest at the related
Mortgage Interest Rate. No Mortgage Loan contains terms or provisions which
would result in negative amortization.

         (bb) Except for Mortgage Loans underwritten in accordance with the
Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan over
75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or the
lesser of the Appraised Value or the purchase price of the Mortgaged Property,
with respect to a purchase money Mortgage Loan, is and will be insured as to
payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified
Insurer. All provisions of such Primary Mortgage Insurance Policy have been and
are being complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;

<PAGE>

         (cc) The assignment of Mortgage is in recordable form and is acceptable
for recording under the laws of the jurisdiction in which the Mortgaged Property
is located;

         (dd) As to Mortgage Loans that are not Co-op Loans and that are not
secured by an interest in a leasehold estate, the Mortgaged Property is located
in the state identified in the Mortgage Loan Schedule and consists of a single
parcel of real property with a detached single family residence erected thereon,
or a townhouse, 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 de minimis planned unit development, provided, however, that no
residence or dwelling is a single parcel of real property with a cooperative
housing corporation erected thereon, or a mobile home. As of the date of
origination, no portion of the Mortgaged Property is used for commercial
purposes, and since the date or origination no portion of the Mortgaged Property
is used for commercial purposes;

         (ee) Principal payments on the Mortgage Loan commenced no more than
sixty (60) days after the funds were disbursed in connection with the Mortgage
Loan. The Mortgage Note is payable on the first day of each month in equal
monthly installments of principal and interest, 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;

         (ff) Certain Mortgage Loans as specified on the Mortgage Loan Schedule
may contain a Prepayment Penalty in an amount specified in the related Mortgage
Note or Mortgage.

         (gg) As of the date of origination of the Mortgage Loan, the Mortgage
Property was lawfully occupied under applicable law, and 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;

         (hh) If the Mortgaged Property is a condominium unit or a planned unit
development (other than a de minimis planned unit development), or stock in a
cooperative housing corporation, such condominium, cooperative or planned unit
development project meets Seller's eligibility requirements as set forth in
Seller's underwriting guidelines;

         (ii) There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property; and nothing further remains
to be done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to use and enjoyment of said property;

         (jj) The Mortgagor has not notified the Seller, and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;

         (kk) No Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange
of a Mortgaged Property;

<PAGE>

         (ll) No action has been taken or failed to be taken by Seller, on or
prior to the Closing Date which has resulted or will result in an exclusion
from, denial of, or defense to coverage under any Primary Mortgage Insurance
Policy (including, without limitation, any exclusions, denials or defenses which
would limit or reduce the availability of the timely payment of the full amount
of the loss otherwise due thereunder to the insured) whether arising out of
actions, representations, errors, omissions, negligence, or fraud of the Seller,
or for any other reason under such coverage;

         (mm) Each Mortgage Loan has been serviced in all material respects in
compliance with Accepted Servicing Practices;

         (nn) With respect to each Co-op Loan, the related Mortgage is a valid,
enforceable and subsisting first security interest on the related cooperative
shares securing the related cooperative note, subject only to (a) liens of the
cooperative for unpaid assessments representing the Mortgagor's pro rata share
of the cooperative's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Security Agreement.
There are no liens against or security interest in the cooperative shares
relating to each Co-op Loan (except for unpaid maintenance, assessments and
other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;

         (oo) With respect to each Co-op Loan, a search for filings of financing
statements has been made by a company competent to make the same, which company
is acceptable to FNMA and qualified to do business in the jurisdiction where the
cooperative unit is located, and such search has not found anything which would
materially and adversely affect the Co-op Loan;

         (pp) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the
Internal Revenue Code, and is in material compliance with applicable federal,
state and local laws which, if not complied with, could have a material adverse
effect on the Mortgaged Property;

         (qq) With respect to each Co-op Loan, there is no prohibition against
pledging the shares of the cooperative corporation or assigning the Co-op Lease;

         (rr) The Mortgage Loan was originated by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to sections 203 and 211 of
the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which is
supervised and examined by a federal or state authority; and

         (ss) With respect to any ground lease to which a Mortgaged Property may
be subject: (i) the Mortgagor is the owner of a valid and subsisting leasehold
interest under such ground lease: (ii) such ground lease is in full force and
effect, unmodified and not supplemented by any writing or otherwise; (iii) all
rent, additional rent and other charges reserved therein have been fully paid to
the extent payable as of the Closing Date; (iv) the Mortgagor enjoys the quiet
and peaceful possession

<PAGE>

of the leasehold estate, subject to any sublease; (v) the Mortgagor is not in
default under any of the terms of such ground lease, and there are no
circumstances which, with the passage of time or the giving of notice, or both,
would result in a default under such ground lease; (vi) the lessor under such
ground lease is not in default under any of the terms or provisions of such
ground lease on the part of the lessor to be observed or performed; (vii) the
lessor under such ground lease has satisfied any repair or construction
obligations due as of the Closing Date pursuant to the terms of such ground
lease; and (viii) the execution, delivery and performance of the Mortgage do not
require the consent (other than those consents which have been obtained and are
in full force and effect) under, and will not contravene any provision of or
cause a default under, such ground lease.

         (tt) With respect to any broker fees collected and paid on any of the
loans, all broker fees have been properly assessed to the borrower and no claims
will arise as to broker fees that are double charged and for which the borrower
would be entitled to reimbursement.

<PAGE>

                            AMERICAN HOME LOANS/CBSK
                            ------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for mere
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance with the
terms of the related Mortgage Note;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful terms have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled,

<PAGE>

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 release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that nonresidence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID [FIRST OR SECOND] LIEN. The Mortgage is a valid,
subsisting enforceable and perfected [first or second] lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
                  assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
                  way, easements and other matters of the public record as of
                  the date of recording acceptable to mortgage lending
                  institutions generally and specifically referred to in the
                  lender's title insurance policy delivered to the originator of
                  the Mortgage Loan and (i) referred to or to otherwise
                  considered in the appraisal made for the originator of the
                  Mortgage Loan or (ii) which do not adversely affect the
                  appraised value of the Mortgaged Property set forth in such
                  appraisal;

                           (3) other matters to which like properties are
                  commonly subject which do not materially interfere with the
                  benefits of the security intended to be provided by the
                  Mortgage or the use, enjoyment, value or marketability of the
                  related Mortgaged Property; and

                           (4) with respect to each Second Lien Mortgage a prior
                  mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan,

<PAGE>

in either case, on the property described therein and the Seller has full right
to sell and assign the same to the Purchaser. The Mortgaged Property was not, as
of the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. The documents, instruments and agreements submitted
for loan underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading. No
fraud, error, negligence, misrepresentation or omission of fact with respect to
a Mortgage Loan has taken place on the part of the Seller or the Mortgagor or
any other party involved in the origination or servicing of the Mortgage Loan.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;

                  (1) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

<PAGE>

                  (o) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than ___%. The LTV of the Mortgage Loan either is
not more than 80% or the excess over 75% of the Appraised Value is and will be
insured as to payment defaults by a Primary Mortgage Insurance Policy until the
LTV of such Mortgage Loan is reduced to 80%. All provisions of such Primary
Mortgage Insurance Policy have been and are being complied with, such policy is
in full force and effect, and all premiums due thereunder have been paid. No
action, inaction, or event has occurred and no state of facts exists that has,
or will result in the exclusion from, denial of, or defense to coverage. Any
Mortgage Loan subject to a Primary Mortgage Insurance Policy obligates the
Mortgagor thereunder to maintain the Primary Mortgage Insurance Policy and to
pay all premiums and charges in connection therewith. The Mortgage Interest Rate
for the Mortgage Loan as set forth on the Mortgage Loan Schedule is net of any
such insurance premium;

                  (p) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the [first or second] priority lien of the
Mortgage in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment,] subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (q) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the

<PAGE>

Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an
opportunity to cure any default by payment in full or otherwise under the prior
mortgage;

                  (r) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (s) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (t) ORIGINATION; PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is [the fixed interest rate set
forth in the Mortgage Note] [adjusted [semi-]annually on each Interest Rate
Adjustment Date to equal the Index plus the Gross Margin, rounded up or down to
the nearest 0.125%, subject to the Periodic Rate Cap and the Lifetime Rate Cap].
The Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest are subject to change due to
adjustments to the Mortgage Interest Rate on each, 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, rounded up or down to the nearest 0.125%, subject
to the Periodic Rate Cap and the Lifetime Rate Cap];

                  (u) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (v) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

<PAGE>

                  (w) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
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;

                  (x) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (y) DEEDS OF TRUST. 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;

                  (z) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (aa) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (bb) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (cc) DUE ON SALE. 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;

                  (dd) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

<PAGE>

                  (ee) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ff) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second] lien priority by a title insurance policy,
an endorsement to the policy insuring the mortgagee's consolidated interest or
by other title evidence acceptable to Fannie Mae and Freddie Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;

                  (gg) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (hh) COLLECTION PRACTICES; ESCROW DEPOSITS[; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS]. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. [All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited];

                  (ii) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance

<PAGE>

with the Uniform Standards of Professional Appraisal Practice, any additional
requirements set forth for appraisals in EXHIBIT 2 hereof, and all applicable
Federal and state laws and regulations.

                  (jj) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (kk) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (ll) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (mm) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (nn) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons [and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts];

                  (oo) [MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;]

                  (pp) [RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of
1994;][Each Mortgage Loan classified as a "high cost" loan under Section 32 of
the Home Ownership and Equity Protection Act of 1994 complies with all
applicable rules and regulations with respect to disclosures and other
documentation;]

<PAGE>

                  (qq) [TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                  (a) all fees paid by the owner of the Mortgaged Property or
         such owner's spouse, to any person, that were necessary to originate,
         evaluate, maintain, record, insure or service the Mortgage Loan are
         reflected in the closing statement for such Mortgage Loan;

                  (b) the Mortgage Loan was closed only at the office of the
         mortgage lender, an attorney at law, or a title company;

                  (c) the Mortgagee has not been found by a federal regulatory
         agency to have engaged in the practice of refusing to make loans
         because the applicants for the loans reside or the property proposed to
         secure the loans is located in a certain area;

                  (d) the owner of the Mortgaged Property was not required to
         apply the proceeds of the Loan to repay another debt except debt
         secured by the Mortgaged Property or debt to a lender other than the
         Mortgagee;

                  (e) the owner of the Mortgaged Property did not sign any
         documents or instruments relating to the Loan in which blanks were left
         to be filled in; and

                  (f) if discussions between the Mortgagee and the Borrower were
         conducted primarily in a language other than English, the Mortgagee
         provided to the owner of the Mortgaged Property, prior to closing, a
         copy of the notice required by Section 50(g), Article XVI of the Texas
         Constitution translated into the written language in which the
         discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.]

                  (rr) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (ss) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

<PAGE>

                  (tt) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Each such prepayment fee is in an amount equal to
the maximum amount permitted under applicable law;

                  (uu) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser;

                  (vv) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (ww) [CLTV: EQUITY LTV. No Second Lien Mortgage Loan has a
CLTV in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;
and]

                  (xx) [CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File.The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
FNMA form 442 has been delivered to the Purchaser within sixty (60) days after
the Closing Date, the proceeds of the Mortgage Loan have been fully disbursed
and 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 the Mortgage Loan and the
recording of the Mortgage were paid or are in the process of being paid, and the
Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

                  (yy) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or otherwise exempt from
such qualification or licensing, or (4) not doing business in such state;

<PAGE>

                  (zz) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of such mortgage loans;

                  (aaa) The Mortgagor is not in bankruptcy or insolvent and the
Seller has no knowledge of any circumstances or condition with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit
standing that could reasonably be expected to cause investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or materially adversely affect the value or marketability of the
Mortgage Loan;

                  (bbb) The Mortgage Loans are fixed rate or adjustable rate
mortgage loans. The Mortgage Loans have an original term to maturity of not more
than 30 years, with interest payable in arrears on the first day of each month.
Each Mortgage Note requires a monthly payment which is sufficient to fully
amortize the original principal balance over the original term thereof and to
pay interest at the related Mortgage Interest Rate. No Mortgage Loan contains
terms or provisions which would result in negative amortization;

                  (ccc) The assignment of mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (ddd) Principal payments on the Mortgage Loan commenced no
more than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, 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;

                  (eee) Except for Mortgage Loans underwritten in accordance
with a Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an
LTV greater than 80%, the excess of the principal balance of the Mortgage Loan
over 75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or
the lesser of the Appraised Value or the purchase price of the Mortgaged
Property, with respect to a purchase money Mortgage Loan, is and will be insured
as to payment defaults by a Primary Mortgage Insurance Policy issued by a
Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy have
been and are being complied with, such policy is in full force and effect, and
all premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;

<PAGE>

                                      FGMC
                                      ----

                  Subsection 802. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Cut-off Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIENTAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-oft
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac. If upon origination of the Mortgage Loan, the
Mortgaged Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

<PAGE>

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual condominium unit in a low-rise condominium project,
or an individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
Fannie Mae requirements regarding such dwellings and that no residence or
dwelling is a mobile home or a manufactured dwelling. No portion of the
Mortgaged Property is used for commercial purposes;

                  (j) VALID [FIRST OR SECOND] LIEN. The Mortgage is a valid,
subsisting enforceable and perfected [first or second] lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
                  assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
                  way, easements and other matters of the public record as of
                  the date of recording acceptable to mortgage lending
                  institutions generally and specifically referred to in the
                  lender's title insurance policy delivered to the originator of
                  the Mortgage Loan and (i) referred to or to otherwise
                  considered in the appraisal made for the originator of the
                  Mortgage Loan or (ii) which do not adversely affect the
                  appraised value of the Mortgaged Property set forth in such
                  appraisal;

                           (3) other matters to which like properties are
                  commonly subject which do not materially interfere with the
                  benefits of the security intended to be provided by the
                  Mortgage or the use, enjoyment, value or marketability of the
                  related Mortgaged Property; and

                           (4) with respect to each Second Lien Mortgage a prior
                  mortgage lien on the Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B)

<PAGE>

second lien and second priority security interest with respect to each Second
Lien Mortgage Loan, in either case, on the property described therein and the
Seller has full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other security
instrument creating a lien subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. No statement, tape, diskette, form, report or other
document prepared by, or on behalf of, the Seller pursuant to this Agreement in
connection with the transactions contemplated hereby, contains or will contain
any statement that is or will be inaccurate or misleading in any material
respect, and all information supplied by, on behalf of, or concerning the
Mortgagor is true, accurate and complete and does not contain any statement that
is or will be inaccurate or misleading in any material respect. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein. The Seller has prudently originated and
underwritten each Mortgage Loan;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;

                  (o) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae

<PAGE>

or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie
Mac and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and assigns, as to the
[first or second] priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, and 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 Interest Rate and Monthly Payment,]
subject only to the exceptions contained in and clauses (1), (2), and (3), and
with respect to each Second Lien Mortgage Loan clause (4) of paragraph (j) of
this Section 8. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the Mortgage,
including the Seller, has done, by act or omission, anything which would impair
the coverage of such lender's title insurance policy including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;

                  (p) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;

                  (q) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (r) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (s) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development

<PAGE>

pursuant to Sections 203 and 211 of the National Housing Act or a savings and
loan association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a Federal or State authority.
The Mortgage Interest Rate is [the fixed interest rate set forth in the Mortgage
Note] [adjusted [semi-]annually on each Interest Rate Adjustment Date to equal
the Index plus the Gross Margin, rounded up or down to the nearest 0.125%,
subject to the Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime
Mortgage Interest Rate Cap]. The Mortgage Note is payable in equal monthly
installments of principal and interest, [which installments of interest are
subject to change due to adjustments to the Mortgage Interest Rate on each
Adjustable Rate Mortgage Loan,] 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 each Fixed Rate Mortgage Loan or over an original term of not
more than forty years from commencement of amortization with respect to each
Adjustable Rate Mortgage Loan, rounded up or down to the nearest 0.125%, subject
to the Initial Periodic Rate Cap, the Periodic Rate Cap and the Lifetime
Mortgage Interest Rate Cap];

                  (t) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

                  (u) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 8 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mac;

                  (v) OCCUPANCY OF THE MORTGAGED PROPERTY. The Mortgaged
Property is lawfully occupied under applicable law. 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;

                  (w) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (x) DEEDS OF TRUST. 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

<PAGE>

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;

                  (y) ACCEPTABLE INVESTMENT. The Seller has no knowledge of any
circumstances or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing that can reasonably
be expected to cause private institutional investors to regard the Mortgage Loan
as an unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan;

                  (z) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (aa) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

                  (bb) DUE ON SALE. 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;

                  (cc) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (dd) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ee) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first [or second] lien priority by a title insurance policy,
an endorsement to the

<PAGE>

policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to Fannie Mae and Freddie Mae. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;

                  (ff) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (gg) COLLECTION PRACTICES; ESCROW DEPOSITS[: ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS]. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. [All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited];

                  (hh) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by a qualified appraiser who (i) is licensed in the state where the
Mortgaged Property is located, (ii) has no interest, direct or indirect, in the
Mortgaged Property or in any Loan or the security therefor, and (iii) does not
receive compensation that is affected by the approval or disapproval of the
Loan. The appraisal shall have been made within ninety (90) days of the
origination of the Loan, be completed in compliance with the Uniform Standards
of Professional Appraisal Practice, any additional requirements set forth for
appraisals in EXHIBIT 2 hereof, and all applicable Federal and state laws and
regulations;

                  (ii) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (jj) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

<PAGE>

                  (kk) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (ll) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (mm) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons [and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts];

                  (nn) [MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of adjustable rate
mortgage loans. The Seller shall maintain such statement in the Mortgage File;]

                  (oo) [RIEGLE ACT. None of the Mortgage Loans are classified as
"high cost" loans under the Home Ownership and Equity Protection Act of
l994;][Each Mortgage Loan classified as a "high cost" loan under Section 32 of
the Home Ownership and Equity Protection Act of 1994 complies with all
applicable rules and regulations with respect to disclosures and other
documentation;]

                  (pp) [TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

<PAGE>

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.]

                  (qq) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (rr) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple interest Mortgage Loans;

                  (ss) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a prepayment fee feature, each such prepayment fee is enforceable and will
be enforced by the Seller, and each prepayment penalty is permitted pursuant to
federal, state and local law. Except as otherwise set forth on the Mortgage Loan
Schedule, with respect to each Mortgage Loan that contains a Prepayment Penalty,
such Prepayment Penalty is at least equal to the lesser of (A) the maximum
amount permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan;

                  (tt) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with a tax service company
reasonably accepted to the Purchaser on all of the Mortgage Loans and shall
assign all such contacts to the Purchaser;

                  (uu) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract for each
Mortgage Loan and shall assign all such contracts to the purchaser;

                  (vv) [CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a
CLTV in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%;]

<PAGE>

                  (ww) [CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File. The Mortgage
Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects
in accordance with its terms subject to bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors and by general equitable principles. All parties to the Mortgage Note
and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and
the Mortgage have been duly and properly executed by such parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place by the Seller or the Mortgagor, or,
on the part of any other party involved in the origination of the Mortgage Loan.
Except to the extent the Mortgage Loan is subject to completion escrows which
have been disclosed to and acknowledged by the Purchaser and which meet the
requirements of the Seller's Underwriting Standards, and as to which a completed
Fannie Mae form 442 has been delivered to the Purchaser within sixty (60) days
after the Closing Date, the proceeds of the Mortgage Loan have been fully
disbursed and 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 the Mortgage Loan and
the recording of the Mortgage were paid or are in the process of being paid, and
the Mortgagor is not entitled to any refund of any amounts paid or due under the
Mortgage Note or Mortgage;

                  (xx) PAYMENTS. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. The Mortgage Note is payable on the first day
of each month in equal monthly installments of principal and interest, 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 each Fixed Rate
Mortgage Loan or an original term of not more than forty years from commencement
of amortization with respect to each Adjustable Rate Mortgage Loan;

                  (yy) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV equal to or less than ___%. Except for Mortgage Loans underwritten in
accordance with a Lender Paid Mortgage Insurance Policy Program, if a Mortgage
Loan has an LTV greater than 80%, the excess of the principal balance of the
Mortgage Loan over 75% of the Appraised Value, with respect to a Refinanced
Mortgage Loan, or the lesser of the Appraised Value or the purchase price of the
Mortgaged Property, with respect to a purchase money Mortgage Loan, is and will
be insured as to payment defaults by a Primary Mortgage Insurance Policy issued
by a Qualified Insurer. All provisions of such Primary Mortgage Insurance Policy
have been and are being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. No action, inaction, or event
has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium; and

<PAGE>

                  (zz) SERVICING PRACTICES. Each Mortgage Loan has been serviced
in all material respects in compliance with those mortgage servicing practices
(including collection procedures) of prudent mortgage banking institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.

<PAGE>

                          CENDANT MORTGAGE CORPORATION
                          ----------------------------

                  Section 3.02 REPRESENTATIONS AND WARRANTIES AS TO INDIVIDUAL
MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser, as
to each Mortgage Loan, as of the Closing Date as follows:

                  (a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes sent to the Purchaser, is
complete, true and correct in all material respects as of the Cut-off Date;

                  (b) With respect to a first lien Mortgage Loan that is not a
Co-op Loan, the Mortgage creates a first lien or a first priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a first lien Mortgage Loan that is a Co-op Loan,
the Mortgage creates a first lien or a first priority ownership interest in the
stock ownership and leasehold rights associated with the cooperative unit
securing the related Mortgage Note;

                  (c) With respect to a second lien Mortgage Loan that is not a
Co-op Loan, the Mortgage creates a second lien or a second priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a second lien Mortgage Loan that is a Co-op Loan,
the Mortgage creates a second lien or a second priority ownership interest in
the stock ownership and leasehold rights associated with the cooperative unit
securing the related Mortgage Note;

                  (d) All payments due on or prior to the Cut-off Date for such
Mortgage Loan have been made as of the Closing Date, the Mortgage Loan is not
delinquent in payment more than 30 days and has not been dishonored; there are
no material defaults under the terms of the Mortgage Loan; the Seller has not
advanced funds, or induced, solicited or knowingly received any advance of funds
from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required by the
Mortgage Loan; and there has been no more than one delinquency"during the
preceding twelve-month period, and such delinquency did not last more than 30
days;

                  (e) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;

<PAGE>

                  (f) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed, and no
Mortgagor has been released, in whole or in part, from the terms thereof except
in connection with an assumption agreement and which assumption agreement is
part of the Mortgage File and the terms of which are reflected in the Mortgage
Loan Schedule; the substance of any such waiver, alteration or modification has
been approved by the issuer of any related Primary Mortgage Insurance Policy and
title insurance policy, to the extent required by the related policies;

                  (g) The Mortgage Note and the Mortgage are not subject to any
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 the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto; and the Mortgagor was not a
debtor in any state or federal bankruptcy or insolvency proceeding at the time
the Mortgage Loan was originated;

                  (h) All buildings or other customarily insured improvements
upon the Mortgaged Property are insured by an insurer acceptable under the
Fannie Mae Guides, against loss by fire, hazards of extended coverage and such
other hazards as are provided for in the Fannie Mae Guides or by Freddie Mac, as
well as all additional requirements set forth in Section 4.10 of this Agreement.
All such standard hazard policies are in full force and effect and on the date
of origination contained a standard mortgagee clause naming the Seller and its
successors in interest and assigns as loss payee and such clause is still in
effect and all premiums due thereon have been paid. If required by the Flood
Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration which policy conforms to Fannie Mae and Freddie
Mac requirements, as well as all additional requirements set forth in Section
4.10 of this Agreement. Such policy was issued by an insurer acceptable under
Fannie Mae or Freddie Mac guidelines. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and expense,
and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage
to maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;

                  (i) 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 or
disclosure laws applicable to the Mortgage Loan have been complied with in all
material respects;

                  (j) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, 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 release, cancellation,
subordination or rescission. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage

<PAGE>

Loan to be in default, nor has the Seller waived any default resulting from any
action or inaction by the Mortgagor;

                  (k) With respect to any first lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property and, with respect to any second lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected second lien
on the Mortgaged Property, including for Mortgage Loans that are not Co-op
Loans, all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such lien
is free and clear of all adverse claims, liens and encumbrances having priority
over the first or second lien, as applicable, of the Mortgage subject only to
(1) with respect to any second lien Mortgage Loan, the related First Lien, (2)
the lien of non-delinquent current real property taxes and assessments not yet
due and payable, (3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(4) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the Mortgage Loan
establishes and creates (1) with respect to any first lien Mortgage Loan, a
valid, subsisting, enforceable and perfected first lien and first priority
security interest and (2) with respect to any second lien Mortgage Loan, a
valid, subsisting, enforceable and perfected second lien and second priority
security interest, in each case, on the property described therein, and the
Seller has the full right to sell and assign the same to the Purchaser;

                  (l) The Mortgage Note and the related Mortgage are original
and genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms subject to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application affecting the rights of creditors and by general equitable
principles and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note and the
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the
Mortgage have been duly and properly executed by such parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of Seller or the Mortgagor, or, on the
part of any other party involved in the origination of the Mortgage Loan. The
proceeds of the Mortgage Loan have been fully disbursed and 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 the Mortgage Loan and the recording of the
Mortgage were paid or are in the process of being paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note or
Mortgage;

<PAGE>

                  (m) The Seller or its affiliate is the sole owner of record
and holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage
Note, and upon recordation the Purchaser or its designee will be the owner of
record of the Mortgage and the indebtedness evidenced by the Mortgage Note, and
upon the sale of the Mortgage Loan to the Purchaser, the Servicer will retain
the Servicing File in trust for the Purchaser only for the purpose of servicing
and supervising the servicing of the Mortgage Loan. Immediately prior to the
transfer and assignment to the Purchaser on the Closing Date, the Mortgage Loan,
including the Mortgage Note and the Mortgage, were not subject to an assignment
or pledge, and the Seller had good and marketable title to and was the sole
owner thereof and had 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 has the full right and authority subject to no interest
or participation of, or agreement with, any other party, to sell and assign the
Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of servicing the
Mortgage Loan as set forth in this Agreement;

                  (n) Each Mortgage Loan that is not a Co-op Loan is covered by
an ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to Fannie Mae or Freddie Mac, issued by a title
insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (k)(1), (2), (3) and (4) above) the Seller, its
successors and assigns, as to the first or second, as applicable, priority lien
of the Mortgage in the original principal amount of the Mortgage Loan. Where
required by applicable state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance. The
Seller, its successors and assigns, are the sole insureds of such lender's title
insurance policy, such title insurance policy has been duly and validly endorsed
to the Purchaser or the assignment to the Purchaser of the Seller's interest
therein does not require the consent of or notification to the insurer and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement and the related Purchase Price and Terms Letter. No claims have been
made under such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller, has done, by act or omission, anything
which would impair the coverage of such lender's title insurance policy;

                  (o) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Seller nor any prior mortgagee has
waived any default, breach, violation or event permitting acceleration. With
respect to each second lien Mortgage Loan, (i) the First Lien is in full force
and effect, (ii) there is no default, breach, violation or event of acceleration
existing under such prior mortgage or the related mortgage note, (iii) no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the prior mortgage contains a provision
which allows or (B) applicable law requires, the mortgagee under the second lien
Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the prior mortgage;

<PAGE>

                  (p) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the related
Mortgage;

                  (q) All improvements subject to the Mortgage which were
considered in determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit) and
no improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred to
in clause (m) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;

                  (r) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with all the terms, conditions and requirements of the
Seller's Underwriting Standards in effect at the time of origination of such
Mortgage Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on
forms generally acceptable to Fannie Mae or Freddie Mac. Seller is currently
selling loans to Fannie Mae and/or Freddie Mac which are the same document forms
as the Mortgage Notes and Mortgages (inclusive of any riders). The Mortgage Loan
bears interest at the Mortgage Interest Rate set forth in the Mortgage Loan
Schedule, and Monthly Payments under the Mortgage Note are due and payable on
the first day of each month. The Mortgage contains the usual and enforceable
provisions of the originator at the time of origination for the acceleration of
the payment of the unpaid principal amount of the Mortgage Loan if the related
Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;

                  (s) The Mortgaged Property is not subject to any material
damage by waste, fire, earthquake, windstorm, flood or other casualty. At
origination of the Mortgage Loan there was, and there currently is, no
proceeding pending for the total or partial condemnation of the Mortgaged
Property. There have not been any condemnation proceedings with respect to the
Mortgaged Property and there are no such proceedings scheduled to commence at a
future date;

                  (t) The related Mortgage contains 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. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee's sale or the right to foreclose the Mortgage;

                  (u) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;

                  (v) The Mortgage File contains an appraisal of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser, who had

<PAGE>

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, and the appraisal and appraiser both
satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of FIRREA and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated. The appraisal is in a form acceptable to Fannie
Mae or Freddie Mac;

                  (w) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) (A) in compliance with
any and all applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located, and (B) (1) organized under the laws of such
state, or (2) qualified to do business in such state, or (3) federal savings and
loan associations or national banks or a Federal Home Loan Bank or savings bank
having principal offices in such state, or (4) not doing business in such state;

                  (x) The related Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
above and such collateral does not serve as security for any other obligation;

                  (y) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of such mortgage loans;

                  (z) The Mortgage Loan does not contain "graduated payment"
features; to the extent any Mortgage Loan contains any buydown provision, such
buydown funds have been maintained and administered in accordance with, and such
Mortgage Loan otherwise complies with, Fannie Mae/Freddie Mac requirements
relating to buydown loans;

                  (aa) The Mortgagor is not in bankruptcy and, the Mortgagor is
not insolvent or in bankruptcy and the Seller has no knowledge of any
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor's credit standing that could reasonably be
expected to cause investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or materially
adversely affect the value or marketability of the Mortgage Loan;

                  (bb) The Fixed Rate Mortgage Loans have an original term to
maturity of not more than 30 years and the Adjustable Rate Mortgage Loans have
an original term to maturity of not more than 40 years, in each case, with
interest payable in arrears on the first day of each month. Each Mortgage Note
requires a monthly payment which is sufficient to fully amortize the original
principal balance over the original term thereof and to pay interest at the
related Mortgage Interest Rate. No Mortgage Loan contains terms or provisions
which would result in negative amortization.

                  (cc) Except for Mortgage Loans underwritten in accordance with
the Lender Paid Mortgage Insurance Policy Program, if a Mortgage Loan has an LTV
greater than 80%, the excess of the principal balance of the Mortgage Loan over
75% of the Appraised Value, with respect to a Refinanced Mortgage Loan, or the
lesser of the Appraised Value or the purchase price of the Mortgaged Property,
with respect to a purchase money Mortgage Loan, is and will be insured as to

<PAGE>

payment defaults by a Primary Mortgage Insurance Policy issued by a Qualified
Insurer. All provisions of such Primary Mortgage Insurance Policy have been and
are being complied with, such policy is in full force and effect, and all
premiums due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to a Primary
Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the
Primary Mortgage Insurance Policy and to pay all premiums and charges in
connection therewith. The mortgage interest rate for the Mortgage Loan as set
forth on the Mortgage Loan Schedule is net of any such insurance premium;

                  (dd) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;

                  (ee) As to Mortgage Loans that are not Co-op Loans and that
are not secured by an interest in a leasehold estate, the Mortgaged Property is
located in the state identified in the Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a townhouse, 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 de minimis planned unit development, provided, however,
that no residence or dwelling is a single parcel of real property with a
cooperative housing corporation erected thereon, or a mobile home. As of the
date of origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date or origination no portion of the
Mortgaged Property has been used for commercial purposes;

                  (ff) Principal payments on the Mortgage Loan commenced no more
than sixty (60) days after the funds were disbursed in connection with the
Mortgage Loan. The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, 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 each Fixed Rate Mortgage Loan or an
original term of not more than forty years from commencement of amortization
with respect to each Adjustable Rate Mortgage Loan;

                  (gg) With respect to each Mortgage Loan that contains a
Prepayment Penalty, such Prepayment Penalty is enforceable and will be enforced
by the Seller, and such Prepayment Penalty is permitted pursuant to federal,
state and local law. Except as otherwise set forth on the Mortgage Loan
Schedule, with respect to each Mortgage Loan that contains a Prepayment Penalty,
such Prepayment Penalty is at least equal to the lesser of (A) the maximum
amount permitted under applicable law and (B) six months interest at the related
Mortgage Interest Rate on the amount prepaid in excess of 20% of the original
principal balance of such Mortgage Loan;

                  (hh) As of the date of origination of the Mortgage Loan, the
Mortgaged Property was lawfully occupied under applicable law, and 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;

<PAGE>

                  (ii) If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development), or
stock in a cooperative housing corporation, such condominium, cooperative or
planned unit development project meets the Seller's eligibility requirements as
set forth in Seller's underwriting guidelines;

                  (jj) There is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental law,
rule or regulation is an issue; there is no violation of any environmental law,
rule or regulation with respect to the Mortgaged Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule or
regulation constituting a prerequisite to use and enjoyment of said property;

                  (kk) The Mortgagor has not notified the Seller, and the Seller
has no knowledge of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940;

                  (ll) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property or facilitating the
trade-in or exchange of a Mortgaged Property;

                  (mm) No action has been taken or failed to be taken by the
Seller on or prior to the Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller, or for any other reason under such coverage;

                  (nn) Each Mortgage Loan has been serviced in all material
respects in compliance with Accepted Servicing Practices;

                  (oo) With respect to each Co-op Loan, the related Mortgage is
a valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's pro
rata share of the cooperative's payments for its blanket mortgage, current and
future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;

                  (pp) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to Fannie Mae and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;

<PAGE>

                  (qq) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the Code,
and is in material compliance with applicable federal, state and local laws
which, if not complied with, could have a material adverse effect on the
Mortgaged Property;

                  (rr) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;

                  (ss) The Mortgage Loan was originated by a mortgagee approved
by the Secretary of Housing and Urban Development pursuant to sections 203 and
211 of the National Housing Act, a savings and loan association, a savings bank,
a commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;

                  (tt) With respect to any ground lease to which a Mortgaged
Property may be subject: (i) a true, correct and complete copy of the ground
lease and all amendments, modifications and supplements thereto is included in
the Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all rent, additional rent and
other charges reserved therein have been fully paid to the extent payable as of
the Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of
the leasehold estate, subject to any sublease; (v) the Mortgagor is not in
default under any of the terms of such ground lease, and there are no
circumstances which, with the passage of time or the giving of notice, or both,
would result in a default under such ground lease; (vi) the lessor under such
ground lease is not in default under any of the terms or provisions of such
ground lease on the part of the lessor to be observed or performed; (vii) the
lessor under such ground lease has satisfied any repair or construction
obligations due as of the Closing Date pursuant to the terms of such ground
lease; (viii) the execution, delivery and performance of the Mortgage do not
require the consent (other than those consents which have been obtained and are
in full force and effect) under, and will not contravene any provision of or
cause a default under, such ground lease; (ix) the ground lease term extends, or
is automatically renewable, for at least five years beyond the maturity date of
the related Mortgage Loan; and (x) the Purchaser has the right to cure defaults
on the ground lease;

                  (uu) With respect to any broker fees collected and paid on any
of the Mortgage Loans, all broker fees have been properly assessed to the
borrower and no claims will arise as to broker fees that are double charged and
for which the borrower would be entitled to reimbursement;

                  (vv) With respect to any Mortgage Loan as to which an
affidavit has been delivered to the Purchaser certifying that the original
Mortgage Note has been lost or destroyed and not been replaced, if such Mortgage
Loan is subsequently in default, the enforcement of such Mortgage Loan will not
be materially adversely affected by the absence of the original Mortgage Note;

                  (ww) Each Mortgage Loan constitutes a qualified mortgage under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.8600-2(a)(1);

<PAGE>

                  (xx) Except as provided in Section 2.07, the Mortgage Note,
the Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;

                  (yy) All information supplied by, on behalf of, or concerning
the Mortgagor is true, accurate and complete and does not contain any statement
that is or will be inaccurate or misleading in any material respect;

                  (zz) There does not exist on the related Mortgage Property any
hazardous substances, hazardous wastes or solid wastes, as such terms are
defined in the Comprehensive Environmental Response Compensation and Liability
Act, the Resource Conservation and Recovery Act of 1976, or other federal, state
or local environmental legislation;

                  (aaa) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect to the making of adjustable rate mortgage loans. The Servicer
shall maintain such statement in the Servicing File;

                  (bbb) No second lien Mortgage Loan has an LTV in excess of
100%. No second lien Mortgage Loan has an Equity LTV in excess of 100%;

                  (ccc) Either (a) no consent for the second lien Mortgage Loan
is required by the holder of the related first lien or (b) such consent has been
obtained and is contained in the Mortgage File;

                  (ddd) With respect to any second lien Mortgage Loan, the
Seller has not received notice of: (1) any proceeding for the total or partial
condemnation of any Mortgaged Property, (2) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting any
Mortgaged Property or (3) any default under any mortgage, lien or other
encumbrance senior to each Mortgage;

                  (eee) With respect to any second lien Mortgage Loan, where
required or customary in the jurisdiction in which the Mortgaged Property is
located, the original lender has filed for record a request for notice of any
action by the senior lienholder under the related First Lien, and the original
lender has notified any senior lienholder in writing of the existence of the
second lien Mortgage Loan and requested notification of any action to be taken
against the Mortgagor by the senior lienholder;

                  (fff) No second lien Mortgage Loan is a "home equity line of
credit";

                  (ggg) No Mortgage Loan had a Loan-to-Value Ratio at the time
of origination of more than 100%;

                  (hhh) As of the Closing Date, the Seller has not received a
notice of default of a First Lien which has not been cured; and

                  (iii) No First Lien provides for negative amortization.

<PAGE>

                       DOWNEY SAVINGS AND LOAN ASSN., F.A.
                       -----------------------------------

                  Subsection 8.02. REPRESENTATIONS AND WARRANTIES REGARDING
INDIVIDUAL MORTGAGE LOANS.

                  The Seller hereby represents and warrants to the Purchaser,
with respect to each Mortgage Loan, as of the related Closing Date or such other
date specified herein:

                  (a) MORTGAGE LOANS AS DESCRIBED. The information set forth in
the Mortgage Loan Schedule is complete, true and correct;

                  (b) PAYMENTS CURRENT. All payments required to be made up to
the related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note have been made and credited. No payment required under the Mortgage Loan is
delinquent nor has any payment under the Mortgage Loan been delinquent for more
than 30 days more than once in the 12 months preceding the related Closing Date.
The first and second Monthly Payments shall be made with respect to the Mortgage
Loan on its Due Date or within the grace period, all in accordance with the
terms of the related Mortgage Note;

                  (c) NO OUTSTANDING CHARGES. There are no defaults in complying
with the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments or
ground rents which 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
which remains unpaid and which 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 greater to the day which precedes by one month
the Due Date of the first installment of principal and interest, including,
without limitation, taxes and insurance payments, the Seller 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 under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;

                  (d) ORIGINAL TERMS UNMODIFIED. The terms of the Mortgage Note
and Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related Primary Mortgage Insurance Policy and the title
insurer, to the extent required by the 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 issuer of any
related Primary Mortgage Insurance Policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Purchaser and the terms of which are reflected in the
Mortgage Loan Schedule;

<PAGE>

                  (e) NO DEFENSES. The Mortgage Loan is not subject to any 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 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, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;

                  (f) HAZARD INSURANCE. Pursuant to the terms of the Mortgage,
all buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of
Fannie Mae and Freddie Mac in an amount not less than the greatest of (i) 100%
of the replacement cost of all improvements to the Mortgaged Property, (ii) the
outstanding principal balance of the Mortgage Loan, or (iii) the amount
necessary to avoid the operation of any co-insurance provisions with respect to
the Mortgaged Property, and consistent with the amount that would have been
required as of the date of origination in accordance with the required by Fannie
Mae and Freddie Mac. If upon origination of the Mortgage Loan, the Mortgaged
Property was in an area identified in the Federal Register 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 Flood Insurance
Administration is in effect which policy conforms to the requirements of Fannie
Mae and Freddie Mac. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such 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 an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid and
binding obligation of the insurer, is in full force and effect, and will be in
full force and effect and inure to the benefit of the Purchaser upon the
consummation of the transactions contemplated by this Agreement. The Seller has
not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;

                  (g) COMPLIANCE WITH APPLICABLE LAWS. 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 or disclosure laws applicable to the Mortgage Loan have
been complied with, and the Seller shall maintain in its possession, available

<PAGE>

for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Servicing Transfer Date, evidence of compliance with all such
requirements;

                  (h) NO SATISFACTION OF MORTGAGE. The Mortgage has not been
satisfied, canceled, 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
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;

                  (i) LOCATION AND TYPE OF MORTGAGED PROPERTY. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual residential condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development,
provided, however, that any condominium unit or planned unit development shall
conform with the applicable Fannie Mae requirements regarding such dwellings and
that no residence or dwelling is (i) a mobile home or (ii) a manufactured
dwelling unless such manufactured dwelling is (x) permanently affixed to the
Mortgaged Property, (y) considered real estate under applicable local law and
(z) conforms to all Fannie Mae requirements. No portion of the Mortgaged
Property is used for commercial purposes;

                  (j) VALID FIRST OR SECOND LIEN. The Mortgage is a valid,
subsisting enforceable and perfected first or second lien on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:

                           (1) the lien of current real property taxes and
         assessments not yet due and payable;

                           (2) covenants, conditions and restrictions, rights of
         way, easements and other matters of the public record as of the date of
         recording acceptable to mortgage lending institutions generally and
         specifically referred to in the lender's title insurance policy
         delivered to the originator of the Mortgage Loan and (i) referred to or
         otherwise considered in the appraisal made for the originator of the
         Mortgage Loan or (ii) which do not adversely affect the appraised value
         of the Mortgaged Property set forth in such appraisal;

                           (3) other matters to which like properties are
         commonly subject which do not materially interfere with the benefits of
         the security intended to be provided by the Mortgage or the use,
         enjoyment, value or marketability of the related Mortgaged Property;
         and

                           (4) with respect to each Second Lien Mortgage a prior
         mortgage lien on the Mortgaged Property.

<PAGE>

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (A) first lien and first priority security interest
with respect to each First Lien Mortgage Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Mortgage Loan, in
either case, on the property described therein and the Seller has full right to
sell and assign the same to the Purchaser. The Mortgaged Property was not, as of
the date of origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to secure debt or other security instrument creating a lien
subordinate to the lien of the Mortgage;

                  (k) VALIDITY OF MORTGAGE DOCUMENTS. The Mortgage Note and the
Mortgage are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms. All parties to the
Mortgage Note and the Mortgage and any other related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Note and the Mortgage and any other related agreement, and the Mortgage Note and
the Mortgage and any other related agreement have been duly and properly
executed by such parties. The documents, instruments and agreements submitted
for loan underwriting were not falsified and contain no untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the information and statements therein not misleading. No
fraud, error, negligence, misrepresentation or omission of fact with respect to
a Mortgage Loan has taken place on the part of the Seller or the Mortgagor or
any other party involved in the origination or servicing of the Mortgage Loan.
The Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;

                  (l) FULL DISBURSEMENT OF PROCEEDS. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

                  (m) OWNERSHIP. The Seller is the sole owner of record and
holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and
the Seller has good and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan therein to the Purchaser free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;

                  (n) DOING BUSINESS. All parties which have had any interest in
the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, 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 laws
of the state wherein the Mortgaged Property is located, and (2) organized under
the laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and

<PAGE>

loan associations or national banks having principal offices in such state, or
(5) not doing business in such state;

                  (o) LTV, PRIMARY MORTGAGE INSURANCE POLICY. The Mortgage Loan
has an LTV as set forth on the related Mortgage Loan Schedule. With respect to
each Mortgage Loan which the related Mortgage Loan Schedule indicates has a
Primary Mortgage Insurance Policy: (i) all provisions of such Primary Mortgage
Insurance Policy have been and are being complied with, such policy is in full
force and effect, and all premiums due thereunder have been paid, (ii) with
respect to any Primary Mortgage Insurance Policy for which the Seller is
responsible for payment of the premiums, all premiums have been paid, (iii) no
action, inaction, or event has occurred and no state of facts exists that has,
or will result in the exclusion from, denial of, or defense to coverage, (iv)
the Mortgagor thereunder is obligated to maintain the Primary Mortgage Insurance
Policy and to pay all premiums and charges in connection therewith and (iv) the
Mortgage Interest Rate for such Mortgage Loan as set forth on the Mortgage Loan
Schedule is net of any insurance premium for the Primary Mortgage Insurance
Policy.

                  (p) TITLE INSURANCE. The Mortgage Loan is covered by an ALTA
lender's title insurance policy or other generally acceptable form of policy of
insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer
acceptable to Fannie Mae or Freddie Mac and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the Seller, its
successors and assigns, as to the first or second priority lien of the Mortgage
in the original principal amount of the Mortgage Loan, and 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 Interest
Rate and Monthly Payment,] subject only to the exceptions contained in and
clauses (1), (2), and (3), and with respect to each Second Lien Mortgage Loan
clause (4) of paragraph (j) of this Section 8. Where required by state law or
regulation, the Mortgagor has been given the opportunity to choose the carrier
of the required mortgage title insurance. Additionally, such lender's title
insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in force
and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;

                  (q) NO DEFAULTS. There is no 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 default, breach, violation or event of
acceleration, and neither the Seller nor its predecessors have waived any
default, breach, violation or event of acceleration. With respect to each Second
Lien Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii)
there is no default, breach, violation or event of acceleration existing under
such prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would

<PAGE>

constitute a default, breach, violation or event of acceleration thereunder, and
either (A) the prior mortgage contains a provision which allows or (B)
applicable law requires, the mortgagee under the Second Lien Mortgage Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the prior mortgage;

                  (r) NO MECHANICS' LIENS. There are no mechanics' or similar
liens or claims which have been filed for work, labor or material (and no rights
are outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;

                  (s) LOCATION OF IMPROVEMENTS; NO ENCROACHMENTS. All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;

                  (t) ORIGINATION: PAYMENT TERMS. At the time the Mortgage Loan
was originated, the originator was a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to Sections 203 and 211 of the National
Housing Act or a savings and loan association, a savings bank, a commercial bank
or similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is either (i) with respect to each
fixed rate Mortgage Loan, the fixed interest rate set forth in the Mortgage Note
or (ii) with respect to each Adjustable Rate Mortgage Loan, adjusted
semi-annually on each Interest Rate Adjustment Date to equal the Index plus the
Gross Margin, rounded up or down to the nearest 0.125%, subject to the Periodic
Rate Cap and the Lifetime Rate Cap. Principal payments on the Mortgage Loan
commenced no more than sixty (60) days after the funds were disbursed in
connection with the Mortgage Loan. No Mortgage Loan contains terms or provisions
which would result in negative amortization. The Mortgage Note is payable in
equal monthly installments of principal and interest, 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 each Adjustable Rate Mortgage
Loan, the installments of interest are subject to change due to adjustments to
the Mortgage Interest Rate, rounded up or down to the nearest 0.125%, subject to
the Periodic Rate Cap and the Lifetime Rate Cap;

                  (u) CUSTOMARY PROVISIONS. The Mortgage contains 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, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor which would interfere with the right to
sell the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption;

<PAGE>

                  (v) CONFORMANCE WITH UNDERWRITING GUIDELINES. The Mortgage
Loan was underwritten in accordance with the Seller's underwriting guidelines in
effect at the time the Mortgage Loan was originated, a copy of which
underwriting guidelines are attached as EXHIBIT 3 hereto. The Mortgage Loan is
in conformity with the standards of Fannie Mae or Freddie Mac under one of their
respective home mortgage purchase programs (except that the principal balance of
certain Mortgage Loans may have exceeded the limits of Fannie Mae and Freddie
Mac) and the Mortgage Note and Mortgage are on forms acceptable to Fannie Mae or
Freddie Mae;

                  (w) OCCUPANCY OF THE MORTGAGED PROPERTY. As of the related
Closing Date the Mortgaged Property is lawfully occupied under applicable law.
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;

                  (x) NO ADDITIONAL COLLATERAL. The Mortgage Note is not and has
not been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in (j) above;

                  (y) DEEDS OF TRUST. 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;

                  (z) ACCEPTABLE INVESTMENT. The Mortgagor is not in bankruptcy
or insolvent and the Seller has no knowledge of any circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;

                  (aa) DELIVERY OF MORTGAGE DOCUMENTS. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered by the Seller under this Agreement have been delivered to the
Purchaser or its Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with EXHIBIT 2, except for such documents
the originals of which have been delivered to the Purchaser or its Custodian;

                  (bb) CONDOMINIUMS/PLANNED UNIT DEVELOPMENTS. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimus planned unit development) such condominium or planned unit development
project meets Fannie Mae eligibility requirements for sale to Fannie Mae or is
located in a condominium or planned unit development project which has received
Fannie Mae project approval and the representations and warranties required by
Fannie Mae with respect to such condominium or planned unit development have
been made and remain true and correct in all respects;

<PAGE>

                  (cc) DUE ON SALE. 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;

                  (dd) TRANSFER OF MORTGAGE LOANS. The Assignment of Mortgage is
in recordable form and is acceptable for recording under the laws of the
jurisdiction in which the Mortgaged Property is located;

                  (ee) NO BUYDOWN PROVISIONS; NO GRADUATED PAYMENTS OR
CONTINGENT INTERESTS. The Mortgage Loan does not contain provisions pursuant to
which Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor or anyone on behalf of
the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;

                  (ff) CONSOLIDATION OF FUTURE ADVANCES. Any future advances
made prior to the related 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.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority by a title insurance policy, an
endorsement to the policy insuring the mortgagee's consolidated interest or by
other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;

                  (gg) MORTGAGED PROPERTY UNDAMAGED. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended;

                  (hh) COLLECTION PRACTICES; ESCROW DEPOSITS; ADJUSTABLE RATE
MORTGAGE LOAN ADJUSTMENTS. The origination and collection practices used with
respect to the Mortgage Loan have been in accordance with Accepted Servicing
Practices and in all respects in compliance with all applicable laws and
regulations. With respect to escrow deposits and Escrow Payments (other than
with respect to Second Lien Mortgage Loans for which the mortgagee under the
prior mortgage lien is collecting Escrow Payments), all such payments are in the
possession of the Seller 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. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of

<PAGE>

the related Mortgage Note. Any interest required to be paid pursuant to state
and local law has been properly paid and credited;

                  (ii) APPRAISAL. The Seller has delivered to the Purchaser an
appraisal of the Mortgaged Property signed prior to the approval of the Mortgage
application by an appraiser qualified under Fannie Mae and Freddie Mac
guidelines who (i) is licensed in the state where the Mortgaged Property is
located, (ii) has no interest, direct or indirect, in the Mortgaged Property or
in any Loan or the security therefor, and (iii) does not receive compensation
that is affected by the approval or disapproval of the Loan. The appraisal shall
have been made within ninety (90) days of the origination of the Loan, be
completed in compliance with the Uniform Standards of Professional Appraisal
Practice, any additional requirements set forth for appraisals in EXHIBIT 2
hereof, and all applicable Federal and state laws and regulations.

                  (jj) SOLDIERS' AND SAILORS' RELIEF ACT. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;

                  (kk) ENVIRONMENTAL MATTERS. The Mortgaged Property is free
from any and all toxic or hazardous substances and there exists no violation of
any local, state or federal environmental law, rule or regulation. There is no
pending action or proceeding directly involving any Mortgaged Property of which
the Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of the Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;

                  (ll) NO CONSTRUCTION LOANS. No Mortgage Loan was made in
connection with (i) the construction or rehabilitation of a Mortgaged Property
or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

                  (mm) NO DENIAL OF INSURANCE. 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 pool insurance policy, special hazard insurance policy, Primary
Mortgage Insurance Policy or bankruptcy bond, 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 the
Seller or any designee of the Seller or any corporation in which the Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;

                  (nn) REGARDING THE MORTGAGOR. The Mortgagor is one or more
natural persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Fannie Mae
guidelines for such trusts;

                  (oo) MORTGAGOR ACKNOWLEDGMENT. The Mortgagor has executed a
statement to the effect that the Mortgagor has received all disclosure materials
required by applicable law with respect to the making of Adjustable Rate
Mortgage Loans. The Seller shall maintain such statement in the Mortgage File;

<PAGE>

                  (pp) RIEGLE ACT. Each Mortgage Loan classified as a "high
cost" loan under Section 32 of the Home Ownership and Equity Protection Act of
1994 complies with all applicable rules and regulations with respect to
disclosures and other documentation;

                  (qq) TEXAS HOME EQUITY LOANS. With respect to any Loan which
is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI
of the Texas Constitution applicable to Texas Home Equity Loans which were in
effect at the time of the origination of the Mortgage Loan have been complied
with. Specifically, without limiting the generality of the foregoing,

                           (a) all fees paid by the owner of the Mortgaged
         Property or such owner's spouse, to any person, that were necessary to
         originate, evaluate, maintain, record, insure or service the Mortgage
         Loan are reflected in the closing statement for such Mortgage Loan;

                           (b) the Mortgage Loan was closed only at the office
         of the mortgage lender, an attorney at law, or a title company;

                           (c) the Mortgagee has not been found by a federal
         regulatory agency to have engaged in the practice of refusing to make
         loans because the applicants for the loans reside or the property
         proposed to secure the loans is located in a certain area;

                           (d) the owner of the Mortgaged Property was not
         required to apply the proceeds of the Loan to repay another debt except
         debt secured by the Mortgaged Property or debt to a lender other than
         the Mortgagee;

                           (e) the owner of the Mortgaged Property did not sign
         any documents or instruments relating to the Loan in which blanks were
         left to be filled in; and

                           (f) if discussions between the Mortgagee and the
         Borrower were conducted primarily in a language other than English, the
         Mortgagee provided to the owner of the Mortgaged Property, prior to
         closing, a copy of the notice required by Section 50(g), Article XVI of
         the Texas Constitution translated into the written language in which
         the discussions were conducted.

All notices, acknowledgments and disclosure statements required by Section 50,
Article XVI of the Texas Constitution applicable to Texas Home Equity Loans are
contained in the Mortgage File for each such Mortgage Loan.

                  (rr) INSURANCE. The Seller has caused or will cause to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignments of
policies or interests therein, and establishments of coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser;

                  (ss) SIMPLE INTEREST MORTGAGE LOANS. None of the Mortgage
Loans are simple

<PAGE>

interest Mortgage Loans;

                  (tt) PREPAYMENT FEE. With respect to each Mortgage Loan that
has a Prepayment Fee feature, each such Prepayment Fee is enforceable and will
be enforced by the Seller for the benefit of DLJ, and each Prepayment Fee is
permitted pursuant to federal, state and local law. Each such Prepayment Fee is
in an amount equal to the maximum amount permitted under applicable law;

                  (uu) TAX SERVICE. The Seller shall have obtained a life of
loan, transferable real estate tax service contract with an Approved Tax Service
Contract Provider on all of the Mortgage Loans and shall assign all such
contracts to the Purchaser;

                  (vv) FLOOD CERTIFICATION CONTRACT. The Seller shall have
obtained a life of loan, transferable flood certification contract with an
Approved Flood Certification Contract Provider for each Mortgage Loan and shall
assign all such contracts to the purchaser;

                  (ww) CLTV; EQUITY LTV. No Second Lien Mortgage Loan has a CLTV
in excess of 100%. No Mortgage Loan has an Equity LTV in excess of 125%; and

                  (xx) CONSENT. Either (a) no consent for the Second Lien
Mortgage Loan is required by the holder of the related first lien or (b) such
consent has been obtained and is contained in the Mortgage File.<PAGE>   1

                                                                   Exhibit 10.20

                     Amendment to Assignment and Assumption
                                   Agreements

This Amendment to Assignment and Assumption Agreements between VoiceStream
Wireless Corporation ("VoiceStream") and Western Wireless Corporation ("WWC") is
made as of July 23, 2000.

WHEREAS, VoiceStream and WWC entered into certain Assignment and Assumption
Agreements dated May 3, 1999 (the "Assignment and Assumption Agreements") with
respect to the assignment by WWC and assumption by VoiceStream of certain
Employment Agreements (the "Employment Agreements") with respect to each of
Robert Stapleton, Cregg Baumbaugh, Robert Dotson and Tim Wong;

WHEREAS, VoiceStream and WWC wish to amend provisions of the Assignment and
Assumption Agreements in order to clarify the effect of such agreements.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, VoiceStream and WWC agree as follows:

1) Paragraph 1 of each of the respective Assignment and Assumption Agreements
shall be modified by adding the following language to the end of said paragraph:

        All references in the Employment Agreement to WWC shall be changed to
        VoiceStream; provided, that (a) the WWC Indemnification Agreement
        referenced in Paragraph 6 of the Employment Agreement shall contain to
        remain in effect, to the extent applicable, and (b) the confidentiality
        provisions in Paragraph 8 of the Employment Agreement shall continue to
        apply to WWC and its subsidiaries and the Employee.

<PAGE>   2
2) All other terms and conditions of the respective Assignment Agreements shall
remain unmodified and in full force and effect.

                                     Western Wireless Corporation

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

                                     VoiceStream Wireless Corporation

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00021-of-00352.parquet"}]]