Document:

EXECUTION COPY

                RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.

                                  as Depositor

                                       and

                            WILMINGTON TRUST COMPANY

                                as Owner Trustee

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

                      AMENDED AND RESTATED TRUST AGREEMENT

                         Dated as of September 27, 2002

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

                      Home Equity Loan-Backed Certificates,
                                 Series 2002-HS3

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                                Table of Contents

Section
Page
                                       ARTICLE 1
                                      Definitions

<S>     <C>                                                                                <C>
Section 1.01.     Definitions...............................................................1
Section 1.02.     Other Definitional Provisions.............................................1

                                      ARTICLE II
                                     Organization

Section 2.01.     Name......................................................................2
Section 2.02.     Office....................................................................2
Section 2.03.     Purposes and Powers.......................................................2
Section 2.04.     Appointment of Owner Trustee..............................................3
Section 2.05.     Initial Capital Contribution of Owner Trust Estate........................3
Section 2.06.     Declaration of Trust......................................................3
Section 2.07.     Liability of the Holders of the Certificates..............................4
Section 2.08.     Title to Trust Property...................................................4
Section 2.09.     Situs of Trust............................................................4
Section 2.10.     Representations and Warranties of the Depositor...........................5
Section 2.11.     Payment of Trust Fees.....................................................5

                                      ARTICLE III
                   Conveyance Of The Home Equity Loans; Certificates

Section 3.01.     Conveyance of The Home Equity Loans.......................................6
Section 3.02.     Initial Ownership.........................................................6
Section 3.03.     The Certificates..........................................................6
Section 3.04.     Authentication of Certificates............................................6
Section 3.05.     Registration of and Limitations on Transfer And Exchange of
                  Certificates..............................................................7
Section 3.06.     Mutilated, Destroyed, Lost or Stolen Certificates........................12
Section 3.07.     Persons Deemed Certificateholders........................................13
Section 3.08.     Access to List of Certificateholders' Names And Addresses................13
Section 3.09.     Maintenance of Office or Agency..........................................13
Section 3.10.     Certificate Paying Agent.................................................13
Section 3.11.     Cooperation..............................................................15
Section 3.12.     Additional Certificate Security Balances Upon Issuance of Capped
                  Funding Notes............................................................15
Section 3.13.     Subordination............................................................16
Section 3.14.     No Priority Among Certificates...........................................16

                                      ARTICLE IV
                         Authority And Duties Of Owner Trustee

Section 4.01.     General Authority........................................................16
Section 4.02.     General Duties...........................................................16

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Section 4.03.     Action Upon Instruction..................................................17
Section 4.04.     No Duties Except as Specified Under Specified Documents or In
                  Instructions.............................................................17
Section 4.05.     Restrictions.............................................................18
Section 4.06.     Prior Notice To Certificateholders and The Credit Enhancer With
                  Respect To Certain Matters...............................................18
Section 4.07.     Action by Certificateholders with Respect to Certain Matters.............19
Section 4.08.     Action By Certificateholders with Respect to Bankruptcy..................19
Section 4.09.     Restrictions on Certificateholders' Power................................19
Section 4.10.     Majority Control.........................................................19
Section 4.11.     Doing Business In Other Jurisdictions....................................19
Section 4.12.     Removal of Home Equity Loans.............................................19

                                       ARTICLE V
                              Application Of Trust Funds

Section 5.01.     Distributions............................................................20
Section 5.02.     Method Of Payment........................................................22
Section 5.03.     Signature On Returns.....................................................22
Section 5.04.     Statements To Certificateholders.........................................23
Section 5.05.     Tax Reporting............................................................23
Section 5.06.     Reports to the Master Servicer...........................................23

                                      ARTICLE VI
                             Concerning The Owner Trustee

Section 6.01.     Acceptance of Trusts And Duties..........................................23
Section 6.02.     Furnishing of Documents..................................................24
Section 6.03.     Representations and Warranties...........................................24
Section 6.04.     Reliance; Advice of Counsel..............................................25
Section 6.05.     Not Acting in Individual Capacity........................................26
Section 6.06.     Owner Trustee Not Liable for Certificates or Related Documents...........26
Section 6.07.     Owner Trustee May Own Certificates and Notes.............................26

                                      ARTICLE VII
                             Compensation Of Owner Trustee

Section 7.01.     Owner Trustee's Fees And Expenses........................................27
Section 7.02.     Indemnification..........................................................27

                                     ARTICLE VIII
                            Termination of Trust Agreement

Section 8.01.     Termination of Trust Agreement...........................................28
Section 8.02.     Additional Termination Requirements......................................29

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                                      ARTICLE IX
                Successor Owner Trustees and Additional Owner Trustees

Section 9.01.     Eligibility Requirements for Owner Trustee...............................30
Section 9.02.     Replacement of Owner Trustee.............................................30
Section 9.03.     Successor Owner Trustee..................................................31
Section 9.04.     Merger or Consolidation of Owner Trustee.................................31
Section 9.05.     Appointment of Co-Trustee or Separate Trustee............................31

                                       ARTICLE X
                                     Miscellaneous

Section 10.01.    Amendments...............................................................33
Section 10.02.    No Legal Title to Owner Trust Estate.....................................34
Section 10.03.    Limitations on Rights of Others..........................................34
Section 10.04.    Notices..................................................................34
Section 10.05.    Severability.............................................................35
Section 10.06.    Separate Counterparts....................................................35
Section 10.07.    Successors and Assigns...................................................35
Section 10.08.    No Petition..............................................................35
Section 10.09.    No Recourse..............................................................35
Section 10.10.    Headings.................................................................36
Section 10.11.    Governing Law............................................................36
Section 10.12.    Integration..............................................................36
Section 10.13.    Rights of Credit Enhancer to Exercise Rights of Certificateholders.......36

Signatures

EXHIBIT

Exhibit A - ...Form of Class SB Certificate                                            A-1
Exhibit B - ...Certificate of Trust of Home Equity Loan Trust 2002-HS3                 B-1
Exhibit C - ...Form of 144A Investment Representation                                  C-1
Exhibit D - ...Form of Investor Representation Letter                                  D-1
Exhibit E -  ..Form of Transferor Representation Letter                                E-1
Exhibit F - ...Form of Certificate of Non-Foreign Status                               F-1
Exhibit G - ...Form of ERISA Representation Letter                                     G-1
Exhibit H -    Form of Representation Letter                                           H-1
Exhibit I  -  .Form of Class R Certificates                                            I-1
Exhibit J-1  - Form of Transfer Affidavit and Agreement                                J-1-1
Exhibit J-2  - Form of Transferor Certificate                                          J-2-1

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<PAGE>

        This Amended and Restated  Trust  Agreement,  dated as of September  27,
2002 (as amended from time to time, this "Trust Agreement"), between RESIDENTIAL
FUNDING MORTGAGE SECURITIES II, INC., a Delaware corporation,  as depositor (the
"Depositor") and WILMINGTON TRUST COMPANY,  a Delaware banking  corporation,  as
owner trustee (the "Owner Trustee"),

                                       WITNESSETH THAT:

        WHEREAS,  the  Depositor  and the  Owner  Trustee  entered  into a trust
agreement  dated as of September 23, 2002, in connection with the formation of a
Delaware statutory trust (the "Original Trust Agreement"); and

        WHEREAS,  the  Depositor and the Owner Trustee wish to amend and restate
the Original Trust Agreement.

        NOW,  THEREFORE,  in  consideration  of  the  mutual  agreements  herein
contained, the Depositor and the Owner Trustee agree as follows:

                                    ARTICLE I

                                   Definitions

        Section  1.01.  Definitions.  For all purposes of this Trust  Agreement,
except as otherwise  expressly  provided herein or unless the context  otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture  dated  September 27, 2002
(the  "Indenture"),  between  Home Equity Loan Trust  2002-HS3,  as issuer,  and
JPMorgan  Chase Bank, as indenture  trustee.  All other  capitalized  terms used
herein shall have the meanings specified herein.

        Section 1.02. Other Definitional Provisions.
                      -----------------------------

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

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

        (c) The words  "hereof,"  "herein,"  "hereunder"  and  words of  similar
import when used in this Trust  Agreement shall refer to this Trust Agreement as

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a whole and not to any particular  provision of this Trust  Agreement;  Article,
Section and Exhibit references  contained in this Trust Agreement are references
to  Articles,  Sections  and  Exhibits  in or to  this  Trust  Agreement  unless
otherwise  specified;   the  term  "including"  shall  mean  "including  without
limitation";  and the term "proceeds" shall have the meaning ascribed thereto in
the UCC.

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

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

                                   ARTICLE II

                                  Organization

        Section  2.01.  Name.  The trust created  hereby (the "Trust")  shall be
known as "Home Equity Loan Trust  2002-HS3," in which name the Owner Trustee may
conduct  the  business  of the  Trust,  make and  execute  contracts  and  other
instruments on behalf of the Trust and sue and be sued.

        Section  2.02.  Office.  The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written  notice to the  Certificateholders
and the Depositor.

     Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in
the following activities:

     (a) to issue the  Notes  pursuant  to the  Indenture  and the  Certificates
pursuant to this Trust Agreement and to sell the Notes and the Certificates;

     (b) to  purchase  the  Home  Equity  Loans  and to pay the  organizational,
start-up and transactional expenses of the Trust;

        (c) to assign, grant, transfer,  pledge and convey the Home Equity Loans
pursuant  to  the  Indenture  and  to  hold,   manage  and   distribute  to  the
Certificateholders pursuant to Section 5.01 any portion of the Home Equity Loans
released from the Lien of, and remitted to the Trust pursuant to the Indenture;

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

        (e) to engage in those activities,  including  entering into agreements,
that are  necessary,  suitable or convenient to accomplish  the foregoing or are

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incidental thereto or connected  therewith,  including,  without limitation,  to
accept  additional  contributions  of equity that are not subject to the Lien of
the Indenture; and

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

The Trust is hereby authorized to engage in the foregoing activities.  The Trust
shall not engage in any activity other than in connection  with the foregoing or
other than as required or authorized by the terms of this Trust Agreement or the
Basic  Documents  while  any Note is  outstanding  without  the  consent  of the
Certificateholders  of  Certificates  evidencing  a  majority  of the  aggregate
Certificate  Percentage Interest of each Class of Certificates,  the Noteholders
of Notes representing a majority of the aggregate Security Balances of the Notes
and the Indenture Trustee.

        Section  2.04.  Appointment  of  Owner  Trustee.  The  Depositor  hereby
appoints  the Owner  Trustee as trustee  of the Trust  effective  as of the date
hereof, to have all the rights, powers and duties set forth herein.

        Section 2.05.  Initial Capital  Contribution of Owner Trust Estate.  The
Depositor hereby sells, assigns, transfers,  conveys and sets over to the Trust,
as of the date hereof,  the sum of $1. In  consideration  of the delivery by the
Owner Trustee, on behalf of the Trust, of the Securities to the Depositor or its
designee, upon the order of the Depositor, the Owner Trustee hereby acknowledges
receipt in trust from the Depositor,  as of the Closing Date,  and  concurrently
with the execution and delivery  hereof,  the  Depositor  does hereby  transfer,
assign,  set over and  otherwise  convey to the  Trust,  without  recourse,  but
subject to the other terms and  provisions of this Trust  Agreement,  all of the
right, title and interest of the Depositor in and to the Owner Trust Estate. The
foregoing  transfer,  assignment,  set over and conveyance  does not, and is not
intended  to,  result  in a  creation  or an  assumption  by  the  Trust  of any
obligation  of the  Depositor or any other Person in  connection  with the Trust
Estate  or under  any  agreement  or  instrument  relating  thereto,  except  as
specifically set forth herein.

        The Owner Trustee,  on behalf of the Trust,  acknowledges the conveyance
to the Trust by the  Depositor,  as of the  Closing  Date,  of the  Owner  Trust
Estate,  including all right,  title and interest of the Depositor in and to the
Owner Trust Estate.  Concurrently with such conveyance and in exchange therefor,
the Trust has pledged the Trust Estate to the Indenture Trustee and has executed
the  Certificates  and the Notes and caused  them to be duly  authenticated  and
delivered.

        Section 2.06.  Declaration of Trust.  The Owner Trustee hereby  declares
that it shall  hold the Owner  Trust  Estate in trust  upon and  subject  to the
conditions  set forth herein for the use and benefit of the  Certificateholders,
subject to the  obligations  of the Trust under the Basic  Documents.  It is the
intention  of the parties  hereto that the Trust  constitute  a statutory  trust
under the Statutory Trust Statute and that this Trust  Agreement  constitute the
governing  instrument of such statutory trust.  Effective as of the date hereof,
the Owner Trustee shall have all rights,  powers and duties set forth herein and
in the Statutory Trust Statute with respect to accomplishing the purposes of the
Trust. It is the intention of the parties hereto that, solely for federal, state
and local income and franchise  tax  purposes,  the Trust shall be treated as an

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entity wholly owned by the Depositor or an affiliate thereof, with the assets of
the entity  being the Trust  Estate,  and the Notes being debt of the entity and
the  provisions of this Trust  Agreement  shall be  interpreted  to further this
intention.  It is the  intention of the parties  hereto that solely for federal,
state and local income and franchise  tax  purposes,  for so long as 100% of the
Class SB-II Certificates are held by a single person or entity, the Trust (other
than the portion of the Trust  constituting  the REMICs)  shall be treated as an
entity  wholly  owned by such  person or  entity,  with the assets of the entity
being  the  Trust  Estate,  and the  Notes  being  debt of the  entity,  and the
provisions  of this  Trust  Agreement  shall  be  interpreted  to  further  this
intention.  It is the  intention of the parties  hereto that,  an election to be
treated as a REMIC  ("REMIC  I") for  federal  income tax  purposes be made with
respect to the Home Equity  Loans in Loan Group I together  with the proceeds of
the Home Equity  Loans in Loan Group I and the proceeds of the Group I Policy on
deposit in the Certificate  Distribution  Account, the Custodial Account and the
Payment Account, for purposes of the REMIC Provisions.  It is also the intention
of the parties  hereto  that a second  election to be treated as a REMIC be made
with  respect  to the REMIC I Regular  Interests  ("REMIC  II") and that a third
election  to be treated as a REMIC be made with  respect to the REMIC II Regular
Interests ("REMIC III"). The Issuer will provide for the administration of REMIC
I, REMIC II and REMIC III pursuant to Article XI of the Indenture.  If more than
one  person  owns the  Group I  Certificates,  then it is the  intention  of the
parties  hereto,  that solely for federal,  state and local income and franchise
tax  purposes  the Owner  Trust,  exclusive  of the  portion of the Owner  Trust
constituting REMIC I, shall be treated as a partnership,  with the assets of the
partnership  being the Trust  Estate,  exclusive  of the  assets of REMIC I, the
partners of the partnership being the Group II Certificateholders  and the Class
II  Notes  being  debt of the  partnership  and  the  provisions  of this  Trust
Agreement  shall be  interpreted  to further this  intention.  The parties agree
that,  unless  otherwise  required by  appropriate  tax  authorities,  the Owner
Trustee  will  file or cause  to be filed  annual  or other  necessary  returns,
reports and other forms as provided by the original Certificateholder consistent
with  the  characterization  of the  Trust  as an  entity  wholly  owned  by the
Depositor  or  an  affiliate  thereof,  or  if  two  or  more  persons  own  the
Certificates,  as a  partnership  for such tax  purposes and as provided by such
holders of Certificates.

        Section 2.07. Liability of the Holders of the Certificates.  The Holders
of the  Certificates  shall be liable for any entity level taxes  imposed on the
Trust.

        Section 2.08.  Title to Trust  Property.  Legal title to the Owner Trust
Estate  shall be vested at all times in the  Trust as a  separate  legal  entity
except where  applicable law in any  jurisdiction  requires title to any part of
the Owner  Trust  Estate to be vested in a trustee  or  trustees,  in which case
title shall be deemed to be vested in the Owner Trustee,  a co-trustee  and/or a
separate trustee, as the case may be.

        Section 2.09. Situs of Trust. The Trust will be located and administered
in the State of Delaware.  All bank accounts  maintained by the Owner Trustee on
behalf of the Trust  shall be located in the State of  Delaware  or the State of
New  York.  The Trust  shall not have any  employees  in any  state  other  than
Delaware;  provided, however, that nothing herein shall restrict or prohibit the
Owner Trustee from having  employees  within or without the State of Delaware or
taking  actions  outside the State of  Delaware in order to comply with  Section

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2.03.  Payments will be received by the Trust only in Delaware or New York,  and
payments  will be made by the Trust  only from  Delaware  or New York.  The only
office of the Trust will be at the Corporate Trust Office in Delaware.

        Section  2.10.  Representations  and  Warranties of the  Depositor.  The
Depositor hereby represents and warrants to the Owner Trustee that:

               (a) The  Depositor is duly  organized  and validly  existing as a
        corporation  in good  standing  under the laws of the State of Delaware,
        with  power and  authority  to own its  properties  and to  conduct  its
        business as such  properties  are  currently  owned and such business is
        presently conducted.

               (b) The  Depositor is duly  qualified to do business as a foreign
        corporation in good standing and has obtained all necessary licenses and
        approvals in all  jurisdictions  in which the  ownership or lease of its
        property   or  the  conduct  of  its   business   shall   require   such
        qualifications  and in which the  failure  to so  qualify  would  have a
        material adverse effect on the business, properties, assets or condition
        (financial  or other) of the  Depositor and the ability of the Depositor
        to perform under this Trust Agreement.

               (c) The  Depositor  has the power and  authority  to execute  and
        deliver this Trust  Agreement and to carry out its terms;  the Depositor
        has full power and  authority to sell and assign the property to be sold
        and  assigned to and  deposited  with the Trust as part of the Trust and
        the Depositor has duly  authorized  such sale and assignment and deposit
        to the  Trust by all  necessary  corporate  action;  and the  execution,
        delivery  and  performance  of  this  Trust  Agreement  have  been  duly
        authorized by the Depositor by all necessary corporate action.

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

        Section  2.11.  Payment of Trust Fees.  The Owner  Trustee shall pay the
Trust's  fees and  expenses  incurred  with  respect to the  performance  of the
Trust's duties under the Indenture.

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                                   ARTICLE III

                      Conveyance of the Home Equity Loans; Certificates

        Section  3.01.  Conveyance  of the Home  Equity  Loans.  The  Depositor,
concurrently  with the  execution  and delivery  hereof,  does hereby  transfer,
convey,  sell and assign to the Trust, on behalf of the Holders of the Notes and
the Certificates and the Credit Enhancer, without recourse, all its right, title
and interest in and to the Home Equity Loans.  The  Depositor  will also provide
the Trust with the Group I Policy and the Group II Policy.

        The parties hereto intend that, for non-tax  purposes,  the  transaction
set forth  herein be a sale by the  Depositor  to the Trust of all of its right,
title and  interest in and to the Home  Equity  Loans.  In the event  that,  for
non-tax  purposes,  the transaction set forth herein is not deemed to be a sale,
the  Depositor  hereby  grants to the Trust a  security  interest  in all of its
right,  title  and  interest  in,  to and under  the  Owner  Trust  Estate,  all
distributions  thereon and all proceeds thereof;  and this Trust Agreement shall
constitute a security agreement under applicable law.

        Section 3.02. Initial Ownership.  Upon the formation of the Trust by the
contribution by the Depositor  pursuant to Section 2.05 and until the conveyance
of the Home  Equity  Loans  pursuant  to Section  3.01 and the  issuance  of the
Certificates, the Depositor shall be the sole Certificateholder.

        Section 3.03.  The  Certificates.  The  Certificates  shall be issued in
minimum  denominations  of a  Certificate  Percentage  Interest of 10.0000%  and
integral  multiples  of  0.0001%  in excess  thereof;  provided,  however,  that
Certificates  may be issued in minimum  denominations  of less than  10.0000% in
accordance with the provisions of Section 3.12. The Class SB-I  Certificates and
Class SB-II  Certificates  shall be issued in  substantially  the form  attached
hereto as Exhibit A. The Class R-I Certificates, Class R-II Certificates and the
Class R-III  Certificates  shall be issued in  substantially  the form  attached
hereto as Exhibit I.

        The  Certificates  shall be executed on behalf of the Trust by manual or
facsimile   signature  of  an  authorized  officer  of  the  Owner  Trustee  and
authenticated in the manner provided in Section 3.04.  Certificates  bearing the
manual or facsimile  signatures of  individuals  who were, at the time when such
signatures  shall have been affixed,  authorized to sign on behalf of the Trust,
shall be validly  issued and  entitled to the  benefit of this Trust  Agreement,
notwithstanding  that such individuals or any of them shall have ceased to be so
authorized prior to the  authentication and delivery of such Certificates or did
not  hold  such  offices  at the date of  authentication  and  delivery  of such
Certificates. A Person shall become a Certificateholder and shall be entitled to
the rights and subject to the obligations of a Certificateholder  hereunder upon
such Person's acceptance of a Certificate duly registered in such Person's name,
pursuant to Section 3.05.

        A transferee of a Certificate shall become a Certificateholder and shall
be entitled to the rights and subject to the obligations of a  Certificateholder
hereunder upon such transferee's  acceptance of a Certificate duly registered in
such  transferee's  name pursuant to and upon satisfaction of the conditions set
forth in Section 3.05.

        Section 3.04.  Authentication  of  Certificates.  Concurrently  with the
acquisition  of the Home  Equity  Loans by the Trust,  the Owner  Trustee or the

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<PAGE>

Certificate  Paying  Agent  shall  cause  each Class of the  Certificates  in an
initial  Certificate  Percentage Interest of 100.00% to be executed on behalf of
the Trust,  authenticated  and  delivered  to or upon the  written  order of the
Depositor,  signed by its  chairman  of the  board,  its  president  or any vice
president,  without  further  corporate  action by the Depositor,  in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Trust  Agreement  or be valid for any purpose  unless there shall appear on such
Certificate a certificate of authentication  substantially in the form set forth
in  Exhibit  A or  Exhibit  I  hereto,  executed  by the  Owner  Trustee  or the
Certificate  Paying  Agent,  by  manual  signature;  such  authentication  shall
constitute  conclusive  evidence  that  such  Certificate  shall  have been duly
authenticated and delivered hereunder.  All Certificates shall be dated the date
of their authentication.

        Section 3.05.  Registration  of and Limitations on Transfer and Exchange
of Certificates.  (a) The Certificate  Registrar shall keep or cause to be kept,
at the office or agency  maintained  pursuant  to Section  3.09,  a  Certificate
Register in which,  subject to such reasonable  regulations as it may prescribe,
the Certificate Registrar shall provide for the registration of Certificates and
of transfers and exchanges of  Certificates  as herein  provided.  The Indenture
Trustee shall be the initial Certificate Registrar. If the Certificate Registrar
resigns or is removed,  the Owner Trustee shall appoint a successor  Certificate
Registrar.

        Subject  to  satisfaction  of  the  conditions  set  forth  below,  upon
surrender  for  registration  of  transfer of any  Certificate  at the office or
agency  maintained  pursuant to Section 3.09,  the Owner Trustee shall  execute,
authenticate  and  deliver  (or shall  cause the  Certificate  Registrar  as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or  transferees,  one or more new  Certificates  of the same Class in
authorized   denominations  of  a  like  aggregate  amount  dated  the  date  of
authentication by the Owner Trustee or any  authenticating  agent. At the option
of a Certificateholder,  Certificates may be exchanged for other Certificates of
the same Class of  authorized  denominations  of a like  aggregate  amount  upon
surrender of the Certificates to be exchanged at the office or agency maintained
pursuant to Section 3.09.

        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 Certificate Registrar duly executed by the Certificateholder
or  such   Certificateholder's   attorney  duly  authorized  in  writing.   Each
Certificate  surrendered  for  registration  of transfer  or  exchange  shall be
cancelled  and  subsequently   disposed  of  by  the  Certificate  Registrar  in
accordance with its customary practice.

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

        Except as described below, each holder of a Class SB-II Certificate or a
Class R Certificate shall establish its non-foreign  status by submitting to the
Certificate  Paying  Agent an IRS Form W-9 and the  Certificate  of  Non-Foreign
Status (in substantially the form attached hereto as Exhibit F).

                                       7
<PAGE>

        A Class SB-II Certificate or Class R Certificate may be transferred to a
Certificateholder unable to establish its non-foreign status as described in the
preceding  paragraph  only if such  Certificateholder  provides  an  Opinion  of
Counsel,  which  Opinion  of Counsel  shall not be an expense of the Trust,  the
Owner Trustee, the Certificate  Registrar or the Depositor,  satisfactory to the
Depositor  and the Credit  Enhancer,  that such transfer (1) will not affect the
tax status of the Trust and (2) will not  adversely  affect the interests of any
Certificateholder,   Noteholder  or  the  Credit  Enhancer,  including,  without
limitation,  as a  result  of  the  imposition  of  any  United  States  federal
withholding taxes on the Trust (except to the extent that such withholding taxes
would be payable solely from amounts otherwise  distributable to the Certificate
of the  prospective  transferee).  If such  transfer  occurs  and  such  foreign
Certificateholder  becomes  subject to such United  States  federal  withholding
taxes, any such taxes will be withheld by the Indenture Trustee.  Each holder of
a Class SB-II  Certificate  or a Class R  Certificate  unable to  establish  its
non-foreign  status shall submit to the  Certificate  Paying Agent a copy of its
Form W-8 and shall resubmit such Form W-8-BEN or such successor form as required
by then-applicable regulations and shall resubmit such form every three years or
with such frequency as required by then-applicable regulations.

        (b)(i) No transfer,  sale,  pledge or other disposition of a Certificate
shall be made unless such transfer,  sale, pledge or other disposition is exempt
from the  registration  requirements  of the  Securities  Act and any applicable
state  securities  laws or is made in accordance  with said Act and laws. In the
event of any such transfer,  the  Certificate  Registrar or the Depositor  shall
prior to such  transfer  require  the  transferee  (A) to either (i)  execute an
investment  letter in substantially the form attached hereto as Exhibit C (or in
such form and substance reasonably satisfactory to the Certificate Registrar and
the Depositor)  which  investment  letters shall not be an expense of the Trust,
the Owner  Trustee,  the  Certificate  Registrar,  the  Master  Servicer  or the
Depositor  and which  investment  letter states that,  among other things,  such
transferee (a) is a "qualified  institutional buyer" as defined under Rule 144A,
acting for its own  account or the  accounts of other  "qualified  institutional
buyers"  as  defined  under  Rule  144A,  and (b) is  aware  that  the  proposed
transferor intends to rely on the exemption from registration requirements under
the Securities Act, provided by Rule 144A or (ii) (a) deliver to the Certificate
Registrar  and the Depositor a written  Opinion of Counsel  acceptable to and in
form and substance  satisfactory to the Certificate  Registrar and the Depositor
that  such  transfer  may be  made  pursuant  to an  exemption,  describing  the
applicable exemption and the basis therefor,  from said Act and laws or is being
made  pursuant to said Act and laws,  which  Opinion of Counsel  shall not be an
expense of the Trust, the Owner Trustee, the Certificate  Registrar,  the Master
Servicer or the Depositor and (b) execute a representation letter, substantially
in the form of  Exhibit  D  hereto,  and to cause the  transferor  to  execute a
representation  letter,  substantially  in the form of  Exhibit E  hereto,  each
acceptable  to  and in  form  and  substance  satisfactory  to  the  Certificate
Registrar and the Depositor  certifying  the facts  surrounding  such  transfer,
which  representation  letters  shall not be an expense of the Trust,  the Owner
Trustee, the Certificate Registrar, the Master Servicer or the Depositor and (B)
in the case of a Class SB-II  Certificate  or Class R Certificate to execute the
Certificate of Non-Foreign  Status (in substantially the form attached hereto as
Exhibit F) acceptable to and in form and substance  reasonably  satisfactory  to
the Certificate  Registrar and the Depositor,  which certificate shall not be an
expense  of the Trust,  the Owner  Trustee,  the  Certificate  Registrar  or the
Depositor.  If the  Certificateholder  is unable to  provide  a  Certificate  of
Non-Foreign Status, the Certificateholder  must provide an Opinion of Counsel as
described in the preceding paragraph.  The Certificateholder  desiring to effect

                                       8
<PAGE>

such transfer shall,  and does hereby agree to,  indemnify the Trust,  the Owner
Trustee,  the  Certificate  Registrar,  the Master  Servicer  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.

        (ii) No transfer of Certificates  or any interest  therein shall be made
to any employee benefit plan or certain other retirement plans and arrangements,
including  individual  retirement  accounts and annuities,  Keogh plans and bank
collective  investment funds and insurance  company general or separate accounts
in which such plans, accounts or arrangements are invested,  that are subject to
ERISA, or Section 4975 of the Code  (collectively,  "Plan"),  any Person acting,
directly or indirectly,  on behalf of any such Plan or any Person acquiring such
Certificates  with "plan assets" of a Plan within the meaning of the  Department
of Labor  regulation  promulgated  at 29 C.F.R.  ss.2510.3-101  ("Plan  Assets")
unless the  Depositor,  the Owner  Trustee,  the  Certificate  Registrar and the
Master Servicer are provided with an Opinion of Counsel which establishes to the
satisfaction of the Depositor,  the Owner Trustee, the Certificate Registrar and
the Master  Servicer  that the purchase of  Certificates  is  permissible  under
applicable  law,  will not  constitute or result in any  prohibited  transaction
under ERISA or Section 4975 of the Code and will not subject the Depositor,  the
Owner  Trustee,  the  Certificate  Registrar  or  the  Master  Servicer  to  any
obligation or liability  (including  obligations or  liabilities  under ERISA or
Section  4975 of the  Code)  in  addition  to  those  undertaken  in this  Trust
Agreement,  which Opinion of Counsel  shall not be an expense of the  Depositor,
the Owner Trustee, the Certificate  Registrar or the Master Servicer. In lieu of
such Opinion of Counsel, a Plan, any Person acting,  directly or indirectly,  on
behalf of any such Plan or any  Person  acquiring  such  Certificates  with Plan
Assets of a Plan may  provide a  certification  in the form of Exhibit G to this
Trust  Agreement,  which the  Depositor,  the  Owner  Trustee,  the  Certificate
Registrar  and the Master  Servicer  may rely upon  without  further  inquiry or
investigation.  Neither  an  Opinion  of  Counsel  nor a  certification  will be
required in connection with the initial  transfer of any such Certificate by the
Depositor to an affiliate of the Depositor (in which case,  the Depositor or any
affiliate thereof shall be deemed to have represented that such affiliate is not
a Plan or a Person  investing  Plan  Assets of any  Plan) and the Owner  Trustee
shall be entitled to conclusively  rely upon a representation  (which,  upon the
request  of the  Owner  Trustee,  shall be a  written  representation)  from the
Depositor of the status of such transferee as an affiliate of the Depositor.

        (iii) In  addition,  no transfer of a Class SB-II  Certificate  shall be
permitted, and no such transfer shall be registered by the Certificate Registrar
or be effective  hereunder,  unless  evidenced  by an Opinion of Counsel,  which
establishes  that such transfer or the  registration  of such transfer would not
cause the Trust to be classified  as a publicly  traded  partnership,  by having
more than 100  Certificateholders  at any time  during the  taxable  year of the
Trust,  an  association  taxable as a  corporation,  a corporation  or a taxable
mortgage pool for federal and relevant state income tax purposes,  which Opinion
of Counsel shall not be an expense of the Certificate  Registrar and shall be an
expense of the  proposed  transferee.  No Opinion of Counsel will be required if
such  transfer  is made to a  nominee  of an  existing  beneficial  holder  of a
Certificate.

        (iv) In  addition,  no  transfer,  sale,  assignment,  pledge  or  other
disposition  of a  Certificate  shall be made  unless  the  proposed  transferee
executes  a  representation  letter  substantially  in the form of Exhibit D, or
substantially  in the form of  Exhibit  H  hereto,  that (1) the  transferee  is
acquiring  the  Certificate  for its own  behalf  and is not  acting as agent or

                                       9
<PAGE>

custodian for any other Person or entity in connection with such acquisition and
(2) if the  transferee is a  partnership,  grantor  trust or S  corporation  for
federal income tax purposes,  the Certificates acquired are not more than 50% of
the assets of the partnership, grantor trust or S corporation.

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

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

     (B)  In connection with any proposed Transfer of any Ownership  Interest in
          a  Class  R  Certificate,  the  Certificate  Registrar  shall  require
          delivery  to it, and shall not  register  the  Transfer of any Class R
          Certificate  until its receipt of, (I) an affidavit  and  agreement (a
          "Transfer  Affidavit and  Agreement,"  in the form attached  hereto as
          Exhibit  J-1)  from the  proposed  Transferee,  in form and  substance
          satisfactory  to the Master  Servicer,  representing  and  warranting,
          among other things, that it is a Permitted Transferee,  that it is not
          acquiring  its Ownership  Interest in the Class R Certificate  that is
          the subject of the  proposed  Transfer as a nominee,  trustee or agent
          for any Person who is not a Permitted Transferee,  that for so long as
          it retains its Ownership  Interest in a Class R  Certificate,  it will
          endeavor to remain a Permitted  Transferee,  and that it has  reviewed
          the  provisions  of this  Section 3.05 and agrees to be bound by them,
          and (II) a  certificate,  in the form attached  hereto as Exhibit J-2,
          from  the  Certificateholder  of a  Class  R  Certificate  wishing  to
          transfer the Class R Certificate,  in form and substance  satisfactory
          to the Master  Servicer,  representing  and  warranting,  among  other
          things,  that no purpose  of the  proposed  Transfer  is to impede the
          assessment or collection of tax.

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

     (D)  Each Person  holding or acquiring any Ownership  Interest in a Class R
          Certificate  shall  agree (x) to  require  a  Transfer  Affidavit  and

                                       10
<PAGE>

          Agreement  from any  other  Person  to whom such  Person  attempts  to
          transfer its Ownership  Interest in a Class R Certificate  and (y) not
          to transfer its Ownership Interest unless it provides a certificate to
          the Certificate Registrar in the form attached hereto as Exhibit J-2.

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

        (vi) The Certificate Registrar will register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and Agreement,
a certificate of the Certificateholder of a Class R Certificate  requesting such
transfer  in the  form  attached  hereto  as  Exhibit  G and all of  such  other
documents as shall have been reasonably required by the Certificate Registrar as
a condition  to such  registration.  Transfers  of the Class R  Certificates  to
Non-United States Persons and Disqualified  Organizations (as defined in Section
860E(e)(5) of the Code) are prohibited.

        (vii) (A) If any  Disqualified  Organization  shall become a holder of a
Class R  Certificate,  then the last  preceding  Permitted  Transferee  shall be
restored,  to the extent  permitted  by law,  to all rights and  obligations  as
Certificateholder  of a Class R Certificate  thereof  retroactive to the date of
registration  of such  Transfer  of such Class R  Certificate.  If a  Non-United
States  Person  shall  become a holder of a Class R  Certificate,  then the last
preceding  United  States Person shall be restored,  to the extent  permitted by
law, to all rights and obligations as Certificateholder of a Class R Certificate
thereof retroactive to the date of registration of such Transfer of such Class R
Certificate.  If a transfer of a Class R Certificate is disregarded  pursuant to
the provisions of Treasury  Regulations  Section  1.860E-1 or Section  1.860G-3,
then the last preceding  Permitted  Transferee shall be restored,  to the extent
permitted by law, to all rights and obligations as  Certificateholder of a Class
R Certificate  thereof  retroactive to the date of registration of such Transfer
of such  Class R  Certificate.  The  Certificate  Registrar  shall  be  under no
liability  to  any  Person  for  any  registration  of  Transfer  of a  Class  R
Certificate that is in fact not permitted by this Section 3.05 or for making any
payments due on such  Certificate  to the holder thereof or for taking any other
action with respect to such holder under the provisions of this Agreement.

               (B) If any purported  Transferee shall become a Certificateholder
        of a  Class R  Certificate  in  violation  of the  restrictions  in this
        Section 3.05 and to the extent that the  retroactive  restoration of the
        rights of the Certificateholder of such Class R Certificate as described
        in clause  (vii)(A)  above shall be invalid,  illegal or  unenforceable,
        then the Master  Servicer  shall have the right,  without  notice to the
        holder or any prior  holder of such  Class R  Certificate,  to sell such
        Class R Certificate  to a purchaser  selected by the Master  Servicer on
        such terms as the Master Servicer may choose. Such purported  Transferee
        shall  promptly   endorse  and  deliver  each  Class  R  Certificate  in
        accordance with the instructions of the Master Servicer.  Such purchaser
        may  be the  Master  Servicer  itself  or any  Affiliate  of the  Master

                                       11
<PAGE>

        Servicer.  The proceeds of such sale, net of the commissions  (which may
        include  commissions  payable to the Master Servicer or its Affiliates),
        expenses and taxes due, if any, will be remitted by the Master  Servicer
        to such purported Transferee. The terms and conditions of any sale under
        this clause  (vii)(B) shall be determined in the sole  discretion of the
        Master  Servicer,  and the  Master  Servicer  shall not be liable to any
        Person having an Ownership Interest in a Class R Certificate as a result
        of its exercise of such discretion.

               (viii) The REMIC Administrator shall make available, upon written
        request from the Internal  Revenue Service and any potentially  affected
        Person,  all  information  necessary to compute any tax imposed (A) as a
        result of the Transfer of an Ownership Interest in a Class R Certificate
        to  any  Person  who  is  a  Disqualified  Organization,  including  the
        information  regarding "excess  inclusions" of such Class R Certificates
        required  to be  provided to the  Internal  Revenue  Service and certain
        Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
        1.860E-2(a)(5), and (B) as a result of any regulated investment company,
        real estate investment  trust,  common trust fund,  partnership,  trust,
        estate or organization  described in Section 1381 of the Code that holds
        an  Ownership  Interest  in a Class R  Certificate  having  as among its
        record   holders  at  any  time  any   Person  who  is  a   Disqualified
        Organization. Reasonable compensation for providing such information may
        be  required  by the REMIC  Administrator  before it will  provide  such
        information to any such potentially affected Person.

               (ix) The  provisions of this Section 3.05 set forth prior to this
        clause (ix) may be modified, added to or eliminated, provided that there
        shall have been delivered to the Owner Trustee the following:

                      (A) written  notification  from each Rating  Agency to the
               effect that the modification,  addition to or elimination of such
               provisions  will not cause such Rating  Agency to  downgrade  its
               then-current ratings, if any, if determined without regard to the
               Group I Policy  and  Group II  Policy,  of any Class of the Notes
               below the lower of the then-current rating or the rating assigned
               to such Notes as of the Closing  Date by such Rating  Agency,  if
               determined  without  regard  to the  Group I Policy  and Group II
               Policy; and

                      (B)  subject  to Section  11.01(f)  of the  Indenture,  an
               Officers'  Certificate  of the Master  Servicer  stating that the
               Master  Servicer has received an Opinion of Counsel,  in form and
               substance  satisfactory  to the  Master  Servicer  and the Credit
               Enhancer,  to the effect that such  modification,  addition to or
               absence of such  provisions  will not cause any portion of any of
               the  REMICs to cease to qualify as a REMIC and will not cause (x)
               any portion of any of the REMICs to be subject to an entity-level
               tax caused by the Transfer of any Class R Certificate to a Person
               that is a Disqualified Organization or (y) a Certificateholder or
               another Person to be subject to a REMIC-related tax caused by the
               Transfer  of a  Class R  Certificate  to a  Person  that is not a
               Permitted Transferee.

        Section 3.06. Mutilated,  Destroyed, Lost or Stolen Certificates. If (i)
any mutilated Certificate shall be surrendered to the Certificate Registrar,  or
if the Certificate  Registrar shall receive  evidence to its satisfaction of the

                                       12
<PAGE>

destruction,  loss or theft of any Certificate and (ii) there shall be delivered
to the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required  by them to save each of them and the Issuer from harm,  then in
the absence of notice to the  Certificate  Registrar  or the Owner  Trustee that
such  Certificate has been acquired by a bona fide purchaser,  the Owner Trustee
shall  execute on behalf of the Trust and the Owner  Trustee or the  Certificate
Paying  Agent,  as the Trust's  authenticating  agent,  shall  authenticate  and
deliver,  in exchange for or in lieu of any such mutilated,  destroyed,  lost or
stolen  Certificate,  a new  Certificate  of like  tenor  and  denomination.  In
connection with the issuance of any new Certificate under this Section 3.06, the
Owner  Trustee or the  Certificate  Registrar  may  require the payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection therewith.  Any duplicate Certificate issued pursuant to this Section
3.06 shall  constitute  conclusive  evidence of  ownership  in the Trust,  as if
originally  issued,  whether or not the lost,  stolen or  destroyed  Certificate
shall be found at any time.

        Section  3.07.   Persons   Deemed   Certificateholders.   Prior  to  due
presentation of a Certificate for  registration of transfer,  the Owner Trustee,
the Certificate  Registrar or any Certificate  Paying Agent may treat the Person
in whose name any Certificate is registered in the  Certificate  Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes  whatsoever,  and none of the Trust, the
Owner Trustee,  the Certificate  Registrar or any Paying Agent shall be bound by
any notice to the contrary.

        Section 3.08. Access to List of Certificateholders' Names and Addresses.
The  Certificate  Registrar  shall  furnish  or  cause  to be  furnished  to the
Depositor or the Owner Trustee,  within 15 days after receipt by the Certificate
Registrar of a written request therefor from the Depositor or the Owner Trustee,
a list, in such form as the Depositor or the Owner Trustee,  as the case may be,
may reasonably require, of the names and addresses of the  Certificateholders as
of the most  recent  Record  Date.  Each  Holder,  by  receiving  and  holding a
Certificate,  shall be deemed to have  agreed not to hold any of the Trust,  the
Depositor,  the Certificate Registrar or the Owner Trustee accountable by reason
of the  disclosure of its name and address,  regardless of the source from which
such information was derived.

        Section 3.09.  Maintenance of Office or Agency.  The Owner  Trustee,  on
behalf of the Trust, shall maintain in the City of New York an office or offices
or agency or agencies where  Certificates may be surrendered for registration of
transfer or exchange and where  notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Basic Documents may be served.  The Owner
Trustee initially designates the Corporate Trust Office of the Indenture Trustee
as its office for such  purposes.  The Owner Trustee  shall give prompt  written
notice to the Depositor and the Certificateholders of any change in the location
of the Certificate Register or any such office or agency.

        Section 3.10. Certificate Paying Agent. (a) The Certificate Paying Agent
shall make distributions to Certificateholders from the Certificate Distribution
Account  on  behalf  of the  Trust  in  accordance  with the  provisions  of the
Certificates  and Section 5.01 hereof from payments  remitted to the Certificate
Paying Agent by the Indenture Trustee pursuant to Section 3.05 of the Indenture.
The Trust hereby appoints the Indenture Trustee as Certificate  Paying Agent and
the Indenture Trustee hereby accepts such appointment and further agrees that it

                                       13
<PAGE>

will  be  bound  by the  provisions  of this  Trust  Agreement  relating  to the
Certificate Paying Agent and shall:

               (i) hold all sums held by it for the  payment of amounts due with
respect to the  Certificates  in trust for the benefit of the  Persons  entitled
thereto  until such sums shall be paid to such Persons or otherwise  disposed of
as herein provided;

               (ii) give the Owner Trustee notice of any default by the Trust of
which it has actual  knowledge in the making of any payment  required to be made
with respect to the Certificates;

               (iii) at any time  during the  continuance  of any such  default,
upon the  written  request  of the  Owner  Trustee,  forthwith  pay to the Owner
Trustee  on behalf  of the  Trust all sums so held in Trust by such  Certificate
Paying Agent;

               (iv) immediately resign as Certificate Paying Agent and forthwith
pay to the Owner Trustee on behalf of the Trust all sums held by it in trust for
the  payment  of  Certificates  if at any time it ceases  to meet the  standards
required  to be  met  by  the  Certificate  Paying  Agent  at  the  time  of its
appointment;

               (v) comply with all  requirements of the Code with respect to the
withholding  from any payments made by it on any  Certificates of any applicable
withholding  taxes imposed thereon and with respect to any applicable  reporting
requirements in connection therewith; and

               (vi)  deliver  to the  Owner  Trustee  a copy  of the  report  to
Certificateholders  prepared  with  respect to each  Payment  Date by the Master
Servicer pursuant to Section 4.01 of the Servicing Agreement.

        (b) The Trust may revoke  such power and remove the  Certificate  Paying
Agent  if  the  Owner  Trustee  determines  in  its  sole  discretion  that  the
Certificate Paying Agent shall have failed to perform its obligations under this
Trust  Agreement  in any  material  respect.  The  Indenture  Trustee  shall  be
permitted to resign as Certificate  Paying Agent upon 30 days' written notice to
the Owner  Trustee;  provided the Indenture  Trustee is also resigning as Paying
Agent under the Indenture at such time. In the event that the Indenture  Trustee
shall no longer be the  Certificate  Paying Agent under this Trust Agreement and
Paying Agent under the Indenture, the Owner Trustee shall appoint a successor to
act as  Certificate  Paying Agent  (which shall be a bank or trust  company) and
which shall also be the successor  Paying Agent under the  Indenture.  The Owner
Trustee shall cause such  successor  Certificate  Paying Agent or any additional
Certificate  Paying Agent  appointed by the Owner Trustee to execute and deliver
to the Owner  Trustee an instrument to the effect set forth in this Section 3.10
as it relates to the  Certificate  Paying Agent.  The  Certificate  Paying Agent
shall return all unclaimed  funds to the Trust and upon removal of a Certificate
Paying  Agent such  Certificate  Paying Agent shall also return all funds in its
possession to the Trust. The provisions of Sections 6.01, 6.04, 6.05, 6.06, 7.01
and 7.02 shall apply to the Certificate  Paying Agent to the extent  applicable.
Any  reference  in this Trust  Agreement to the  Certificate  Paying Agent shall
include any co-paying agent unless the context requires otherwise.

        (c) The  Certificate  Paying Agent shall  establish  and  maintain  with
itself the  Certificate  Distribution  Account in which the  Certificate  Paying
Agent  shall  deposit,  on the same  day as it is  received  from the  Indenture

                                       14
<PAGE>

Trustee,  each remittance  received by the Certificate Paying Agent with respect
to payments made pursuant to the Indenture.  The Certificate  Paying Agent shall
make all distributions of Certificate  Distribution Amounts on the Certificates,
from moneys on deposit in the Certificate Distribution Account.

        Section 3.11.  Cooperation.  The Owner  Trustee  shall  cooperate in all
respects  with any  reasonable  request  by the  Credit  Enhancer  for action to
preserve or enforce the Credit  Enhancer's  rights or interest  under this Trust
Agreement or the Insurance  Agreement,  consistent with this Trust Agreement and
without limiting the rights of the Certificateholders as otherwise expressly set
forth in this Trust Agreement.

        Section 3.12. Additional  Certificate Security Balances Upon Issuance of
Capped  Funding  Notes.  (a) On any date on which  Variable  Funding  Notes  are
exchanged for Capped Funding Notes pursuant to Section 4.01(d) of the Indenture,
the Security Balance of one or more Class SB-II  Certificates shall be increased
in an amount equal to the Additional  Certificate  Security  Balance as required
pursuant to the Opinion of Counsel required to be delivered  pursuant to Section
4.01(d) of the Indenture in connection  with the issuance of the Capped  Funding
Notes.  In  addition,  on any  Payment  Date on  which  the  Additional  Balance
Differential for such Payment Date if added to the aggregate Security Balance of
the Variable  Funding Notes (after  application of any principal  payments to be
made thereon on such Payment  Date) would cause the aggregate  Security  Balance
thereof  to exceed the  Maximum  Variable  Funding  Balance,  then the  Security
Balance of one or more  Certificates  shall be  increased  by the amount of such
excess.

        (b) 100.00% of the value of the Additional  Certificate Security Balance
shall be added to any Class SB-II Certificate held by the Seller or an Affiliate
thereof without the consent of the other Certificateholders; or if no such Class
SB-II  Certificate  exists,  a  new  Class  SB-II  Certificate  or  Class  SB-II
Certificates  shall be issued at the  direction  of the  Seller or an  Affiliate
thereof having in the aggregate a Security Balance equal to such 100.00% of such
value. Alternatively,  the Depositor may allocate any portion of such value to a
Class SB-II  Certificateholder other than the Depositor or an Affiliate thereof,
provided  that  such  Certificateholder  provides  its  written  consent  to the
Depositor and the Owner Trustee.

        (c) Following such increase, the Certificate Percentage Interest of each
Class SB-II Certificate  shall be recalculated,  the numerator of which shall be
the  value  thereof  including  the  respective  value  of  the  portion  of the
Additional  Certificate  Security Balance added thereto pursuant to this Section
3.12,  and the  denominator  of which  shall be the value of all the Class SB-II
Certificates  following such  increase.  The Owner Trustee shall issue new Class
SB-II Certificates with new Certificate  Percentage  Interests to each Holder of
the  Class  SB-II  Certificates,  with  such  Certificate  Percentage  Interests
calculated to four decimal places. In addition, the new Class SB-II Certificates
may be issued in minimum  denominations  of 0.0001% and  integral  multiples  of
0.0001% in excess thereof.  This subsection,  and subsections (d) and (e) below,
shall not apply in the event that any Additional Certificate Security Balance is
allocated in accordance with subsection (b) either (i) at any time when there is
only one Class SB-II  Certificateholder,  or (ii) at any time when there is more
than one Class SB-II  Certificateholder if such Additional  Certificate Security
Balance is allocated on a pro rata basis among all Class SB-II Certificates.

                                       15
<PAGE>

        (d) For  purposes  of the  foregoing,  the  "value"  of any Class  SB-II
Certificate or any Additional  Certificate  Security Balance added thereto shall
be determined by the Seller in its sole discretion based on reasonable cash flow
assumptions and valuation methods,  and any such determination  shall be binding
on the Certificateholders. If the Seller is unable to determine the "value," the
Owner  Trustee  shall  determine  the  "value"  using the same  assumptions  and
methods.

        (e) The Owner  Trustee,  the  Indenture  Trustee and the Issuer agree to
cooperate  with each  other and the  Depositor  and the  Seller  and to cause no
unreasonable  delay in adjusting  the  Certificate  Percentage  Interests of the
Class SB-II Certificates pursuant to this Section 3.12 and the issuing of Capped
Funding Notes in connection with Section 4.01(d) of the Indenture.

        Section 3.13.  Subordination.  Except as otherwise provided in the Basic
Documents,   for  so  long  as  any  Notes  are   outstanding  or  unpaid,   the
Certificateholders will generally be subordinated in right of payment, under the
Certificates or otherwise,  to payments to the  Noteholders  under, or otherwise
related to, the Indenture. If an Event of Default has occurred and is continuing
under the Indenture,  the Certificates will be fully subordinated to obligations
owing  by the  Trust  to the  Noteholders  and the  Credit  Enhancer  under,  or
otherwise  related to, the Indenture,  and no distributions  will be made on the
Certificates  until the  Noteholders  and the  Indenture  Trustee and the Credit
Enhancer have been irrevocably paid in full.

        Section 3.14. No Priority  Among  Certificates.  All  Certificateholders
shall rank equally as to amounts distributable upon the liquidation, dissolution
or winding up of the Trust, with no preference or priority being afforded to any
Certificateholders  over  any  other  Certificateholders,  except  that  amounts
distributable to the Group I Certificates will be distributed first to the Class
SB-I Certificates,  in an amount equal to the Class SB-I Distribution Amount for
such  Payment  Date and the Class  SB-I  Distribution  Amount  for any  previous
Payment Date to the extent not previously paid,  before being distributed to the
Class  R-I   Certificates,   and  amounts   distributable  to  the  Class  SB-II
Certificates will be distributed to the Class SB-II Certificates.

                                   ARTICLE IV

                      Authority and Duties of Owner Trustee

        Section 4.01.  General  Authority.  The Owner Trustee is authorized  and
directed to execute and deliver the Basic  Documents to which the Trust is to be
a party and each  certificate  or other  document  attached  as an exhibit to or
contemplated  by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument  described  herein,  in each case, in
such form as the Owner Trustee shall approve,  as evidenced  conclusively by the
Owner  Trustee's  execution  thereof.  In addition to the  foregoing,  the Owner
Trustee is obligated to take all actions  required of the Trust  pursuant to the
Basic Documents.

        Section 4.02.  General Duties. The Owner Trustee shall be responsible to
administer the Trust pursuant to the terms of this Trust Agreement and the Basic
Documents   to  which  the  Trust  is  a  party  and  in  the  interest  of  the
Certificateholders,  subject to the Basic  Documents and in accordance  with the
provisions of this Trust Agreement.

                                       16
<PAGE>

        Section 4.03.  Action upon  Instruction.  (a) Subject to this Article IV
and in accordance with the terms of the Basic Documents,  the Certificateholders
may by written  instruction  direct the Owner  Trustee in the  management of the
Trust. Such direction may be exercised at any time by written instruction of the
Certificateholders pursuant to this Article IV.

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

        (c) Whenever the Owner Trustee is unable to decide  between  alternative
courses of action  permitted or required by the terms of this Trust Agreement or
under any Basic Document, or in the event that the Owner Trustee is unsure as to
the  application of any provision of this Trust  Agreement or any Basic Document
or any such provision is ambiguous as to its  application,  or is, or appears to
be, in conflict with any other applicable  provision,  or in the event that this
Trust Agreement  permits any  determination by the Owner Trustee or is silent or
is  incomplete  as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate  under the  circumstances)  to
the  Certificateholders   (with  a  copy  to  the  Credit  Enhancer)  requesting
instruction  as to the  course of action to be  adopted,  and to the  extent the
Owner  Trustee acts in good faith in  accordance  with any written  instructions
received from Holders of  Certificates  representing  a majority of the Security
Balance of each Class of Certificates,  the Owner Trustee shall not be liable on
account  of such  action  to any  Person.  If the Owner  Trustee  shall not have
received  appropriate  instruction within 10 days of such notice (or within such
shorter  period of time as reasonably  may be specified in such notice or may be
necessary under the  circumstances)  it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement or
the  Basic  Documents,  as it  shall  deem to be in the  best  interests  of the
Certificateholders,  and the Owner Trustee shall have no liability to any Person
for such action or inaction.

        Section 4.04. No Duties Except as Specified under Specified Documents or
in  Instructions.  The Owner  Trustee  shall not have any duty or  obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner  Trustee  is a party,  except as  expressly  provided  (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee  pursuant to this Trust  Agreement,  (ii) in  accordance  with the Basic
Documents and (iii) in accordance with any document or instruction  delivered to
the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations
shall be read into this Trust Agreement or any Basic Document  against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or  continuation  statement  in any  public  office at any time or to  otherwise
perfect or maintain the  perfection of any security  interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Trust Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense,  promptly
take all action as may be necessary  to  discharge  any liens on any part of the

                                       17
<PAGE>

Owner Trust  Estate that result from  actions by, or claims  against,  the Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.

        Section  4.05.  Restrictions.  (a) The Owner  Trustee shall not take any
action  (x) that is  inconsistent  with the  purposes  of the Trust set forth in
Section 2.03 or (y) that, to the actual  knowledge of the Owner  Trustee,  would
result in the Trust becoming taxable as a corporation or a taxable mortgage pool
for federal income tax purposes or would cause REMIC I, REMIC II or REMIC III to
fail to  qualify as a REMIC at any time that any of the Class I Notes or Group I
Certificates  are outstanding or any obligations are due and owing to the Credit
Enhancer under the Insurance Agreement.  The Certificateholders shall not direct
the Owner  Trustee to take action  that would  violate  the  provisions  of this
Section 4.05.

        (b) The Owner  Trustee  shall not convey or transfer  any of the Trust's
properties  or assets,  including  those  included in the Trust  Estate,  to any
person  unless  (a) it shall have  received  an Opinion of Counsel to the effect
that such  transaction will not have any material adverse tax consequence to the
Trust or any  Certificateholder  and (b) such  conveyance or transfer  shall not
violate the provisions of Section 3.16(b) of the Indenture.

        Section 4.06. Prior Notice to Certificateholders and the Credit Enhancer
with Respect to Certain  Matters.  With respect to the  following  matters,  the
Owner Trustee shall not take action  unless,  at least 30 days before the taking
of such action, the Owner Trustee shall have notified the Certificateholders and
the  Credit   Enhancer  in  writing  of  the  proposed  action  and  Holders  of
Certificates  representing  a majority of the Security  Balance  thereof and the
Credit  Enhancer  shall not have  notified the Owner Trustee in writing prior to
the 30th day after  such  notice is given that such  Certificateholders  and the
Credit Enhancer have withheld consent or provided alternative direction:

        (a) the  initiation of any claim or lawsuit by the Trust (except  claims
or lawsuits brought in connection with the collection of cash  distributions due
and owing under the Home Equity Loans) and the  compromise of any action,  claim
or  lawsuit  brought  by or  against  the  Trust  (except  with  respect  to the
aforementioned  claims or lawsuits for collection of cash  distributions due and
owing under the Home Equity Loans);

        (b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such  amendment is required to be filed under the Statutory  Trust
Statute);

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

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

        (e) the  appointment  pursuant  to the  Indenture  of a  successor  Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust Agreement
of a successor  Certificate Registrar or Certificate Paying Agent or the consent
to the  assignment  by the Note  Registrar,  Paying  Agent,  Indenture  Trustee,
Certificate  Registrar or Certificate  Paying Agent of its obligations under the
Indenture or this Trust Agreement, as applicable.

                                       18
<PAGE>

        Section  4.07.  Action by  Certificateholders  with  Respect  to Certain
Matters.  The Owner Trustee shall not have the power,  except upon the direction
of  Certificateholders  evidencing  not less than a majority of the  outstanding
Security  Balance  of the  Certificates,  and with  the  consent  of the  Credit
Enhancer,  to (a) remove  the  Master  Servicer  under the  Servicing  Agreement
pursuant  to Section  7.01  thereof or (b) except as  expressly  provided in the
Basic  Documents,  sell the Home  Equity  Loans  after  the  termination  of the
Indenture. The Owner Trustee shall take the actions referred to in the preceding
sentence only upon written instructions signed by Certificateholders  evidencing
not less than a majority of the outstanding Security Balance of the Certificates
and with the consent of the Credit Enhancer.

        Section 4.08. Action by  Certificateholders  with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy  relating to the Trust  without the unanimous  prior  approval of all
Certificateholders  and with the consent of the Credit Enhancer and the delivery
to the Owner Trustee by each such  Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.

        Section   4.09.   Restrictions   on   Certificateholders'   Power.   The
Certificateholders shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Trust Agreement or any of the Basic
Documents or would be contrary to Section  2.03,  nor shall the Owner Trustee be
obligated to follow any such direction, if given.

        Section 4.10. Majority Control. Except as expressly provided herein, any
action that may be taken by the  Certificateholders  under this Trust  Agreement
may be taken by the  Certificateholders  evidencing  not less than a majority of
the  outstanding  Security  Balance  of the  Certificates.  Except as  expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this  Trust  Agreement  shall be  effective  if signed by  Certificateholders
evidencing not less than a majority of the outstanding  Security  Balance of the
Certificates at the time of the delivery of such notice.

        Section 4.11.  Doing  Business in Other  Jurisdictions.  Notwithstanding
anything contained herein to the contrary,  neither Wilmington Trust Company nor
the Owner Trustee shall be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will,  even after the
appointment of a co-trustee or separate  trustee in accordance with Section 9.05
hereof,  (i) require the consent or approval or authorization or order of or the
giving of notice to, or the registration  with or the taking of any other action
in  respect  of,  any  state or other  governmental  authority  or agency of any
jurisdiction  other than the State of  Delaware;  (ii) result in any fee, tax or
other  governmental  charge  under  the laws of the State of  Delaware  becoming
payable by Wilmington Trust Company,  or (iii) subject  Wilmington Trust Company
to personal  jurisdiction in any  jurisdiction  other than the State of Delaware
for causes of action  arising  from acts  unrelated to the  consummation  of the
transactions by Wilmington  Trust Company or the Owner Trustee,  as the case may
be, contemplated hereby.

        Section 4.12. Removal of Home Equity Loans.  Certificateholders  holding
100% of the  Certificate  Percentage  Interests of the Class SB-II  Certificates
may, by delivering a written request to the Owner Trustee to such effect,  cause
the  removal  of Home  Equity  Loans in Loan  Group II from the Trust  Estate in
accordance  with  and  subject  to the  provisions  of  Section  3.15(b)  of the

                                       19
<PAGE>

Servicing  Agreement.  Promptly following receipt of any such request, the Owner
Trustee  shall  deliver to the Master  Servicer  the written  notice and request
required to be delivered to the Master  Servicer  pursuant to Section 3.15(b) of
the  Servicing  Agreement.  Any Group II Loans  removed  from the  Trust  Estate
pursuant to Section 3.15(b) of the Servicing  Agreement shall be property of the
Issuer  and,  upon the  written  request of the Class  SB-II  Certificateholders
holding  100%  of  the  Certificate  Percentage  Interests  of the  Class  SB-II
Certificates,  be released to the Class SB-II  Certificateholders  as a dividend
and in accordance with the written instructions of such Certificateholders.

                                    ARTICLE V

                           Application of Trust Funds

        Section 5.01.  Distributions.  (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the  Certificateholders all funds on deposit in
the  Certificate  Distribution  Account and  available  therefor (as provided in
Section 3.05 of the Indenture),  as the Certificate Distribution Amount for such
Payment  Date.  Any  such  amounts  payable  to  the  holders  of  the  Group  I
Certificates shall be distributed, first, to the Certificateholders of the Class
SB-I Certificates,  in an amount equal to the Class SB-I Distribution Amount for
such  Payment  Date and the Class  SB-I  Distribution  Amount  for any  previous
Payment  Date  to  the  extent  not  previously   paid,   and  second,   to  the
Certificateholders  of the Class R-I Certificates,  any amounts  remaining.  All
distributions  made pursuant to this Section to any Class of Certificates  shall
be  distributed  to the  Certificateholders  of such Class pro rata based on the
respective Percentage Interests thereof.

        (b)  In  the  event  that  any   withholding   tax  is  imposed  on  the
distributions (or allocations of income) to a Certificateholder,  such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with this Section 5.01. The  Certificate  Paying Agent is hereby  authorized and
directed to retain or cause to be retained from amounts otherwise  distributable
to the  Certificateholders  sufficient  funds for the payment of any tax that is
legally  owed by the Trust (but such  authorization  shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings, and withholding
payment  of  such  tax,  if  permitted  by  law,  pending  the  outcome  of such
proceedings).  The  amount of any  withholding  tax  imposed  with  respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the  Certificate  Paying Agent and remitted to the
appropriate taxing authority.  If there is a possibility that withholding tax is
payable with respect to a  distribution  (such as a  distribution  to a non-U.S.
Certificateholder),  the  Certificate  Paying  Agent may in its sole  discretion
withhold such amounts in accordance with this paragraph (b).

     (c)  Distributions  to  Certificateholders  shall  be  subordinated  to the
creditors of the Trust, including the Noteholders.

        (d) Allocations of profits and losses,  as determined for federal income
tax  purposes,  shall be made  among  the  Classes  of Group I  Certificates  in
accordance  with the REMIC  provisions and within each Class of  Certificates to
the  Certificateholders on a pro rata basis based on the Certificate  Percentage
Interests thereof.

                                       20
<PAGE>

        (e) On each Payment Date, the following  amounts in the following  order
of priority,  from the amounts  allocable to the Class I Noteholders and Group I
Certificateholders pursuant to Section 3.05 of the Indenture, shall be deemed to
have been  distributed  by REMIC I to REMIC II on account of the REMIC I Regular
Interests or shall be withdrawn from the Distribution Account and distributed to
the holders of the Class R-I Certificates, as the case may be:

               (i) first,  (1) to the Holders of REMIC I Regular  Interests LTB,
        in an amount equal to (A) the  Uncertificated  Accrued Interest for such
        Payment Date, plus (B) any amounts in respect thereof  remaining  unpaid
        from  previous  Payment  Dates  and (2) to the  Holders  of the  REMIC I
        Regular  Interests LTB, any prepayment  charges  received on the Group I
        Loans during the related  Collection  Period; and second, (2) to Holders
        of  REMIC  I  Regular  Interest  LTA  in an  amount  equal  to  (A)  the
        Uncertificated  Accrued  Interest  for such Payment  Date,  plus (B) any
        amounts in respect thereof remaining unpaid from previous Payment Dates;
        and

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

               (A) to the  Holders of REMIC I Regular  Interest  LTA,  until the
        Uncertificated  Principal  Balance  of REMIC I Regular  Interest  LTA is
        reduced to zero;

               (B) to the Holders of REMIC I Regular  Interests LTB sequentially
        in the order of their numerical  designation,  until the  Uncertificated
        Principal  Balance of each  successive  REMIC I Regular  Interest LTB is
        reduced to zero; and

               (C)  any  remaining  amount  to  the  Holders  of the  Class  R-I
Certificates.

        (f) On each Distribution Date, the following  amounts,  in the following
order of priority,  shall be  distributed by REMIC II to REMIC III on account of
the REMIC II Regular Interests:

               (i)  first,  (1) to the  extent  of  the  Available  Distribution
        Amount,  to the  Holders of REMIC II  Regular  Interests  LTA-IO,  in an
        amount  equal to (A)  their  Uncertificated  Accrued  Interest  for such
        Payment Date, plus (B) any amounts in respect thereof  remaining  unpaid
        from previous Payment Dates and (2) pro rata to the Holders of the REMIC
        II Regular  Interests  LTA-IO,  any prepayment  charges  received on the
        Group I Loans during the related  Collection  Period; and second, (2) to
        the Holders of REMIC II Regular  Interest LT1, REMIC II Regular Interest
        LT2,  REMIC II Regular  Interest LT3 and REMIC II Regular  Interest LT4,
        pro  rata,  in an  amount  equal  to (A)  their  Uncertificated  Accrued
        Interest  for such  Distribution  Date,  plus (B) any amounts in respect
        thereof remaining unpaid from previous Payment Dates; and

               (ii) on each  Payment  Date,  to the  Holders of REMIC II Regular
        Interests,  in an amount equal to the remainder of the proceeds relating
        to the REMIC I Regular Interests after the  distributions  made pursuant
        to clause (i) above, allocated as follows (except as provided below):

                                       21
<PAGE>

                      (i) to the Holders of the REMIC II Regular  Interest  LT2,
               REMIC II Regular  Interest LT3 and REMIC II Regular Interest LT4,
               their respective Principal Distribution Amounts;

                      (ii) to the Holders of the REMIC II Regular  Interest  LT1
               any remainder until the Uncertificated  Principal Balance thereof
               is reduced to zero;

                      (iii) any remainder to the Holders of the REMIC II Regular
               Interest LT2, REMIC II Regular  Interest LT3 and REMIC II Regular
               Interest   LT4   pro   rata   according   to   their   respective
               Uncertificated Principal Balances as reduced by the distributions
               deemed  made  pursuant  to  (i)  above,  until  their  respective
               Uncertificated Principal Balances are reduced to zero; and

                    (iv) any remaining  amounts to the Holders of the Class R-II
               Certificates; and

        (g) On each Payment Date,  following the distributions  made pursuant to
clauses (i) through (vi) of Section  3.05(a)(I) of the Indenture,  the remaining
amount  shall be deemed  distributed  by REMIC  III  first to REMIC III  Regular
Interest  SB-IO until its accrued  and unpaid  interest  for the current and all
prior  Payment  Dates shall have been  reduced to zero,  second to the REMIC III
Regular Interest SB-PO until the Uncertificated  Principal Balance thereof shall
have  been  reduced  to zero  and  third to the  Class  R-III  Certificates  any
remaining amount. From the amounts deemed distributed from REMIC III pursuant to
the preceding  sentence,  first the Class R-III  Certificateholder  and then the
Class SB-I (as the owner of REMIC III Regular  Interests  SB-IO and SB-PO) shall
be deemed to have paid the amounts required to be paid pursuant to clauses (vii)
through (x) of Section 3.05(a)(I).

        Section   5.02.   Method  of  Payment.   Subject  to  Section   8.01(c),
distributions  required to be made to  Certificateholders on any Payment Date as
provided in Section  5.01 shall be made to each  Certificateholder  of record on
the preceding  Record Date either by wire  transfer,  in  immediately  available
funds,  to  the  account  of  such  Holder  at a bank  or  other  entity  having
appropriate facilities therefor, if such  Certificateholder  shall have provided
to the  Certificate  Registrar  appropriate  written  instructions at least five
Business  Days prior to such  Payment  Date or, if not, by check  mailed to such
Certificateholder  at the address of such Holder  appearing  in the  Certificate
Register.

        Section  5.03.  Signature on Returns.  The Owner  Trustee  shall sign on
behalf of the Trust the tax returns of the Trust.  The REMIC  Administrator,  as
agent for the Owner  Trustee,  shall sign on behalf of the Trust the tax returns
of REMIC I,  REMIC II and REMIC  III.  The Owner  Trustee  shall  give the REMIC
Administrator  all such  powers of  attorney  as are  needed to enable the REMIC
Administrator  to prepare and sign such tax returns.  In the event that approval
from the applicable  District  Director of the Internal  Revenue Service for the
REMIC  Administrator  or the  Master  Servicer  to sign the tax  returns  is not
forthcoming following application, the REMIC Administrator shall prepare and the
Owner  Trustee shall sign the tax returns for REMIC I, REMIC II and REMIC III or
the Master  Servicer  shall  prepare  and the Owner  Trustee  shall sign the tax
returns for the Trust, as applicable.

                                       22
<PAGE>

        Section 5.04.  Statements to  Certificateholders.  On each Payment Date,
the Certificate Paying Agent shall send to each  Certificateholder the statement
or statements  provided to the Owner Trustee and the Certificate Paying Agent by
the Master  Servicer  pursuant to Section 4.01 of the Servicing  Agreement  with
respect to such Payment Date.

        Section 5.05. Tax  Reporting.  So long as the Depositor or any Affiliate
of   the   Depositor   owns   100%   of   the   Certificates    (the   "Original
Certificateholder"),  then no separate  federal and state income tax returns and
information returns or statements will be filed with respect to the Trust, other
than  the  portion  of the  Trust  constituting  the  REMICs.  If  the  Original
Certificateholder  is no longer  the sole  Class  SB-II  Certificateholder,  the
subsequent  holders of the Class SB-II  Certificates by their acceptance hereof,
agree to  appoint  the  Original  Certificateholder  as their  agent for the tax
matters partner and the Original  Certificateholder,  as agent for such holders,
agrees to perform all duties  necessary  to comply with federal and state income
tax laws.

        Any Class  SB-II  Certificateholder  that holds 100% of the Class  SB-II
Certificates  agrees by its purchase of 100% of the Class SB-II  Certificates to
treat the Trust, other than the portion of the Trust constituting the REMICs, as
an entity  wholly  owned by such Class SB-II  Certificateholder  for purposes of
federal and state income tax,  franchise tax and any other tax measured in whole
or in part by income, with the assets of the entity being the assets held by the
Trust, and the Notes being debt of the Trust.

        Section 5.06.  Reports to the Master  Servicer.  In connection  with the
preparation and filing by the Master Servicer, on behalf of the Depositor and in
respect  of the  Trust,  of  periodic  reports  required  to be filed  under the
provisions of the Exchange Act and the rules and  regulations  of the Commission
thereunder,  the  Depositor  shall  timely  provide to the Master  Servicer  all
material information  available to them which is required to be included in such
reports.

                                   ARTICLE VI

                          Concerning the Owner Trustee

        Section 6.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
the  trusts  hereby  created  and agrees to perform  its duties  hereunder  with
respect  to such  trusts but only upon the terms of this  Trust  Agreement.  The
Owner Trustee and the Certificate Paying Agent also agree to disburse all moneys
actually  received by it  constituting  part of the Owner Trust  Estate upon the
terms of the Basic Documents and this Trust  Agreement.  The Owner Trustee shall
not be answerable or accountable hereunder or under any Basic Document under any
circumstances,  except (i) for its own  willful  misconduct,  negligence  or bad
faith or negligent  failure to act or (ii) in the case of the  inaccuracy of any
representation or warranty contained in Section 6.03 expressly made by the Owner
Trustee.  In  particular,  but  not by way of  limitation  (and  subject  to the
exceptions set forth in the preceding sentence):

        (a) No provision of this Trust  Agreement  or any Basic  Document  shall
require  the  Owner  Trustee  to  expend or risk  funds or  otherwise  incur any
financial  liability in the  performance of any of its rights,  duties or powers
hereunder or under any Basic Document if the Owner Trustee shall have reasonable

                                       23
<PAGE>

grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;

        (b)  Under no  circumstances  shall  the Owner  Trustee  be  liable  for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;

        (c) The Owner Trustee shall not be responsible  for or in respect of the
validity or sufficiency of this Trust Agreement or for the due execution  hereof
by the Depositor or for the form, character, genuineness,  sufficiency, value or
validity of any of the Owner Trust Estate,  or for or in respect of the validity
or sufficiency of the Basic Documents,  the Notes, the Certificates,  other than
the certificate of authentication on the Certificates,  if executed by the Owner
Trustee and the Owner Trustee  shall in no event assume or incur any  liability,
duty, or obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the Basic Documents;

        (d) The execution,  delivery,  authentication  and  performance by it of
this Trust Agreement will not require the authorization, consent or approval of,
the giving of notice to, the filing or  registration  with, or the taking of any
other action with respect to, any governmental authority or agency;

        (e) The Owner  Trustee shall not be liable for the default or misconduct
of the Depositor,  the Indenture Trustee or the Master Servicer under any of the
Basic  Documents or otherwise  and the Owner Trustee shall have no obligation or
liability to perform the  obligations of the Trust under this Trust Agreement or
the Basic  Documents that are required to be performed by the Indenture  Trustee
under the Indenture or the Seller under the Home Equity Loan Purchase Agreement;
and

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

        Section 6.02.  Furnishing of Documents.  The Owner Trustee shall furnish
to the  Securityholders  promptly upon receipt of a written  reasonable  request
therefor,  duplicates  or copies of all  reports,  notices,  requests,  demands,
certificates,  financial  statements and any other instruments  furnished to the
Trust under the Basic Documents.

     Section 6.03.  Representations  and  Warranties.  The Owner Trustee  hereby
represents   and   warrants   to  the   Depositor,   for  the   benefit  of  the
Certificateholders, that:

                                       24
<PAGE>

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

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

        (c)  Neither  the  execution  nor  the  delivery  by  it of  this  Trust
Agreement,  nor the consummation by it of the transactions  contemplated  hereby
nor compliance by it with any of the terms or provisions  hereof will contravene
any federal or Delaware  law,  governmental  rule or  regulation  governing  the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or  constitute  any  default  under its charter  documents  or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound;
        (d) This Trust  Agreement,  assuming due  authorization,  execution  and
delivery by the Owner Trustee and the Depositor,  constitutes a valid, legal and
binding  obligation of the Owner Trustee,  enforceable  against it in accordance
with  the  terms   hereof   subject  to   applicable   bankruptcy,   insolvency,
reorganization,   moratorium  and  other  laws  affecting  the   enforcement  of
creditors' rights generally and to general  principles of equity,  regardless of
whether such enforcement is considered in a proceeding in equity or at law;

        (e) The Owner  Trustee  is not in default  with  respect to any order or
decree of any court or any order,  regulation  or demand of any federal,  state,
municipal or governmental  agency,  which default might have  consequences  that
would  materially  and adversely  affect the  condition  (financial or other) or
operations  of the Owner Trustee or its  properties  or might have  consequences
that would materially adversely affect its performance hereunder; and

        (f) No  litigation  is  pending  or, to the best of the Owner  Trustee's
knowledge,  threatened  against  the Owner  Trustee  which  would  prohibit  its
entering into this Trust  Agreement or  performing  its  obligations  under this
Trust Agreement.

        Section 6.04.  Reliance;  Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature,  instrument,  notice,
resolution,  request,  consent,  order,  certificate,  report, opinion, bond, or
other  document or paper  believed by it to be genuine and  believed by it to be
signed by the proper party or parties.  The Owner Trustee may accept a certified
copy of a resolution  of the board of directors or other  governing  body of any
corporate  party as  conclusive  evidence  that  such  resolution  has been duly
adopted  by such body and that the same is in full force and  effect.  As to any
fact or  matter  the  method  of  determination  of  which  is not  specifically
prescribed  herein,  the Owner  Trustee  may for all  purposes  hereof rely on a
certificate,  signed by the president or any vice  president or by the treasurer
or other  authorized  officers of the relevant  party, as to such fact or matter
and such  certificate  shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.

                                       25
<PAGE>

        (b) In the exercise or  administration of the Trust hereunder and in the
performance  of its duties and  obligations  under this Trust  Agreement  or the
Basic  Documents,  the Owner Trustee (i) may act directly or through its agents,
attorneys,  custodians or nominees  (including  persons  acting under a power of
attorney)  pursuant to agreements  entered into with any of them,  and the Owner
Trustee  shall not be liable  for the  conduct  or  misconduct  of such  agents,
attorneys,  custodians or nominees  (including  persons  acting under a power of
attorney)  if  such  persons  have  been  selected  by the  Owner  Trustee  with
reasonable  care,  and (ii) may  consult  with  counsel,  accountants  and other
skilled  persons to be selected with  reasonable  care and employed by it at the
expense of the Trust.  The Owner Trustee shall not be liable for anything  done,
suffered or omitted in good faith by it in accordance with the opinion or advice
of any such counsel,  accountants or other such Persons and not contrary to this
Trust Agreement or any Basic Document.

        Section 6.05. Not Acting in Individual  Capacity.  Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual  capacity,  and
all  Persons  having  any  claim  against  the  Owner  Trustee  by reason of the
transactions  contemplated  by this Trust  Agreement or any Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.

        Section  6.06.  Owner  Trustee  Not Liable for  Certificates  or Related
Documents. The recitals contained herein and in the Certificates (other than the
signatures  of the  Owner  Trustee  on the  Certificates)  shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness  thereof.  The Owner Trustee makes no  representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the
Certificates   (other  than  the   signatures   of  the  Owner  Trustee  on  the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any  responsibility or liability with respect to the sufficiency
of the  Owner  Trust  Estate or its  ability  to  generate  the  payments  to be
distributed to Certificateholders  under this Trust Agreement or the Noteholders
under the  Indenture,  including,  the compliance by the Depositor or the Seller
with any  warranty  or  representation  made under any Basic  Document or in any
related document or the accuracy of any such warranty or representation,  or any
action  of the  Certificate  Paying  Agent,  the  Certificate  Registrar  or the
Indenture Trustee taken in the name of the Owner Trustee.

        Section 6.07.  Owner Trustee May Own  Certificates  and Notes. The Owner
Trustee in its  individual or any other capacity may become the owner or pledgee
of  Certificates  or Notes  and may deal with the  Depositor,  the  Seller,  the
Certificate Paying Agent, the Certificate Registrar and the Indenture Trustee in
transactions with the same rights as it would have if it were not Owner Trustee.

                                       26
<PAGE>

                                   ARTICLE VII

                          Compensation of Owner Trustee

        Section 7.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive  as  compensation  for its  services  hereunder  such  fees as have been
separately  agreed upon before the date hereof,  and the Owner  Trustee shall be
reimbursed for its reasonable  expenses hereunder and under the Basic Documents,
including  the  reasonable  compensation,  expenses  and  disbursements  of such
agents, representatives, experts and counsel as the Owner Trustee may reasonably
employ in  connection  with the exercise and  performance  of its rights and its
duties  hereunder  and under the Basic  Documents  which shall be payable by the
Master Servicer pursuant to Section 3.09 of the Servicing Agreement.

        Section  7.02.  Indemnification.  The  holder  of  the  majority  of the
Certificate  Percentage  Interest of the Class SB  Certificates in the aggregate
shall indemnify,  defend and hold harmless the Owner Trustee and its successors,
assigns, agents and servants (collectively,  the "Indemnified Parties") from and
against, any and all liabilities,  obligations,  losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs,  expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively,  "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified  Party in any way relating
to or arising out of this Trust Agreement,  the Basic Documents, the Owner Trust
Estate,  the  administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, provided, that:

               (a) the  holder of the  majority  of the  Certificate  Percentage
Interest of the Certificates shall not be liable for or required to indemnify an
Indemnified  Party from and against Expenses arising or resulting from the Owner
Trustee's  willful  misconduct,  negligence  or bad  faith or as a result of any
inaccuracy of a representation  or warranty  contained in Section 6.03 expressly
made by the Owner Trustee;

               (b) with respect to any such claim,  the Indemnified  Party shall
have given the holder of the majority of the Certificate  Percentage Interest of
the  Certificates  written notice thereof  promptly after the Indemnified  Party
shall have actual knowledge thereof;

               (c) while maintaining control over its own defense, the holder of
the majority of the Certificate  Percentage  Interest of the Certificates  shall
consult with the Indemnified Party in preparing such defense; and

               (d)  notwithstanding  anything  in this  Trust  Agreement  to the
contrary,  the holder of the majority of the Certificate  Percentage Interest of
the  Certificates  shall  not  be  liable  for  settlement  of any  claim  by an
Indemnified  Party  entered into without the prior  consent of the holder of the
majority  of the  Certificate  Percentage  Interest  of the  Certificates  which
consent shall not be unreasonably withheld.

        The indemnities  contained in this Section shall survive the resignation
or termination of the Owner Trustee or the termination of this Trust  Agreement.
In the event of any claim,  action or  proceeding  for which  indemnity  will be
sought  pursuant  to this  Section  7.02,  the Owner  Trustee's  choice of legal
counsel,  if other  than the legal  counsel  retained  by the Owner  Trustee  in

                                       27
<PAGE>

connection  with the  execution and delivery of this Trust  Agreement,  shall be
subject  to the  approval  of the  holder  of the  majority  of the  Certificate
Percentage  Interest  of the  Class  SB  Certificates  in the  aggregate,  which
approval shall not be unreasonably withheld. In addition, upon written notice to
the Owner  Trustee and with the consent of the Owner Trustee which consent shall
not be  unreasonably  withheld,  the holder of the  majority of the  Certificate
Percentage  Interest of the Class SB Certificates in the aggregate has the right
to assume the  defense  of any claim,  action or  proceeding  against  the Owner
Trustee.

                                  ARTICLE VIII

                         Termination of Trust Agreement

        Section 8.01.  Termination of Trust Agreement.  (a) This Trust Agreement
(other  than  this  Article  VIII) and the Trust  shall  terminate  and be of no
further force or effect upon the earliest of (i) the final  distribution  of all
moneys or other  property or proceeds  of the Owner Trust  Estate in  accordance
with the terms of the Indenture and this Trust Agreement or (ii) the purchase by
the Master  Servicer of all Home Equity  Loans  pursuant to Section  8.08 of the
Servicing Agreement; provided, however, that in no event shall the trust created
hereby  continue  beyond the  expiration  of 21 years from the death of the last
survivor of the  descendants  of Joseph P. Kennedy,  the late  ambassador of the
United  States  to the  Court  of St.  James,  living  on the date  hereof.  The
bankruptcy,    liquidation,    dissolution,   death   or   incapacity   of   any
Certificateholder shall not (x) operate to terminate this Trust Agreement or the
Trust or (y) entitle such Certificateholder's  legal representatives or heirs to
claim an  accounting  or to take any  action  or  proceeding  in any court for a
partition  or  winding  up of all or any part of the  Trust or the  Owner  Trust
Estate or (z) otherwise  affect the rights,  obligations  and liabilities of the
parties hereto.

        (b) Except as provided in Section 8.01(a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.

        (c) Notice of any termination of the Trust,  specifying the Payment Date
upon  which   Certificateholders  shall  surrender  their  Certificates  to  the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate  Paying Agent by letter to  Certificateholders
and the Credit Enhancer mailed within five Business Days of receipt of notice of
such  termination  from the Owner Trustee,  stating (i) the Payment Date upon or
with  respect  to which  final  payment of the  Certificates  shall be made upon
presentation  and surrender of the Certificates at the office of the Certificate
Paying Agent therein  designated,  (ii) the amount of any such final payment and
(iii) that the Record Date  otherwise  applicable  to such  Payment  Date is not
applicable,  payments  being made only upon  presentation  and  surrender of the
Certificates  at the office of the Certificate  Paying Agent therein  specified.
The Certificate Paying Agent shall give such notice to the Owner Trustee and the
Certificate  Registrar  at the time such notice is given to  Certificateholders.
Upon  presentation  and surrender of the  Certificates,  the Certificate  Paying
Agent shall cause to be distributed to Certificateholders  amounts distributable
on such Payment Date pursuant to Section 5.01. No such  termination is permitted
if it would result in a draw on the related  Policy  unless the Credit  Enhancer
consents in writing.

                                       28
<PAGE>

        In the event  that all of the  Certificateholders  shall  not  surrender
their  Certificates for cancellation  within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give a
second written  notice to the remaining  Certificateholders  to surrender  their
Certificates for cancellation  and receive the final  distribution  with respect
thereto.  Subject to applicable laws with respect to escheat of funds, if within
one year  following the Payment Date on which final payment of the  Certificates
was to have been made pursuant to Section 3.10, all the  Certificates  shall not
have been surrendered for  cancellation,  the Certificate  Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost  thereof  shall be paid out of the funds and other  assets  that  shall
remain subject to this Trust  Agreement.  Any funds remaining in the Certificate
Distribution  Account after  exhaustion of such remedies shall be distributed by
the  Certificate  Paying Agent to the holder of the majority of the  Certificate
Percentage Interest of the Certificates.

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

        Section 8.02. Additional Termination Requirements.

(a) REMIC I shall be  terminated in  accordance  with the  following  additional
requirements  including upon the exercise by the Master  Servicer of an optional
redemption  of the Notes  pursuant to Section 8.08 of the  Servicing  Agreement,
unless the Owner  Trustee and the Master  Servicer  have  received an Opinion of
Counsel  (which Opinion of Counsel shall not be an expense of the Owner Trustee)
to the effect that the failure of any REMIC to comply with the  requirements  of
this Section 8.02 will not (i) result in the  imposition  on the Trust Estate of
taxes on "prohibited transactions," as described in Section 860F of the Code, or
(ii)  cause  either  REMIC to fail to  qualify  as a REMIC at any time  that any
Certificate is outstanding:

(i) The Master  Servicer shall  establish a 90-day  liquidation  period for such
REMIC  and  specify  the  first day of such  period  in a  statement,  which the
Indenture  Trustee  shall  attach  to REMIC I's final  Tax  Return  pursuant  to
Treasury  regulations  Section 1.860F-1.  The Master Servicer also shall satisfy
all of the  requirements  of a qualified  liquidation  for a REMIC under Section
860F of the Code and regulations thereunder;

(ii) The Master  Servicer  shall  notify  the Owner  Trustee  and the  Indenture
Trustee at the commencement of such 90-day  liquidation  period and, at or prior
to the time of  making  of the  final  payment  on the  Certificates,  the Owner
Trustee shall sell or otherwise  dispose of all of the  remaining  assets of the
Trust Estate that are included in REMIC I in  accordance  with the terms hereof;
and

(iii) If the Master  Servicer is exercising  its right to purchase the assets of
the Trust  Estate,  the Master  Servicer  shall,  during the 90-day  liquidation
period and at or prior to the Final Payment Date,  purchase all of the assets of
the Trust Estate for cash.

                                       29
<PAGE>

        Each  Holder of a  Security  and the Owner  Trustee  hereby  irrevocably
approves  and appoints the Master  Servicer as its  attorney-in-fact  to adopt a
plan of complete  liquidation  for such REMIC at the expense of the Trust Estate
in accordance with the terms and conditions of this Agreement.

                                   ARTICLE IX

                    Successor Owner Trustees and Additional Owner Trustees

        Section 9.01.  Eligibility  Requirements  for Owner  Trustee.  The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Statutory Trust Statute;  authorized to exercise  corporate trust
powers;  having a  combined  capital  and  surplus of at least  $50,000,000  and
subject to  supervision  or  examination  by federal or state  authorities;  and
having (or having a parent that has) long-term debt obligations with a rating of
at  least  A by  Standard  &  Poor's,  Moody's  and/or  Fitch  Ratings.  If such
corporation shall publish reports of condition at least annually pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the  purpose of this  Section,  the  combined  capital  and  surplus of such
corporation  shall be deemed to be its combined capital and surplus as set forth
in its most recent  report of  condition so  published.  In case at any time the
Owner Trustee shall cease to be eligible in  accordance  with the  provisions of
this Section 9.01, the Owner Trustee shall resign  immediately in the manner and
with the effect specified in Section 9.02.

        Section 9.02. Replacement of Owner Trustee. The Owner Trustee may at any
time resign and be discharged  from the trusts hereby created by giving 30 days'
prior written notice thereof to the Credit Enhancer,  the Indenture  Trustee and
the Depositor. Upon receiving such notice of resignation,  the Indenture Trustee
shall promptly  appoint a successor Owner Trustee with the consent of the Credit
Enhancer which will not be  unreasonably  withheld,  by written  instrument,  in
duplicate,  one copy of which  instrument  shall be delivered  to the  resigning
Owner Trustee and one copy to the successor Owner Trustee. If no successor Owner
Trustee  shall have been so appointed and have  accepted  appointment  within 30
days after the giving of such notice of resignation, the resigning Owner Trustee
may  petition  any court of  competent  jurisdiction  for the  appointment  of a
successor Owner Trustee.

        If at  any  time  the  Owner  Trustee  shall  cease  to be  eligible  in
accordance  with the  provisions  of Section 9.01 and shall fail to resign after
written request therefor by the Indenture  Trustee,  or if at any time the Owner
Trustee  shall be  legally  unable  to act,  or shall be  adjudged  bankrupt  or
insolvent,  or a  receiver  of the Owner  Trustee  or of its  property  shall be
appointed,  or any  public  officer  shall  take  charge or control of the Owner
Trustee  or of its  property  or  affairs  for the  purpose  of  rehabilitation,
conservation  or  liquidation,  then the Indenture  Trustee may and shall at the
direction of the Credit  Enhancer  remove the Owner  Trustee.  If the  Indenture
Trustee shall remove the Owner  Trustee  under the authority of the  immediately
preceding  sentence,  the Indenture  Trustee shall promptly  appoint a successor
Owner  Trustee  acceptable  to the Credit  Enhancer  by written  instrument,  in
duplicate, one copy of which instrument shall be delivered to the outgoing Owner
Trustee so removed and one copy to the successor  Owner  Trustee,  and shall pay
all fees owed to the outgoing Owner Trustee.

                                       30
<PAGE>

        Any  resignation  or removal of the Owner Trustee and  appointment  of a
successor Owner Trustee  pursuant to any of the provisions of this Section shall
not become  effective  until  acceptance of appointment  by the successor  Owner
Trustee  pursuant to Section 9.03 and payment of all fees and  expenses  owed to
the outgoing Owner Trustee.

        Section 9.03.  Successor  Owner  Trustee.  Any  successor  Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Indenture Trustee and to its predecessor  Owner Trustee an instrument  accepting
such appointment  under this Trust  Agreement,  and thereupon the resignation or
removal of the  predecessor  Owner  Trustee  shall  become  effective,  and such
successor  Owner  Trustee,  without any further act, deed or  conveyance,  shall
become fully vested with all the rights,  powers,  duties and obligations of its
predecessor under this Trust Agreement,  with like effect as if originally named
as Owner Trustee.  The predecessor  Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and statements
and monies  held by it under this Trust  Agreement;  and the  predecessor  Owner
Trustee shall execute and deliver such  instruments  and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.

        No successor Owner Trustee shall accept  appointment as provided in this
Section 9.03 unless at the time of such  acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.

        Upon acceptance of appointment by a successor Owner Trustee  pursuant to
this  Section  9.03,  the  Indenture  Trustee  shall mail notice  thereof to all
Certificateholders,   the  Credit  Enhancer,  the  Noteholders  and  the  Rating
Agencies. If the Indenture Trustee shall fail to mail such notice within 10 days
after  acceptance  of such  appointment  by the  successor  Owner  Trustee,  the
successor  Owner  Trustee shall cause such notice to be mailed at the expense of
the Indenture Trustee.

        Section 9.04. Merger or Consolidation of Owner Trustee.  Any Person into
which the Owner  Trustee  may be merged  or  converted  or with  which it may be
consolidated,   or  any  Person   resulting  from  any  merger,   conversion  or
consolidation  to which  the  Owner  Trustee  shall be a  party,  or any  Person
succeeding to all or  substantially  all of the corporate  trust business of the
Owner Trustee,  shall be the successor of the Owner Trustee  hereunder,  without
the execution or filing of any  instrument or any further act on the part of any
of  the  parties  hereto,  anything  herein  to  the  contrary  notwithstanding;
provided,  that such  Person  shall be eligible  pursuant  to Section  9.01 and,
provided,  further,  that the Owner  Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.

        Section  9.05.   Appointment   of   Co-Trustee   or  Separate   Trustee.
Notwithstanding  any other provisions of this Trust Agreement,  at any time, for
the purpose of meeting any legal  requirements of any  jurisdiction in which any
part of the Owner  Trust  Estate may at the time be located,  the Owner  Trustee
shall have the power and shall  execute and deliver all  instruments  to appoint
one or more Persons to act as co-trustee,  jointly with the Owner Trustee, or as
separate trustee or trustees,  of all or any part of the Owner Trust Estate, and
to vest in such Person,  in such  capacity,  such title to the Trust or any part
thereof  and,  subject to the other  provisions  of this  Section,  such powers,
duties,  obligations,  rights  and  trusts as the  Owner  Trustee  may  consider

                                       31
<PAGE>

necessary or  desirable.  No  co-trustee  or separate  trustee  under this Trust
Agreement shall be required to meet the terms of eligibility pursuant to Section
9.01 and no notice of the  appointment  of any  co-trustee  or separate  trustee
shall be required pursuant to Section 9.03.

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

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

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

        (c) The Owner  Trustee  may at any time  accept  the  resignation  of or
remove any separate trustee or co-trustee.

        Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as  effectively  as if given to each of them.  Every  instrument  appointing any
separate  trustee or  co-trustee  shall  refer to this Trust  Agreement  and the
conditions of this Article IX. Each separate  trustee and  co-trustee,  upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified  in its  instrument  of  appointment,  either  jointly  with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Trust  Agreement,  specifically  including every provision of this Trust
Agreement  relating to the conduct of,  affecting the liability of, or affording
protection to, the Owner Trustee.  Each such instrument  shall be filed with the
Owner Trustee.

        Any  separate  trustee or  co-trustee  may at any time appoint the Owner
Trustee as 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
Trust  Agreement  on its  behalf  and in its name.  If any  separate  trustee or
co-trustee shall die, become incapable of acting,  resign or be removed,  all of
its  estates,  properties,  rights,  remedies  and  trusts  shall vest in and be
exercised by the Owner  Trustee,  to the extent  permitted  by law,  without the
appointment of a new or successor co-trustee or separate trustee.

                                       32
<PAGE>

                                    ARTICLE X

                                  Miscellaneous

        Section  10.01.Amendments.  (a) This Trust Agreement may be amended from
time to time by the parties hereto as specified in this Section 10.01,  provided
that any amendment, except as provided in subparagraph (e) below, be accompanied
by an Opinion of Counsel, to the Owner Trustee to the effect that such amendment
(i)  complies  with the  provisions  of this Section and (ii) will not cause the
Trust to be subject to an entity  level tax or cause any of REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC for federal income tax purposes.

        (b) If the purpose of the amendment (as detailed  therein) is to correct
any mistake,  eliminate any  inconsistency,  cure any ambiguity or deal with any
matter not covered in this Trust  Agreement  (i.e., to give effect to the intent
of the parties), it shall not be necessary to obtain the consent of any Holders,
but the Owner  Trustee  shall be  furnished  with (A) a letter  from the  Rating
Agencies that the amendment will not result in the  downgrading or withdrawal of
the rating then  assigned to any Security if  determined  without  regard to the
related Policy and (B) an Opinion of Counsel to the effect that such action will
not adversely affect in any material  respect the interests of any Holders,  and
the consent of the Credit Enhancer shall be obtained.

        (c) If the purpose of the amendment is to prevent the  imposition of any
federal  or state  taxes at any time that any  Security  is  outstanding  (i.e.,
technical  in nature),  it shall not be  necessary  to obtain the consent of any
Holder, but the Owner Trustee shall be furnished with an Opinion of Counsel that
such  amendment is necessary or helpful to prevent the  imposition of such taxes
and is not  materially  adverse  to any  Holder  and the  consent  of the Credit
Enhancer shall be obtained.

        (d) If the purpose of the amendment is to add or eliminate or change any
provision  of the Trust  Agreement  other  than as  contemplated  in (b) and (c)
above, the amendment shall require (A) the consent of the Credit Enhancer and an
Opinion of Counsel to the effect that such action will not  adversely  affect in
any  material  respect the  interests of any Holders and (B) either (a) a letter
from the Rating Agency that the amendment will not result in the  downgrading or
withdrawal  of the rating then  assigned to any Security if  determined  without
regard to the  related  Policy or (b) the  consent of  Holders  of  Certificates
evidencing a majority of the Certificate Percentage Interest of the Certificates
and the Indenture Trustee;  provided,  however, that no such amendment shall (i)
reduce in any manner the  amount of, or delay the timing of,  payments  received
that are required to be  distributed on any  Certificate  without the consent of
the  related  Certificateholder  and the  Credit  Enhancer,  or (ii)  reduce the
aforesaid  percentage  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.

        (e) If the purpose of the amendment is to provide for the holding of any
of the  Certificates in book-entry form, it shall require the consent of Holders
of all such Certificates then outstanding; provided, that the Opinion of Counsel
specified in subparagraph (a) above shall not be required.

        (f) If the purpose of the  amendment  is to provide for the  issuance of
additional  certificates  representing an interest in the Trust, it shall not be

                                       33
<PAGE>

necessary to obtain the consent of any Holder,  but the Owner  Trustee  shall be
furnished with (A) an Opinion of Counsel to the effect that such action will not
adversely  affect in any material respect the interests of any Holders and (B) a
letter  from the  Rating  Agencies  that the  amendment  will not  result in the
downgrading  or  withdrawal  of the rating  then  assigned to any  Security,  if
determined  without  regard to the related  Policy and the consent of the Credit
Enhancer shall be obtained.

        (g) Promptly after the execution of any such  amendment or consent,  the
Owner  Trustee  shall  furnish  written  notification  of the  substance of such
amendment  or consent to each  Certificateholder,  the  Indenture  Trustee,  the
Credit Enhancer and each of the Rating  Agencies.  It shall not be necessary for
the consent of  Certificateholders  or the  Indenture  Trustee  pursuant to this
Section  10.01 to approve  the  particular  form of any  proposed  amendment  or
consent,  but it shall be sufficient if such consent shall approve the substance
thereof.  The manner of  obtaining  such  consents  (and any other  consents  of
Certificateholders  provided  for in this Trust  Agreement or in any other Basic
Document)  and of  evidencing  the  authorization  of the  execution  thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.

        (h) In  connection  with the execution of any amendment to any agreement
to which  the  Trust is a party,  other  than this  Trust  Agreement,  the Owner
Trustee  shall be entitled to receive and  conclusively  rely upon an Opinion of
Counsel to the effect that such  amendment  is  authorized  or  permitted by the
documents  subject to such  amendment and that all  conditions  precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.

        Promptly  after the  execution of any  amendment to the  Certificate  of
Trust,  the Owner  Trustee  shall  cause the filing of such  amendment  with the
Secretary of State of the State of Delaware.

        Section   10.02.No   Legal   Title   to   Owner   Trust   Estate.    The
Certificateholders  shall not have  legal  title to any part of the Owner  Trust
Estate. The  Certificateholders  shall be entitled to receive distributions with
respect to their undivided  beneficial  interest therein only in accordance with
Articles V and VIII.  No  transfer,  by operation  of law or  otherwise,  of any
right,  title or interest of the  Certificateholders  to and in their  ownership
interest  in the Owner  Trust  Estate  shall  operate  to  terminate  this Trust
Agreement or the trusts  hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Owner Trust Estate

        Section  10.03.Limitations on Rights of Others. Except for Section 2.07,
the  provisions of this Trust  Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders,  the Credit Enhancer and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Trust  Agreement  (other than Section 2.07),  whether express or
implied,  shall be  construed to give to any other Person any legal or equitable
right,  remedy or claim in the Owner Trust Estate or under or in respect of this
Trust Agreement or any covenants, conditions or provisions contained herein.

        Section  10.04.Notices.  (a) Unless  otherwise  expressly  specified  or
permitted  by the terms  hereof,  all  notices  shall be in writing and shall be
deemed given upon  receipt,  if to the Owner  Trustee,  addressed to  Wilmington
Trust Company,  Corporate Trust Administration,  Rodney Square North, 1100 North

                                       34
<PAGE>

Market  Street,   Wilmington,   Delaware  19890,   Attention:   Corporate  Trust
Administration;  if to the Depositor,  addressed to Residential Funding Mortgage
Securities II, Inc., 8400 Normandale  Lake  Boulevard,  Suite 250,  Minneapolis,
Minnesota  55437;  if to the Credit  Enhancer,  addressed to Financial  Guaranty
Insurance  Company,  125 Park  Avenue,  New  York,  New York  10017,  Attention:
Research and Risk Management (Home Equity Loan Trust 2002-HS3); if to the Rating
Agencies,  addressed to Standard & Poor's  Ratings  Services,  a division of The
McGraw-Hill  Companies,  Inc.,  55  Water  Street,  New  York,  New  York  10041
Attention:  Structured  Finance  Department - MBS or, as to each party,  at such
other address as shall be  designated by such party in a written  notice to each
other party.

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

        (c) A copy of any  notice  delivered  to the Owner  Trustee or the Trust
shall also be delivered to the Depositor.

        Section  10.05.Severability.  Any provision of this Trust Agreement that
is  prohibited  or  unenforceable   in  any  jurisdiction   shall,  as  to  such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

        Section  10.06.Separate  Counterparts.   This  Trust  Agreement  may  be
executed by the parties hereto in separate  counterparts,  each of which when so
executed and delivered  shall be an original,  but all such  counterparts  shall
together constitute but one and the same instrument.

        Section  10.07.Successors and Assigns. All representations,  warranties,
covenants and  agreements  contained  herein shall be binding upon, and inure to
the benefit of, each of the Depositor,  the Owner Trustee and its successors and
each  Certificateholder  and its successors and permitted assigns, all as herein
provided and the Credit  Enhancer.  Any  request,  notice,  direction,  consent,
waiver  or other  instrument  or action by a  Certificateholder  shall  bind the
successors and assigns of such Certificateholder.

        Section  10.08.No  Petition.  The Owner  Trustee,  by entering into this
Trust Agreement and each Certificateholder,  by accepting a Certificate,  hereby
covenant  and  agree  that  they  will not at any  time  institute  against  the
Depositor or the Trust, or join in any institution  against the Depositor or the
Trust of, any  bankruptcy  proceedings  under any United States federal or state
bankruptcy  or  similar  law  in  connection   with  any   obligations   to  the
Certificates, the Notes, this Trust Agreement or any of the Basic Documents.

        Section  10.09.No  Recourse.   Each  Certificateholder  by  accepting  a
Certificate  acknowledges that such  Certificateholder's  Certificates represent
beneficial  interests  in the Trust only and do not  represent  interests  in or
obligations  of the  Depositor,  the Seller,  the Owner  Trustee,  the Indenture
Trustee or any Affiliate thereof and no recourse may be had against such parties

                                       35
<PAGE>

or their assets,  except as may be expressly set forth or  contemplated  in this
Trust Agreement, the Certificates or the Basic Documents.

        Section  10.10.Headings.  The  headings  of  the  various  Articles  and
Sections  herein are for  convenience  of reference only and shall not define or
limit any of the terms or provisions hereof.

        Section  10.11.GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF  DELAWARE,  WITHOUT  REFERENCE  TO ITS
CONFLICT OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND  REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

        Section  10.12.Integration.  This Trust Agreement constitutes the entire
agreement  among the parties hereto  pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.

        Section   10.13.Rights   of  Credit   Enhancer  to  Exercise  Rights  of
Certificateholders.  By accepting its Class SB-II Certificate,  each Class SB-II
Certificateholder  agrees  that unless a Credit  Enhancer  Default  exists,  the
Credit  Enhancer  shall have the right to exercise all rights of the Class SB-II
Certificateholders under this Agreement without any further consent of the Class
SB-II  Certificateholders.  Nothing in this  Section,  however,  shall  alter or
modify in any way, the fiduciary  obligations  of the Owner Trustee to the Class
SB-II  Certificateholders  pursuant to this  Agreement,  or create any fiduciary
obligation of the Owner Trustee to the Credit Enhancer.

                                       36
<PAGE>

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

                                            RESIDENTIAL FUNDING MORTGAGE
                                            SECURITIES II, INC.

                                            By:  /s/ Mark White
                                                 -------------------------------
                                                   Name:  Mark White
                                                   Title: Vice President

                                            WILMINGTON TRUST COMPANY, not in its
                                            individual  capacity  but  solely as
                                            Owner  Trustee,  except with respect
                                            to    the     representations    and
                                            warranties contained in Section 6.03
                                            hereof,

                                            By:  /s/ James P. Lawler
                                                 -------------------------------
                                                   Name:  James P. Lawler
                                                   Title: Vice President

Acknowledged and Agreed:

JPMORGAN CHASE BANK,
Indenture Trustee, as Certificate
Registrar and Certificate
Paying Agent

By:  /s/ Sora Jun
     -------------------------------
       Name:   Sora Jun
       Title:  Trust Officer

                                       37
<PAGE>

                                    EXHIBIT A

                         FORM OF CLASS SB-I CERTIFICATE

               THIS CLASS SB-I  CERTIFICATE IS  SUBORDINATED IN RIGHT OF PAYMENT
TO THE TERM NOTES AND THE VARIABLE  FUNDING  NOTES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED HEREIN).

               THIS  CLASS  SB-I   CERTIFICATE  IS  ISSUED  IN  THE  CERTIFICATE
PERCENTAGE  INTEREST  SET  FORTH  BELOW;  HOWEVER,  THE  CERTIFICATE  PERCENTAGE
INTEREST OF THIS  CERTIFICATE  MAY CHANGE IN ACCORDANCE WITH SECTION 3.12 OF THE
AGREEMENT.  THE HOLDER OF THIS CLASS SB-I  CERTIFICATE  HEREBY  CONSENTS  TO ANY
CHANGE IN ITS CERTIFICATE PERCENTAGE INTEREST IN ACCORDANCE WITH SUCH SECTION.

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

               THIS  CLASS  SB-I  CERTIFICATE  HAS  NOT  BEEN  AND  WILL  NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR THE SECURITIES LAWS
OF ANY  STATE  AND MAY NOT BE RESOLD  OR  TRANSFERRED  UNLESS  IT IS  REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR  TRANSFERRED IN  TRANSACTIONS  WHICH
ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND UNDER  APPLICABLE  LAWS AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE AMENDED AND
RESTATED TRUST AGREEMENT ("THE AGREEMENT").

               NO TRANSFER OF THIS CLASS SB-I  CERTIFICATE  SHALL BE MADE UNLESS
THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER
FROM THE  TRANSFEREE  OF THIS CLASS  SB-I  CERTIFICATE  TO THE EFFECT  THAT SUCH
TRANSFEREE  IS NOT AN EMPLOYEE  BENEFIT OR OTHER PLAN SUBJECT TO THE  PROHIBITED
TRANSACTION  RESTRICTIONS AND THE FIDUCIARY  RESPONSIBILITY  REQUIREMENTS OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),  ANY
PERSON ACTING, DIRECTLY OR INDIRECTLY,  ON BEHALF OF ANY SUCH PLAN OR ANY PERSON
USING "PLAN ASSETS,"  WITHIN THE MEANING OF THE DEPARTMENT OF LABOR  REGULATIONS
SECTION  2510.3-101,  TO  ACQUIRE  THIS CLASS SB-I  CERTIFICATE  (EACH,  A "PLAN
INVESTOR"), OR (II) IF THIS CLASS SB-I CERTIFICATE IS PRESENTED FOR REGISTRATION

                                       1
<PAGE>

IN THE NAME OF A PLAN INVESTOR, AN OPINION OF COUNSEL, OR A CERTIFICATION IN THE
FORM OF EXHIBIT G TO THE  AGREEMENT IN LIEU OF SUCH  OPINION OF COUNSEL,  TO THE
EFFECT  THAT  THE  PURCHASE  OR  HOLDING  OF  THIS  CLASS  SB-I  CERTIFICATE  IS
PERMISSIBLE  UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED
TRANSACTION  UNDER  SECTION  406 OF  ERISA  OR  SECTION  4975  OF THE  CODE  (OR
COMPARABLE  PROVISIONS OF ANY  SUBSEQUENT  ENACTMENTS)  AND WILL NOT SUBJECT THE
DEPOSITOR,  THE OWNER TRUSTEE, THE SERVICER OR THE CERTIFICATE  REGISTRAR TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

               THE TRANSFEREE OF THIS CLASS SB-I CERTIFICATE SHALL BE SUBJECT TO
UNITED STATES FEDERAL  WITHHOLDING  TAX UNLESS THE  CERTIFICATE  REGISTRAR SHALL
HAVE  RECEIVED  A  CERTIFICATE  OF  NON-FOREIGN  STATUS  CERTIFYING  AS  TO  THE
TRANSFEREE'S  STATUS AS A U.S.  PERSON OR CORPORATION OR PARTNERSHIP  UNDER U.S.
LAW.

               THIS CLASS SB-I  CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER,  THE  DEPOSITOR,  THE MASTER  SERVICER,  THE INDENTURE
TRUSTEE,  THE OWNER  TRUSTEE OR ANY OF THEIR  RESPECTIVE  AFFILIATES,  EXCEPT AS
EXPRESSLY PROVIDED IN THE AGREEMENT OR THE OTHER BASIC DOCUMENTS.

                                       2
<PAGE>

Certificate No. 1

Cut-off Date:
September 1, 2002

Date of Trust Agreement:
September 27, 2002

First Payment Date:                         Certificate Percentage Interest of
October 25, 2002                                   this Certificate:  100%

Assumed Final Payment Date:
August 25, 2032

                       HOME EQUITY LOAN-BACKED CERTIFICATE
                                 SERIES 2002-HS3

               evidencing  a  fractional  undivided  interest in the Owner Trust
Estate,  the  property of which  consists  primarily  of the Home Equity  Loans,
created by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.  (hereinafter called
the  "Depositor,"  which term includes any successor  entity under the Agreement
referred to below).

               This Class SB-I  Certificate is payable solely from the assets of
the Owner Trust  Estate,  and does not represent an obligation of or interest in
the Depositor, the Seller, the Master Servicer, the Indenture Trustee, the Owner
Trustee or GMAC Mortgage Group, Inc. or any of their affiliates. This Class SB-I
Certificate  is  not  guaranteed  or  insured  by  any  governmental  agency  or
instrumentality  or by the  Depositor,  the  Seller,  the Master  Servicer,  the
Indenture  Trustee,  the Owner  Trustee or GMAC Mortgage  Group,  Inc. or any of
their affiliates.  None of the Depositor,  the Seller, the Master Servicer,  the
Indenture Trustee, the Owner Trustee,  GMAC Mortgage Group, Inc. or any of their
affiliates  will have any  obligation  with respect to any  certificate or other
obligation secured by or payable from payments on the Certificates.

               This  certifies  that Auer & Co. is the  registered  owner of the
Certificate Percentage Interest evidenced by this Class SB-I Certificate (as set
forth on the face  hereof) in certain  distributions  with  respect to the Owner
Trust  Estate,  consisting  primarily  of the  Home  Equity  Loans,  created  by
Residential  Funding Mortgage  Securities II, Inc. The Trust (as defined herein)
was created  pursuant to a Trust  Agreement dated as specified above (as amended
and supplemented  from time to time, the "Agreement")  between the Depositor and
Wilmington  Trust  Company,  as owner trustee (the "Owner  Trustee,"  which term
includes any successor entity under the Agreement),  a summary of certain of the
pertinent provisions of which is set forth hereafter.  To the extent not defined
herein,  the  capitalized  terms used herein have the  meanings  assigned in the
Agreement.  This Class SB-I  Certificate  is issued  under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class SB-I Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.

                                       3
<PAGE>

               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 "Payment Date"),  commencing on the
first Payment Date specified  above, to the Person in whose name this Class SB-I
Certificate  is  registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month  immediately  preceding  the month of such  distribution  (the
"Record  Date"),  in an amount equal to the pro rata  portion  evidenced by this
Class SB-I Certificate (based on the Certificate  Percentage  Interest stated on
the face hereon) of the Certificate  Distribution Amount, if any, required to be
distributed to Holders of  Certificates on such Payment Date.  Distributions  on
this Class SB-I  Certificate  will be made as provided in the  Agreement  by the
Certificate   Paying   Agent  by  wire   transfer   or  check   mailed   to  the
Certificateholder of record in the Certificate Register without the presentation
or  surrender  of this Class  SB-I  Certificate  or the  making of any  notation
hereon.  Pursuant  to the  Agreement,  the  Trust has  issued  five  Classes  of
Certificates,  designated  as the  Class  SB-I  Certificates,  the  Class  SB-II
Certificates,  the Class R-I  Certificates,  the Class R-II Certificates and the
Class R-III Certificates.

               Except as otherwise provided in the Agreement and notwithstanding
the above,  the final  distribution on this Class SB-I  Certificate will be made
after  due  notice  by the  Certificate  Paying  Agent of the  pendency  of such
distribution  and only  upon  presentation  and  surrender  of this  Class  SB-I
Certificate at the office or agency maintained by the Certificate  Registrar for
that purpose in the City and State of New York. The initial  Security Balance of
this Class SB-I Certificate is set forth above. The Security Balance hereof will
be reduced to the extent of the distributions allocable to principal.

               No  transfer of this Class SB-I  Certificate  will be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended,  and any  applicable  state  securities  laws or is made in
accordance  with said Act and laws.  In the event that such a transfer  is to be
made, (i) the  Certificate  Registrar or the Depositor may require an opinion of
counsel acceptable to and in form and substance  satisfactory to the Certificate
Registrar  and the  Depositor  that  such  transfer  is exempt  (describing  the
applicable  exemption and the basis  therefor) from or is being made pursuant to
the registration  requirements of the Securities Act of 1933, as amended, and of
any  applicable  statute of any state and (ii) the  transferee  shall execute an
investment  letter  in  the  form  described  in the  Agreement  and  (iii)  the
Certificate  Registrar  shall  require the  transferee  to execute an investment
letter and a  Certificate  of  Non-Foreign  Status in the form  described by the
Agreement (or if a Certificate of Non-Foreign Status is not provided, an Opinion
of  Counsel  as  described  in  the  Agreement),  which  investment  letter  and
certificate or Opinion of Counsel shall not be at the expense of the Trust,  the
Owner Trustee,  the  Certificate  Registrar or the Depositor.  The Holder hereof
desiring to effect such transfer shall,  and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Depositor, the Master Servicer and the Certificate
Registrar 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.  In  connection
with any such transfer,  the Certificate Registrar (unless otherwise directed by
the Depositor) will also require either (i) a representation letter, in the form
as described by the  Agreement,  stating that the  transferee is not an employee
benefit or other plan subject to the prohibited transaction  restrictions or the
fiduciary  responsibility  requirements  of ERISA or Section 4975 of the Code (a
"Plan"), any person acting,  directly or indirectly,  on behalf of any such Plan
or any Person using the "plan  assets,"  within the meaning of the Department of

                                       4
<PAGE>

Labor  regulations  at 29  C.F.R.  ss.2510.3-101,  to  effect  such  acquisition
(collectively, a "Plan Investor") or (ii) if such transferee is a Plan Investor,
an opinion of counsel  acceptable to and in form and substance  satisfactory  to
the  Depositor,  the Owner  Trustee,  the Master  Servicer  and the  Certificate
Registrar,  or a certification in the form of Exhibit G to the Agreement, to the
effect that the  purchase or holding of the  Certificate  is  permissible  under
applicable law, will not constitute or result in a prohibited  transaction under
Section 406 of ERISA or Section 4975 of the Code (or  comparable  provisions  of
any  subsequent  enactments)  and will not  subject  the  Depositor,  the  Owner
Trustee,  the Master Servicer or the Certificate  Registrar to any obligation or
liability in addition to those undertaken in the Agreement.

               This Class SB-I  Certificate is one of a duly authorized issue of
Certificates  designated as Home Equity  Loan-Backed  Certificates of the Series
specified hereon (herein collectively called the "Certificates"). All terms used
in this Class SB-I Certificate which are defined in the Agreement shall have the
meanings assigned to them in the Agreement.

               The  Certificateholder,  by its  acceptance  of this  Class  SB-I
Certificate,  agrees  that it will look  solely to the funds on  deposit  in the
Certificate  Distribution  Account that have been  released from the Lien of the
Indenture  for  payment  hereunder  and that  neither  the Owner  Trustee in its
individual   capacity   nor  the   Depositor   is   personally   liable  to  the
Certificateholders  for any amount payable under this Class SB-I  Certificate or
the Agreement or, except as expressly provided in the Agreement,  subject to any
liability under the Agreement.

               The Holder of this Class SB-I Certificate acknowledges and agrees
that  its  rights  to  receive  distributions  in  respect  of this  Class  SB-I
Certificate  are  subordinated  to the rights of the Noteholders as described in
the Indenture.,  dated as of September 27, 2002,  between Home Equity Loan Trust
2002-HS3  (the  "Trust") and  JPMorgan  Chase Bank,  as  Indenture  Trustee (the
"Indenture").

               Each  Certificateholder,  by  its  acceptance  of a  Certificate,
covenants and agrees that such  Certificateholder will not at any time institute
against  the  Depositor  or the Trust,  or join in any  institution  against the
Depositor  or  the  Trust  of,  any  bankruptcy,  reorganization,   arrangement,
insolvency or liquidation  proceedings,  or other  proceedings  under any United
States  federal  or state  bankruptcy  or  similar  law in  connection  with any
obligations relating to the Certificates, the Notes, the Agreement or any of the
Basic Documents.

               The Agreement  permits the amendment  thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit Enhancer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Agreement and will not cause the Trust to be
subject to an entity  level tax. If the purpose of the  amendment  is to correct
any mistake,  eliminate any  inconsistency,  cure any ambiguity or deal with any
matter not  covered,  it shall not be  necessary  to obtain  the  consent of any
Holder,  but the Owner Trustee shall be furnished  with a letter from the Rating
Agencies that the amendment will not result in the  downgrading or withdrawal of
the rating then  assigned to any Security if  determined  without  regard to the
related Policy and the consent of the Credit Enhancer shall be obtained.  If the
purpose of the  amendment is to prevent the  imposition  of any federal or state
taxes at any time that any Security is outstanding, it shall not be necessary to
obtain the consent of any Holder,  but the Owner Trustee shall be furnished with
an Opinion of Counsel that such amendment is necessary or helpful to prevent the

                                       5
<PAGE>

imposition  of such  taxes and is not  materially  adverse to any Holder and the
consent  of the  Credit  Enhancer  shall  be  obtained.  If the  purpose  of the
amendment is to add or eliminate or change any provision of the Agreement, other
than as specified in the preceding two  sentences,  the amendment  shall require
either (a) a letter from the Rating  Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the related Policy or (b) the consent of Holders of
a majority of the Certificate  Percentage  Interests of the Certificates and the
Indenture Trustee; provided, however, that no such amendment shall (i) reduce in
any  manner  the amount  of, or delay the time of,  payments  received  that are
required to be distributed on any Certificate without the consent of the related
Certificateholder  and  the  Credit  Enhancer,  or  (ii)  reduce  the  aforesaid
percentage 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.

               As provided in the Agreement  and subject to certain  limitations
therein set forth,  the transfer of this Class SB-I  Certificate is registerable
in the  Certificate  Register upon surrender of this Class SB-I  Certificate for
registration of transfer at the offices or agencies of the Certificate Registrar
maintained  in  the  City  and  State  of New  York,  accompanied  by a  written
instrument of transfer in form  satisfactory to 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 authorized  denominations
evidencing the same aggregate Certificate  Percentage Interest will be issued to
the designated transferee. The initial Certificate Registrar appointed under the
Agreement is the Indenture Trustee.

               Except  as  provided  in  the  Agreement,  the  Certificates  are
issuable  only in minimum  denominations  of a 10.0000%  Certificate  Percentage
Interest and in integral multiples of a 0.0001% Certificate  Percentage Interest
in  excess  thereof.  As  provided  in the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of   authorized   denominations,   as  requested  by  the  Holder
surrendering  the same. This Class SB-I Certificate is issued in the Certificate
Percentage Interest above; however, the Certificate  Percentage Interest of this
Class  SB-I  Certificate  may  change in  accordance  with  Section  3.12 of the
Agreement.  The Holder of this Class SB-I  Certificate  hereby  consents  to any
change in its Certificate Percentage Interest in accordance with such Section.

               No  service  charge  will be made  for any such  registration  of
transfer or exchange,  but the Owner  Trustee or the  Certificate  Registrar may
require  payment of a sum  sufficient  to cover any tax or  governmental  charge
payable in connection therewith.

               The Owner Trustee,  the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee,  the Certificate  Paying Agent, or
the  Certificate  Registrar  may treat the  Person in whose name this Class SB-I
Certificate is registered as the owner hereof for all purposes,  and none of the
Owner Trustee,  the Certificate  Paying Agent, the Certificate  Registrar or any
such agent shall be affected by any notice to the contrary.

               This Class SB-I Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware.

               The  obligations  created  by the  Agreement  in  respect  of the

                                       6
<PAGE>

Certificates  and the Trust created thereby shall terminate upon the earliest of
(i) the final  distribution  of all moneys or other  property or proceeds of the
Owner  Trust  Estate  in  accordance  with the  terms of the  Indenture  and the
Agreement,  (ii) the Payment Date in August  2032,  or (iii) the purchase by the
Master  Servicer  of all Home  Equity  Loans  pursuant  to  Section  8.08 of the
Servicing Agreement.

               Unless the certificate of  authentication  hereon shall have been
executed by an authorized  officer of the Owner  Trustee,  or an  authenticating
agent by manual signature,  this Class SB-I Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.

                                       7
<PAGE>

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

                                 HOME EQUITY LOAN TRUST 2002-HS3

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

Dated:  September 27, 2002       By:
                                     ---------------------------------------
                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

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

                                   By: ______________________________
                                        Authorized Signatory

                                   or JPMORGAN CHASE BANK,
                                   not in its individual capacity but solely,
                                   as Authenticating Agent of the Trust

Dated: September 27, 2002

                                   By: ______________________________
                                       Authorized Signatory

                                       8
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE___________________________________

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

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

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

Dated:____________________

                                _____________________________________*/
                                   Signature Guaranteed:

                                ____________________________*/

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

*/ NOTICE:  The signature to this assignment must correspond with the name as it
appears upon the face of the within  Certificate  in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed by a member firm of the New York Stock Exchange or a commercial  bank
or trust company.

                                       9
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The  assignee  should  include the  following  for the  information  of the
Certificate Paying Agent:

     Distribution shall be made by wire transfer in immediately  available funds
to  __________________________  for the  account of  __________________________,
account number ______________, or, if mailed by check, to ______________.

     Applicable statements should be mailed to __________________.

                             ------------------------------
                             Signature of assignee or agent
                             (for authorization of wire transfer only)

                                       10
<PAGE>

                         FORM OF CLASS SB-II CERTIFICATE

               THIS CLASS SB-II  CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT
TO THE TERM NOTES AND THE VARIABLE  FUNDING  NOTES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED HEREIN).

               THIS CLASS SB-II CERTIFICATE IS ISSUED IN THE PERCENTAGE INTEREST
SET FORTH BELOW; HOWEVER, THE PERCENTAGE INTEREST OF THIS CERTIFICATE MAY CHANGE
IN ACCORDANCE WITH SECTION 3.12 OF THE AGREEMENT.  THE HOLDER OF THIS CLASS SB-I
CERTIFICATE HEREBY CONSENTS TO ANY CHANGE IN ITS CERTIFICATE PERCENTAGE INTEREST
IN ACCORDANCE WITH SUCH SECTION.

               THIS  CLASS  SB-II  CERTIFICATE  HAS NOT  BEEN  AND  WILL  NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR THE SECURITIES LAWS
OF ANY  STATE  AND MAY NOT BE RESOLD  OR  TRANSFERRED  UNLESS  IT IS  REGISTERED
PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR  TRANSFERRED IN  TRANSACTIONS  WHICH
ARE EXEMPT FROM  REGISTRATION  UNDER SUCH ACT AND UNDER  APPLICABLE  LAWS AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE AMENDED AND
RESTATED TRUST AGREEMENT ("THE AGREEMENT").

               NO TRANSFER OF THIS CLASS SB-II  CERTIFICATE SHALL BE MADE UNLESS
THE CERTIFICATE REGISTRAR SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER
FROM THE  TRANSFEREE  OF THIS CLASS  SB-II  CERTIFICATE  TO THE EFFECT THAT SUCH
TRANSFEREE  IS NOT AN EMPLOYEE  BENEFIT OR OTHER PLAN SUBJECT TO THE  PROHIBITED
TRANSACTION  RESTRICTIONS AND THE FIDUCIARY  RESPONSIBILITY  REQUIREMENTS OF THE
EMPLOYEE  RETIREMENT  INCOME  SECURITY  ACT OF 1974,  AS AMENDED  ("ERISA"),  OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"),  ANY
PERSON ACTING, DIRECTLY OR INDIRECTLY,  ON BEHALF OF ANY SUCH PLAN OR ANY PERSON
USING "PLAN ASSETS,"  WITHIN THE MEANING OF THE DEPARTMENT OF LABOR  REGULATIONS
SECTION  2510.3-101,  TO ACQUIRE  THIS CLASS SB-II  CERTIFICATE  (EACH,  A "PLAN
INVESTOR"),   OR  (II)  IF  THIS  CLASS  SB-II   CERTIFICATE  IS  PRESENTED  FOR
REGISTRATION  IN THE  NAME OF A PLAN  INVESTOR,  AN  OPINION  OF  COUNSEL,  OR A
CERTIFICATION  IN THE FORM OF EXHIBIT G TO THE AGREEMENT IN LIEU OF SUCH OPINION
OF  COUNSEL,  TO THE EFFECT  THAT THE  PURCHASE  OR HOLDING OF THIS CLASS  SB-II
CERTIFICATE IS PERMISSIBLE  UNDER  APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT
IN A PROHIBITED  TRANSACTION  UNDER  SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE  (OR  COMPARABLE  PROVISIONS  OF ANY  SUBSEQUENT  ENACTMENTS)  AND WILL NOT
SUBJECT THE  DEPOSITOR,  THE OWNER  TRUSTEE,  THE  SERVICER  OR THE  CERTIFICATE
REGISTRAR TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE  UNDERTAKEN IN THE
AGREEMENT.

                                       11
<PAGE>

               THE TRANSFEREE OF THIS CLASS SB-II  CERTIFICATE  SHALL BE SUBJECT
TO UNITED STATES FEDERAL WITHHOLDING TAX UNLESS THE CERTIFICATE  REGISTRAR SHALL
HAVE  RECEIVED  A  CERTIFICATE  OF  NON-FOREIGN  STATUS  CERTIFYING  AS  TO  THE
TRANSFEREE'S  STATUS AS A U.S.  PERSON OR CORPORATION OR PARTNERSHIP  UNDER U.S.
LAW.

               THIS CLASS SB-II CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR
OBLIGATION OF THE SELLER,  THE  DEPOSITOR,  THE MASTER  SERVICER,  THE INDENTURE
TRUSTEE,  THE OWNER  TRUSTEE OR ANY OF THEIR  RESPECTIVE  AFFILIATES,  EXCEPT AS
EXPRESSLY PROVIDED IN THE AGREEMENT OR THE OTHER BASIC DOCUMENTS.

                                       12
<PAGE>

Certificate No. 1

Cut-off Date:
September 1, 2002

Date of Trust Agreement:
September 27, 2002

First Payment Date:                         Certificate Percentage Interest of
October 25, 2002                                   this Certificate:  100%

Assumed Final Payment Date:
August 25, 2032

                       HOME EQUITY LOAN-BACKED CERTIFICATE
                                 SERIES 2002-HS3

               evidencing  a  fractional  undivided  interest in the Owner Trust
Estate,  the  property of which  consists  primarily  of the Home Equity  Loans,
created by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.  (hereinafter called
the  "Depositor,"  which term includes any successor  entity under the Agreement
referred to below).

               This Class SB-II Certificate is payable solely from the assets of
the Owner Trust  Estate,  and does not represent an obligation of or interest in
the Depositor, the Seller, the Master Servicer, the Indenture Trustee, the Owner
Trustee or GMAC  Mortgage  Group,  Inc. or any of their  affiliates.  This Class
SB-II  Certificate  is not guaranteed or insured by any  governmental  agency or
instrumentality  or by the  Depositor,  the  Seller,  the Master  Servicer,  the
Indenture  Trustee,  the Owner  Trustee or GMAC Mortgage  Group,  Inc. or any of
their affiliates.  None of the Depositor,  the Seller, the Master Servicer,  the
Indenture Trustee, the Owner Trustee,  GMAC Mortgage Group, Inc. or any of their
affiliates  will have any  obligation  with respect to any  certificate or other
obligation secured by or payable from payments on the Certificates.

               This  certifies  that Auer & Co. is the  registered  owner of the
Certificate  Percentage  Interest  evidenced by this Class SB-II Certificate (as
set forth on the face hereof) in certain distributions with respect to the Owner
Trust  Estate,  consisting  primarily  of the  Home  Equity  Loans,  created  by
Residential  Funding Mortgage  Securities II, Inc. The Trust (as defined herein)
was created  pursuant to a Trust  Agreement dated as specified above (as amended
and supplemented  from time to time, the "Agreement")  between the Depositor and
Wilmington  Trust  Company,  as owner trustee (the "Owner  Trustee,"  which term
includes any successor entity under the Agreement),  a summary of certain of the
pertinent provisions of which is set forth hereafter.  To the extent not defined
herein,  the  capitalized  terms used herein have the  meanings  assigned in the
Agreement.  This Class SB-II  Certificate  is issued under and is subject to the
terms, provisions and conditions of the Agreement, to which Agreement the Holder
of this Class SB-II  Certificate by virtue of the acceptance  hereof assents and
by which such Holder is bound.

                                       13
<PAGE>

               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 "Payment Date"),  commencing on the
first Payment Date specified above, to the Person in whose name this Class SB-II
Certificate  is  registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month  immediately  preceding  the month of such  distribution  (the
"Record  Date"),  in an amount equal to the pro rata  portion  evidenced by this
Class SB-II Certificate (based on the Certificate  Percentage Interest stated on
the face hereon) of the Certificate  Distribution Amount, if any, required to be
distributed to Holders of  Certificates on such Payment Date.  Distributions  on
this Class SB-II  Certificate  will be made as provided in the  Agreement by the
Certificate   Paying   Agent  by  wire   transfer   or  check   mailed   to  the
Certificateholder of record in the Certificate Register without the presentation
or  surrender  of this Class  SB-II  Certificate  or the making of any  notation
hereon.  Pursuant  to the  Agreement,  the  Trust has  issued  five  Classes  of
Certificates,  designated  as the  Class  SB-I  Certificates,  the  Class  SB-II
Certificates,  the Class R-I  Certificates,  the Class R-II Certificates and the
Class R-III Certificates.

               Except as otherwise provided in the Agreement and notwithstanding
the above, the final  distribution on this Class SB-II  Certificate will be made
after  due  notice  by the  Certificate  Paying  Agent of the  pendency  of such
distribution  and only upon  presentation  and  surrender  of this  Class  SB-II
Certificate at the office or agency maintained by the Certificate  Registrar for
that purpose in the City and State of New York. The initial  Security Balance of
this Class SB-II  Certificate  is set forth above.  The Security  Balance hereof
will be reduced to the extent of the distributions allocable to principal.

               No transfer of this Class SB-II  Certificate  will be made unless
such transfer is exempt from the registration requirements of the Securities Act
of 1933, as amended,  and any  applicable  state  securities  laws or is made in
accordance  with said Act and laws.  In the event that such a transfer  is to be
made, (i) the  Certificate  Registrar or the Depositor may require an opinion of
counsel acceptable to and in form and substance  satisfactory to the Certificate
Registrar  and the  Depositor  that  such  transfer  is exempt  (describing  the
applicable  exemption and the basis  therefor) from or is being made pursuant to
the registration  requirements of the Securities Act of 1933, as amended, and of
any  applicable  statute of any state and (ii) the  transferee  shall execute an
investment  letter  in  the  form  described  in the  Agreement  and  (iii)  the
Certificate  Registrar  shall  require the  transferee  to execute an investment
letter and a  Certificate  of  Non-Foreign  Status in the form  described by the
Agreement (or if a Certificate of Non-Foreign Status is not provided, an Opinion
of  Counsel  as  described  in  the  Agreement),  which  investment  letter  and
certificate or Opinion of Counsel shall not be at the expense of the Trust,  the
Owner Trustee,  the  Certificate  Registrar or the Depositor.  The Holder hereof
desiring to effect such transfer shall,  and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Depositor, the Master Servicer and the Certificate
Registrar 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.  In  connection
with any such transfer,  the Certificate Registrar (unless otherwise directed by
the Depositor) will also require either (i) a representation letter, in the form
as described by the  Agreement,  stating that the  transferee is not an employee
benefit or other plan subject to the prohibited transaction  restrictions or the
fiduciary  responsibility  requirements  of ERISA or Section 4975 of the Code (a
"Plan"), any person acting,  directly or indirectly,  on behalf of any such Plan
or any Person using the "plan  assets,"  within the meaning of the Department of
Labor  regulations  at 29  C.F.R.  ss.2510.3-101,  to  effect  such  acquisition

                                       14
<PAGE>

(collectively, a "Plan Investor") or (ii) if such transferee is a Plan Investor,
an opinion of counsel  acceptable to and in form and substance  satisfactory  to
the  Depositor,  the Owner  Trustee,  the Master  Servicer  and the  Certificate
Registrar,  or a certification in the form of Exhibit G to the Agreement, to the
effect that the  purchase or holding of the  Certificate  is  permissible  under
applicable law, will not constitute or result in a prohibited  transaction under
Section 406 of ERISA or Section 4975 of the Code (or  comparable  provisions  of
any  subsequent  enactments)  and will not  subject  the  Depositor,  the  Owner
Trustee,  the Master Servicer or the Certificate  Registrar to any obligation or
liability in addition to those undertaken in the Agreement.

               This Class SB-II Certificate is one of a duly authorized issue of
Certificates  designated as Home Equity  Loan-Backed  Certificates of the Series
specified hereon (herein collectively called the "Certificates"). All terms used
in this Class SB-II  Certificate  which are defined in the Agreement  shall have
the meanings assigned to them in the Agreement.

               The  Certificateholder,  by its  acceptance  of this Class  SB-II
Certificate,  agrees  that it will look  solely to the funds on  deposit  in the
Certificate  Distribution  Account that have been  released from the Lien of the
Indenture  for  payment  hereunder  and that  neither  the Owner  Trustee in its
individual   capacity   nor  the   Depositor   is   personally   liable  to  the
Certificateholders  for any amount payable under this Class SB-II Certificate or
the Agreement or, except as expressly provided in the Agreement,  subject to any
liability under the Agreement.

               The  Holder of this  Class  SB-II  Certificate  acknowledges  and
agrees that its rights to receive  distributions  in respect of this Class SB-II
Certificate  are  subordinated  to the rights of the Noteholders as described in
the Indenture.,  dated as of September 27, 2002,  between Home Equity Loan Trust
2002-HS3  (the  "Trust") and  JPMorgan  Chase Bank,  as  Indenture  Trustee (the
"Indenture").

               Each  Certificateholder,  by  its  acceptance  of a  Certificate,
covenants and agrees that such  Certificateholder will not at any time institute
against  the  Depositor  or the Trust,  or join in any  institution  against the
Depositor  or  the  Trust  of,  any  bankruptcy,  reorganization,   arrangement,
insolvency or liquidation  proceedings,  or other  proceedings  under any United
States  federal  or state  bankruptcy  or  similar  law in  connection  with any
obligations relating to the Certificates, the Notes, the Agreement or any of the
Basic Documents.

               The Agreement  permits the amendment  thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit Enhancer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Agreement and will not cause the Trust to be
subject to an entity  level tax. If the purpose of the  amendment  is to correct
any mistake,  eliminate any  inconsistency,  cure any ambiguity or deal with any
matter not  covered,  it shall not be  necessary  to obtain  the  consent of any
Holder,  but the Owner Trustee shall be furnished  with a letter from the Rating
Agencies that the amendment will not result in the  downgrading or withdrawal of
the rating then  assigned to any Security if  determined  without  regard to the
related Policy and the consent of the Credit Enhancer shall be obtained.  If the
purpose of the  amendment is to prevent the  imposition  of any federal or state
taxes at any time that any Security is outstanding, it shall not be necessary to
obtain the consent of any Holder,  but the Owner Trustee shall be furnished with
an Opinion of Counsel that such amendment is necessary or helpful to prevent the

                                       15
<PAGE>

imposition  of such  taxes and is not  materially  adverse to any Holder and the
consent  of the  Credit  Enhancer  shall  be  obtained.  If the  purpose  of the
amendment is to add or eliminate or change any provision of the Agreement, other
than as specified in the preceding two  sentences,  the amendment  shall require
either (a) a letter from the Rating  Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the related Policy or (b) the consent of Holders of
a majority of the Certificate  Percentage  Interests of the Certificates and the
Indenture Trustee; provided, however, that no such amendment shall (i) reduce in
any  manner  the amount  of, or delay the time of,  payments  received  that are
required to be distributed on any Certificate without the consent of the related
Certificateholder  and  the  Credit  Enhancer,  or  (ii)  reduce  the  aforesaid
percentage 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.

               As provided in the Agreement  and subject to certain  limitations
therein set forth, the transfer of this Class SB-II  Certificate is registerable
in the Certificate  Register upon surrender of this Class SB-II  Certificate for
registration of transfer at the offices or agencies of the Certificate Registrar
maintained  in  the  City  and  State  of New  York,  accompanied  by a  written
instrument of transfer in form  satisfactory to 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 authorized  denominations
evidencing the same aggregate Certificate  Percentage Interest will be issued to
the designated transferee. The initial Certificate Registrar appointed under the
Agreement is the Indenture Trustee.

               Except  as  provided  in  the  Agreement,  the  Certificates  are
issuable  only in minimum  denominations  of a 10.0000%  Certificate  Percentage
Interest and in integral multiples of a 0.0001% Certificate  Percentage Interest
in  excess  thereof.  As  provided  in the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of   authorized   denominations,   as  requested  by  the  Holder
surrendering the same. This Class SB-II Certificate is issued in the Certificate
Percentage Interest above; however, the Certificate  Percentage Interest of this
Class  SB-II  Certificate  may change in  accordance  with  Section  3.12 of the
Agreement.  The Holder of this Class SB-II  Certificate  hereby  consents to any
change in its Certificate Percentage Interest in accordance with such Section.

               No  service  charge  will be made  for any such  registration  of
transfer or exchange,  but the Owner  Trustee or the  Certificate  Registrar may
require  payment of a sum  sufficient  to cover any tax or  governmental  charge
payable in connection therewith.

               The Owner Trustee,  the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee,  the Certificate  Paying Agent, or
the  Certificate  Registrar  may treat the Person in whose name this Class SB-II
Certificate is registered as the owner hereof for all purposes,  and none of the
Owner Trustee,  the Certificate  Paying Agent, the Certificate  Registrar or any
such agent shall be affected by any notice to the contrary.

               This Class SB-II  Certificate  shall be governed by and construed
in accordance with the laws of the State of Delaware.

                                       16
<PAGE>

               The  obligations  created  by the  Agreement  in  respect  of the
Certificates  and the Trust created thereby shall terminate upon the earliest of
(i) the final  distribution  of all moneys or other  property or proceeds of the
Owner  Trust  Estate  in  accordance  with the  terms of the  Indenture  and the
Agreement,  (ii) the Payment Date in August  2032,  or (iii) the purchase by the
Master  Servicer  of all Home  Equity  Loans  pursuant  to  Section  8.08 of the
Servicing Agreement.

               Unless the certificate of  authentication  hereon shall have been
executed by an authorized  officer of the Owner  Trustee,  or an  authenticating
agent by manual signature, this Class SB-II Certificate shall not be entitled to
any benefit under the Agreement or be valid for any purpose.

                                       17
<PAGE>

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

                                 HOME EQUITY LOAN TRUST 2002-HS3

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

Dated:  September 27, 2002       By:
                                     ---------------------------------------
                                     Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

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

                               By: ______________________________
                                    Authorized Signatory

                               or JPMORGAN CHASE BANK,
                               not in its individual capacity but solely,
                               as Authenticating Agent of the Trust

Dated: September 27, 2002

                               By: ______________________________
                                   Authorized Signatory

                                       18
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE___________________________________

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

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

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

Dated:____________________

                                _____________________________________*/
                                   Signature Guaranteed:

                                ____________________________*/

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

*/ NOTICE:  The signature to this assignment must correspond with the name as it
appears upon the face of the within  Certificate  in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed by a member firm of the New York Stock Exchange or a commercial  bank
or trust company.

                                       19
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The  assignee  should  include the  following  for the  information  of the
Certificate Paying Agent:

     Distribution shall be made by wire transfer in immediately  available funds
to  __________________________  for the  account of  __________________________,
account number ______________, or, if mailed by check, to ______________.

     Applicable statements should be mailed to __________________.

                             ------------------------------
                             Signature of assignee or agent
                             (for authorization of wire transfer only)

                                       20
<PAGE>

                                    EXHIBIT B
                             TO THE TRUST AGREEMENT

                              CERTIFICATE OF TRUST

                                       OF

                               HOME EQUITY LOAN TRUST 2002-HS3

        THIS  Certificate  of Trust of Home  Equity  Loan  Trust  2002-HS3  (the
"Trust")  is being  duly  executed  and filed by  Wilmington  Trust  company,  a
Delaware banking corporation,  as owner trustee, to form a statutory trust under
the Delaware Statutory Trust Act (12 Del. C ss.3801 et seq.).

     1. Name: The name of the statutory  trust formed hereby is Home Equity Loan
Trust 2002-HS3.

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

     3. Effective Date: This Certificate of Trust shall be effective upon filing
with the Secretary of State.

               IN WITNESS WHEREOF, the undersigned, being the sole owner trustee
of the Trust, has executed this Certificate of Trust.

                           WILMINGTON TRUST COMPANY,
                           as owner trustee

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

                                       1
<PAGE>

                                    EXHIBIT C

                  [FORM OF RULE 144A INVESTMENT REPRESENTATION]

             Description of Rule 144A Securities, including numbers:
                 ===============================================
                 ===============================================

               The  undersigned  seller,  as registered  holder (the  "Seller"),
intends to transfer the Rule 144A Securities  described above to the undersigned
buyer (the "Buyer").

               1. In connection  with such  transfer and in accordance  with the
agreements  pursuant to which the Rule 144A Securities  were issued,  the Seller
hereby  certifies the following  facts:  Neither the Seller nor anyone acting on
its behalf has offered, transferred,  pledged, sold or otherwise disposed of the
Rule 144A  Securities,  any  interest in the Rule 144A  Securities  or any other
similar security to, or solicited any offer to buy or accept a transfer,  pledge
or other disposition of the Rule 144A Securities,  any interest in the Rule 144A
Securities  or any other  similar  security  from,  or otherwise  approached  or
negotiated  with respect to the Rule 144A  Securities,  any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general  solicitation  by means of general  advertising or in any other
manner,  or taken any other action,  that would constitute a distribution of the
Rule 144A  Securities  under the  Securities  Act of 1933, as amended (the "1933
Act"),  or that  would  render the  disposition  of the Rule 144A  Securities  a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or  another  "qualified  institutional  buyer" as defined in Rule
144A under the 1933 Act.

               2. The Buyer warrants and represents to, and covenants  with, the
Owner Trustee and the  Depositor  (as defined in the Amended and Restated  Trust
Agreement (the "Agreement"),  dated as of September 27, 2002 between Residential
Funding Mortgage Securities II, Inc., as Depositor and Wilmington Trust Company,
as Owner Trustee  pursuant to Section 3.05 of the Agreement,  and JPMorgan Chase
Bank, as indenture trustee, as follows:

               a. The Buyer  understands  that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.

               b.  The  Buyer  considers  itself  a  substantial,  sophisticated
institutional  investor  having such  knowledge and  experience in financial and
business  matters  that it is  capable  of  evaluating  the  merits and risks of
investment in the Rule 144A Securities.

                                       1
<PAGE>

               c. The Buyer has been  furnished with all  information  regarding
the Rule 144A  Securities  that it has requested from the Seller,  the Indenture
Trustee, the Owner Trustee or the Master Servicer.

               d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred,  pledged,  sold or otherwise  disposed of the Rule 144A Securities,
any interest in the Rule 144A  Securities or any other  similar  security to, or
solicited any offer to buy or accept a transfer,  pledge or other disposition of
the Rule 144A Securities,  any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with respect to the
Rule 144A  Securities,  any  interest in the Rule 144A  Securities  or any other
similar  security  with,  any  person  in  any  manner,   or  made  any  general
solicitation  by means of general  advertising or in any other manner,  or taken
any  other  action,  that  would  constitute  a  distribution  of the Rule  144A
Securities  under the 1933 Act or that would render the  disposition of the Rule
144A Securities a violation of Section 5 of the 1933 Act or require registration
pursuant  thereto,  nor will it act, nor has it  authorized or will it authorize
any person to act, in such manner with respect to the Rule 144A Securities.

               e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. The Buyer is
aware that the sale to it is being made in reliance  on Rule 144A.  The Buyer is
acquiring the Rule 144A  Securities for its own account or the accounts of other
qualified  institutional buyers,  understands that such Rule 144A Securities may
be resold, pledged or transferred only (i) to a person reasonably believed to be
a qualified  institutional  buyer that  purchases for its own account or for the
account  of a  qualified  institutional  buyer to whom  notice is given that the
resale,  pledge or  transfer  is being made in  reliance  on Rule 144A,  or (ii)
pursuant to another exemption from registration under the 1933 Act.

               3.  The Buyer represents that:

               (i)    either (a) or (b) is satisfied, as marked below:

     a. The Buyer is not any  employee  benefit  plan  subject  to the  Employee
Retirement  Income Security Act of 1974, as amended  ("ERISA"),  or the Internal
Revenue Code of 1986,  as amended (the  "Code"),  a Person  acting,  directly or
indirectly, on behalf of any such plan or any Person acquiring such Certificates
with "plan  assets"  of a Plan  within the  meaning of the  Department  of Labor
regulation promulgated at 29 C.F.R. ss.2510.3-101; or

     b. The Buyer will provide the Depositor, the Owner Trustee, the Certificate
Registrar  and the Master  Servicer  with  either:  (x) an  opinion of  counsel,
satisfactory to the Depositor,  the Owner Trustee, the Certificate Registrar and
the  Master  Servicer,  to  the  effect  that  the  purchase  and  holding  of a
Certificate by or on behalf of the Buyer is permissible  under  applicable  law,
will not constitute or result in a prohibited  transaction  under Section 406 of
ERISA or Section 4975 of the Code (or  comparable  provisions of any  subsequent
enactments)  and  will  not  subject  the  Depositor,  the  Owner  Trustee,  the
Certificate  Registrar  or the Master  Servicer to any  obligation  or liability
(including  liabilities  under ERISA or Section 4975 of the Code) in addition to

                                       2
<PAGE>

those undertaken in the Trust  Agreement,  which opinion of counsel shall not be
an expense of the Depositor, the Owner Trustee, the Certificate Registrar or the
Master Servicer;  or (y) in lieu of such opinion of counsel,  a certification in
the form of Exhibit G to the Trust Agreement; and

               (ii)  the  Buyer is  familiar  with  the  prohibited  transaction
restrictions and fiduciary  responsibility  requirements of Sections 406 and 407
of ERISA and Section 4975 of the Code and  understands  that each of the parties
to which this  certification is made is relying and will continue to rely on the
statements made in this paragraph 3.

               4. This document may be executed in one or more  counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts,  together, shall
constitute one and the same document.

               Capitalized  terms used  herein  that are not  otherwise  defined
shall have the meanings ascribed thereto in Appendix A to the indenture dated as
of September 27, 2002, between the Trust and the Indenture Trustee.

               IN  WITNESS  WHEREOF,  each  of the  parties  has  executed  this
document as of the date set forth below.

Print Name of Seller                              Print Name of Buyer

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

Taxpayer Identification:                          Taxpayer Identification:

No.                                               No._________________________
    ----------------------------------------

Date:                                             Date:_______________________
      --------------------------------------

                                       3
<PAGE>

                              ANNEX 1 TO EXHIBIT C

                   QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

                   [For Buyers Other Than Registered Investment Companies]

        The undersigned  hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:

               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 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis  $______________________1 in securities (except for the

--------
1 Buyer must own and/or invest on a discretionary basis at least $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

                                       4
<PAGE>

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.

Bank. The Buyer (a) is a national bank or banking  institution  organized  under
the laws of any State,  territory or the  District of Columbia,  the business of
which is  substantially  confined to banking and is  supervised  by the State or
territorial  banking  commission  or similar  official  or is a foreign  bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual  financial  statements,  a copy of which is
attached hereto.

Savings and Loan. The Buyer (a) is a savings and loan association,  building and
loan   association,   cooperative   bank,   homestead   association  or  similar
institution,  which is supervised  and examined by a State or Federal  authority
having  supervision over any such  institutions or is a foreign savings and loan
association  or  equivalent  institution  and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements.

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 or
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  Adviser.  The Buyer is an investment  adviser  registered  under the
Investment Advisers Act of 1940.

SBIC.  The 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.  The Buyer is a business  development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

Trust Fund.  The Buyer is a trust fund whose  trustee is a bank or trust company
and whose participants are exclusively (a) plans 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, or (b) employee
benefit  plans within the meaning of Title I of the Employee  Retirement  Income

                                       5
<PAGE>

Security  Act of 1974,  but is not a trust fund that  includes  as  participants
individual retirement accounts or H.R. 10 plans.

               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) 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.

               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.  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.

               5. The Buyer  acknowledges that it is familiar with Rule 144A and
understands  that the  seller to it and other  parties  related to the Rule 144A
Securities 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.

___ ___ Will the Buyer be purchasing  the Rule 144A Yes No  Securities  only for
Yes No  the Buyer's own account?

               6. If the answer to the  foregoing  question  is "no",  the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party  (including  any  separate  account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified  institutional  buyer" within the meaning of Rule 144A.
In addition,  the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current  representation  letter from
such third party or taken other appropriate  steps  contemplated by Rule 144A to
conclude that such third party  independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

               7. The  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 Rule 144A  Securities will
constitute  a  reaffirmation  of  this  certification  as of the  date  of  such
purchase.

                                       6
<PAGE>

                              Print Name of Buyer

                              By: __________________________________
                                   Name:
                                   Title:

                              Date:
                                     ------------------------------------

                                       7
<PAGE>

                              ANNEX 2 TO EXHIBIT C

                   QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

                    [For Buyers That Are Registered Investment Companies]

               The  undersigned  hereby  certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:

               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  ("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,  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.

____ 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).

               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) bank deposit notes and certificates
of  deposit,  (iii)  loan  participations,   (iv)  repurchase  agreements,   (v)
securities  owned but  subject  to a  repurchase  agreement  and (vi)  currency,
interest rate and commodity swaps.

               5. The Buyer is familiar with Rule 144A and understands that each
of the parties to which this certification is made 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. The undersigned  will notify each of the parties to which this
certification is made of any changes in the information and conclusions  herein.

                                       8
<PAGE>

Until such notice,  the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this  certification by the undersigned as of the date of such
purchase.

                            ----------------------------------------
                               Print Name of Buyer

                            By:_____________________________________
                                Name:
                                Title:

                            IF AN ADVISER:

                            ----------------------------------------
                            Print Name of Buyer

                            Date:
                                   ---------------------------------

                                       9
<PAGE>

                                    EXHIBIT D

                     FORM OF INVESTOR REPRESENTATION LETTER

                              _____________, 20__

Residential Funding Mortgage Securities II, Inc.
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota 55437

JPMorgan Chase Bank
450 West 33rd Street, 14th Floor
New York, New York  10001
Attention:  Institutional Trust Services/Structured Finance Services

               Re:    Home Equity Loan-Backed Certificates
                      Series 2002-HS3

     Ladies  and  Gentlemen:   _________________(the   "Purchaser")  intends  to
purchase from  ___________________  (the "Seller") a ___% Certificate Percentage
Interest  of  Certificates  of  Series  2002-HS3  (the  "Certificates"),  issued
pursuant to the Amended and Restated Trust  Agreement  (the "Trust  Agreement"),
dated as of September 27, 2002, between  Residential Funding Mortgage Securities
II, Inc. as depositor (the  "Depositor") and Wilmington Trust Company,  as owner
trustee (the "Owner  Trustee"),  as  acknowledged  and agreed by JPMorgan  Chase
Bank, as Certificate Registrar.  All terms used herein and not otherwise defined
shall have the meanings set forth in the Trust  Agreement.  The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Depositor and the
Certificate Registrar that:

               1. The Purchaser  understands that (a) the Certificates  have not
been and will not be registered or qualified  under the  Securities Act of 1933,
as amended (the "Act") or any state  securities  law,  (b) the  Depositor is not
required to so register or qualify the Certificates, (c) the Certificates may be
resold only if registered and qualified pursuant to the provisions of the Act or
any  state  securities  law,  or if an  exemption  from  such  registration  and
qualification  is  available,  (d) the  Trust  Agreement  contains  restrictions
regarding the transfer of the Certificates and (e) the Certificates  will bear a
legend to the foregoing effect.

               2.  The  Purchaser  is  acquiring  the  Certificates  for its own
account  for  investment  only and not with a view to or for sale in  connection
with any  distribution  thereof in any manner that would  violate the Act or any
applicable state securities laws.

               3.   The   Purchaser   is   (a)  a   substantial,   sophisticated
        institutional investor having such knowledge and experience in financial

                                       1
<PAGE>

        and business  matters,  and, in particular,  in such matters  related to
        securities  similar  to the  Certificates,  such that it is  capable  of
        evaluating the merits and risks of investment in the  Certificates,  (b)
        able to bear  the  economic  risks  of  such  an  investment  and (c) an
        "accredited  investor"  within the  meaning of Rule  501(a)  promulgated
        pursuant to the Act.

               4.  The  Purchaser  has  been  furnished  with,  and  has  had an
        opportunity to review (a) [a copy of the Private  Placement  Memorandum,
        dated _______,  20__,  relating to the  Certificates  (b)] a copy of the
        Trust  Agreement  and [b] [c]  such  other  information  concerning  the
        Certificates,  the  Home  Equity  Loans  and the  Depositor  as has been
        requested  by the  Purchaser  from the  Depositor  or the  Seller and is
        relevant to the Purchaser's  decision to purchase the Certificates.  The
        Purchaser has had any questions arising from such review answered by the
        Depositor or the Seller to the  satisfaction  of the Purchaser.  [If the
        Purchaser  did  not  purchase  the  Certificates   from  the  Seller  in
        connection  with the initial  distribution of the  Certificates  and was
        provided  with  a  copy  of  the  Private   Placement   Memorandum  (the
        "Memorandum") relating to the original sale (the "Original Sale") of the
        Certificates  by the  Depositor,  the Purchaser  acknowledges  that such
        Memorandum  was provided to it by the Seller,  that the  Memorandum  was
        prepared by the Depositor solely for use in connection with the Original
        Sale and the Depositor did not  participate  in or facilitate in any way
        the purchase of the  Certificates by the Purchaser from the Seller,  and
        the  Purchaser  agrees that it will look solely to the Seller and not to
        the Depositor  with respect to any damage,  liability,  claim or expense
        arising  out of,  resulting  from or in  connection  with  (a)  error or
        omission, or alleged error or omission,  contained in the Memorandum, or
        (b) any information,  development or event arising after the date of the
        Memorandum.]

               5. The  Purchaser  has not and will not nor has it  authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any  Certificate,  any interest in any Certificate or any other similar
security to any person in any manner,  (b) solicit any offer to buy or to accept
a pledge, disposition of other transfer of any Certificate,  any interest in any
Certificate  or any other similar  security  from any person in any manner,  (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general  solicitation  by means of general  advertising or in any other
manner or (e) take any other  action,  that (as to any of (a) through (e) above)
would  constitute a distribution  of any  Certificate  under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the Act or
any state  securities law, or that would require  registration or  qualification
pursuant thereto.  The Purchaser will not sell or otherwise  transfer any of the
Certificates, except in compliance with the provisions of the Trust Agreement.

               6.  The Purchaser represents:

                  (i) that either (a) or (b) is satisfied, as marked below:

     ____ a. The  Purchaser  is not any  employee  benefit  plan  subject to the
Employee  Retirement Income Security Act of 1974, as amended  ("ERISA"),  or the
Internal  Revenue  Code of 1986,  as  amended  (the  "Code"),  a Person  acting,
directly or indirectly,  on behalf of any such plan or any Person acquiring such

                                       2
<PAGE>

Certificates  with "plan assets" of a Plan within the meaning of the  Department
of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101; or

     ____ b. The Purchaser  will provide the Depositor,  the Owner Trustee,  the
Certificate  Registrar and the Master  Servicer  with either:  (x) an opinion of
counsel,  satisfactory  to the  Depositor,  the Owner Trustee,  the  Certificate
Registrar and the Master  Servicer,  to the effect that the purchase and holding
of a  Certificate  by or  on  behalf  of  the  Purchaser  is  permissible  under
applicable law, will not constitute or result in a prohibited  transaction under
Section 406 of ERISA or Section 4975 of the Code (or  comparable  provisions  of
any  subsequent  enactments)  and will not  subject  the  Depositor,  the  Owner
Trustee,  the Certificate  Registrar or the Master Servicer to any obligation or
liability  (including  liabilities  under ERISA or Section  4975 of the Code) in
addition to those  undertaken in the Trust  Agreement,  which opinion of counsel
shall not be an expense of the  Depositor,  the Owner Trustee,  the  Certificate
Registrar or the Master Servicer;  or (y) in lieu of such opinion of counsel,  a
certification in the form of Exhibit G to the Trust Agreement; and

               (ii) the  Purchaser is familiar with the  prohibited  transaction
restrictions and fiduciary  responsibility  requirements of Sections 406 and 407
of ERISA and Section 4975 of the Code and  understands  that each of the parties
to which this  certification is made is relying and will continue to rely on the
statements made in this paragraph 6.

     7. The Purchaser is acquiring the Certificate for its own behalf and is not
acting as agent or custodian for any other person or entity in  connection  with
such acquisition;

               8.  The  Purchaser  is  not a  partnership,  grantor  trust  or S
corporation  for  federal  income  tax  purposes,  or,  if  the  Purchaser  is a
partnership, grantor trust or S corporation for federal income tax purposes, the
Certificates  are not more than 50% of the  assets of the  partnership,  grantor
trust or S corporation.

               9.  The Purchaser is not a non-United States person.

                                            Very truly yours,

                                            By:  _______________________________
                                                 Name:
                                                 Title:

                                       3
<PAGE>

                                    EXHIBIT E

                    FORM OF TRANSFEROR REPRESENTATION LETTER

                        ________________, 20

Residential Funding Mortgage Securities II, Inc.
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota 55437

JPMorgan Chase Bank
450 West 33rd Street, 14th Floor
New York, New York  10001
Attention:  Institutional Trust Services/Structured Finance Services

               Re:    Home Equity  Loan-Backed Certificates
                      Series 2002-HS3

Ladies and Gentlemen:

     ________________  (the "Purchaser") intends to purchase from ______________
(the  "Seller") a ___%  Certificate  Percentage  Interest of  [Certificates]  of
Series  2002-HS3  (the  "Certificates"),  issued  pursuant  to the  Amended  and
Restated  Trust  Agreement  (the "Trust  Agreement"),  dated as of September 27,
2002, between Residential Funding Mortgage Securities II, Inc. as depositor (the
"Depositor")  and  Wilmington  Trust  Company,  as  owner  trustee  (the  "Owner
Trustee"),  as  acknowledged  and agreed by JPMorgan  Chase Bank, as Certificate
Registrar.  All terms  used  herein  and not  otherwise  defined  shall have the
meanings  set  forth  in the  Trust  Agreement.  The  Seller  hereby  certifies,
represents  and  warrants  to,  and  covenants   with,  the  Depositor  and  the
Certificate Registrar that:

        Neither  the  Seller nor  anyone  acting on its behalf has (a)  offered,
pledged,  sold,  disposed  of or  otherwise  transferred  any  Certificate,  any
interest in any  Certificate or any other similar  security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate,  any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise  approached or
negotiated with respect to any  Certificate,  any interest in any Certificate or
any other  similar  security  with any  person in any  manner,  (d) has made any
general  solicitation by means of general advertising or in any other manner, or
(e) has taken any other action,  that (as to any of (a) through (e) above) would
constitute a distribution of the  Certificates  under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section  5 of the  Act or any  state  securities  law,  or  that  would  require
registration or qualification  pursuant thereto. The Seller will not act, in any

                                       1
<PAGE>

manner set forth in the foregoing sentence with respect to any Certificate.  The
Seller has not and will not sell or otherwise  transfer any of the Certificates,
except in compliance with the provisions of the Trust Agreement.

                                            Very truly yours,

                                            By:_____________________________
                                                Name:
                                                Title

                                       2
<PAGE>

                                    EXHIBIT F

                        CERTIFICATE OF NON-FOREIGN STATUS

        This  Certificate of  Non-Foreign  Status  ("certificate")  is delivered
pursuant to Section 3.05 of the Amended and Restated Trust  Agreement,  dated as
of  September  27, 2002 (the "Trust  Agreement"),  between  Residential  Funding
Mortgage  Securities  II, Inc., as depositor and Wilmington  Trust  Company,  as
Owner Trustee,  in connection with the acquisition of, transfer to or possession
by the undersigned,  whether as beneficial owner (the  "Beneficial  Owner"),  or
nominee  on  behalf  of the  Beneficial  Owner  of the Home  Equity  Loan-Backed
Certificates,  Series 2002-HS3 (the "Certificates").  Capitalized terms used but
not defined in this certificate  have the respective  meanings given them in the
Trust Agreement.

        Each holder must  complete Part I, Part II (if the holder is a nominee),
and in all cases sign and otherwise complete Part III.

        In addition,  each holder shall submit with the Certificates an IRS Form
W-9 relating to such holder.

        To confirm to the Trust that the provisions of Sections 871, 881 or 1446
of the Internal  Revenue Code (relating to withholding tax on foreign  partners)
do not  apply  in  respect  of the  Certificate  held  by the  undersigned,  the
undersigned hereby certifies:

Part I - Complete Either A or B

        A.     Individual as Beneficial Owner

               1. I am (The Beneficial  Owner is ) not a non-resident  alien for
          purposes of U.S. income taxation;

               2.     My (The Beneficial Owner's) name and home address are:
                 _____________________________________________________; and

               3.   My (The  Beneficial  Owner's) U.S.  taxpayer  identification
                    number (Social Security Number) is _________________.

        B.     Corporate, Partnership or Other Entity as Beneficial - Owner

               1.  ___________________(Name  of the  Beneficial  Owner) is not a
          foreign  corporation,  foreign  partnership,  foreign trust or foreign
          estate  (as  those  terms  are  defined  in  the  Code  and   Treasury
          Regulations;

               2.  The   Beneficial   Owner's   office   address  and  place  of
          incorporation (if applicable) is ________________________; and

                                       1
<PAGE>

               3. The Beneficial Owner's U.S. employer  identification number is
          ____________________.

Part II - Nominees

        If  the  undersigned  is the  nominee  for  the  Beneficial  Owner,  the
undersigned  certifies  that this  certificate  has been made in  reliance  upon
information contained in:

                       an IRS Form W-9
        --------------

                       a form such as this or substantially similar
        --------------

provided to the  undersigned  by an appropriate  person and (i) the  undersigned
agrees to notify the Trust at least  thirty (30) days prior to the date that the
form  relied  upon  becomes  obsolete,  and (ii) in  connection  with  change in
Beneficial  Owners,  the  undersigned  agrees  to  submit a new  Certificate  of
Non-Foreign Status to the Trust promptly after such change.

Part III -     Declaration

        The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust  within sixty (60) days of the date that the  Beneficial  Owner
becomes a foreign person. The undersigned  understands that this certificate may
be  disclosed  to the  Internal  Revenue  Service  by the  Trust  and any  false
statement contained therein could be punishable by fines, imprisonment or both.

        Under  penalties  of  perjury,  I  declare  that  I have  examined  this
certificate  and to the best of my knowledge and belief it is true,  correct and
complete and will further  declare that I will inform the Trust of any change in
the  information  provided above,  and, if applicable,  I further declare that I
have the authority* to sign this document.

Name:______________________________

Title (if applicable):____________________

Signature and Date:_____________________

*NOTE:  If signed  pursuant to a power of attorney,  the power of attorney  must
accompany this certificate.

                                       2
<PAGE>

                                    EXHIBIT G

                       FORM OF ERISA REPRESENTATION LETTER

                                                   _____________, 200__

Residential Funding Mortgage
 Securities II, Inc.
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota  55437

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890

Residential Funding Corporation
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota  55437

[CERTIFICATE REGISTRAR]

               Re:    Residential Funding Mortgage Securities II, Inc.
                      Home Equity Loan-Backed Certificates, Series 2002-HS3

Dear Sirs:

        __________________________________ (the "Transferee") intends to acquire
from  _____________________  (the  "Transferor") a ___%  Certificate  Percentage
Interest  of  Residential  Funding  Mortgage  Securities  II,  Inc.  Home Equity
Loan-Backed Certificates, Series 2002-HS3 (the "Certificates"),  issued pursuant
to an Amended  and  Restated  Trust  Agreement  (the  "Trust  Agreement")  dated
September 27, 2002 among  Residential  Funding Mortgage  Securities II, Inc., as
depositor (the "Depositor") and Wilmington Trust Company, as trustee (the "Owner
Trustee").  Capitalized  terms used herein and not otherwise  defined shall have
the meanings assigned thereto in the Trust Agreement.

        The  Transferee  hereby  certifies,  represents  and  warrants  to,  and
covenants with, the Depositor,  the Owner Trustee, the Certificate Registrar and
the Master Servicer that either:

        (1) The  Certificates  (i) are not being  acquired  by,  and will not be
transferred to, any employee  benefit plan within the meaning of Section 3(3) of
the Employee  Retirement Income Security Act of 1974, as amended  ("ERISA"),  or
other  retirement  arrangement,  including  individual  retirement  accounts and
annuities,  Keogh  plans and bank  collective  investment  funds  and  insurance
company  general  or  separate  accounts  in  which  such  plans,   accounts  or

                                       1
<PAGE>

arrangements  are  invested,  that is subject to Section 406 of ERISA or Section
4975 of the Internal  Revenue Code of 1986,  as amended (the "Code") (any of the
foregoing,  a "Plan"),  (ii) are not being acquired with "plan assets" of a Plan
within the  meaning  of the  Department  of Labor  ("DOL")  Regulations  Section
2510.3-101, and (iii) will not be transferred to any entity that is deemed to be
investing  in plan  assets  within the  meaning of the DOL  Regulations  Section
2510.3-101; or

        (2) The purchase of the  Certificates  is permissible  under  applicable
law, will not constitute or result in any prohibited  transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor or the Owner Trustee to
any obligation in addition to those  undertaken in the Trust Agreement and, with
respect to each  source of funds  being used by the  Transferee  to acquire  the
Certificates  (each  being  referred to as a  "Source"),  the  Transferee  is an
insurance  company and (i) the Source is assets of its "general  account,"  (ii)
the conditions set forth in PTCE 95-60 issued by the DOL have been satisfied and
the purchase and holding of  Certificates  by or on behalf of the Transferee are
exempt under PTCE 95-60, (iii) less than 25% of the Transferee's general account
constitute  "plan assets" of "benefit plan investors"  within the meaning of DOL
Regulations  Section  2510.3-101(f)(2),  and (iv) the  amount  of  reserves  and
liabilities for such general account  contracts held by or on behalf of any Plan
do not exceed 10% of the total reserves and  liabilities of such general account
plus  surplus as of the date hereof  (for  purposes  of this  clause,  all Plans
maintained by the same employer (or affiliate thereof) or employee  organization
are deemed to be a single Plan) in  connection  with its purchase and holding of
such Certificates.

        (3)  The  Transferee  is  familiar  with  the   prohibited   transaction
restrictions and fiduciary  responsibility  requirements of Sections 406 and 407
of ERISA and Section 4975 of the Code and  understands  that each of the parties
to which this  certification is made is relying and will continue to rely on the
statements made herein.

                                            Very truly yours,

                                            By:  ______________________________
                                                  Name:
                                                  Title

                                       2
<PAGE>

                                    EXHIBIT H

                          FORM OF REPRESENTATION LETTER

                                                   _____________, 200__

Residential Funding Mortgage
 Securities II, Inc.
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota  55437

Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware  19890

Residential Funding Corporation
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, Minnesota  55437

[CERTIFICATE REGISTRAR]

                    Re:  Residential  Funding Mortgage  Securities II, Inc. Home
                         Equity Loan-Backed Certificates, Series 2002-HS3

Dear Sirs:

        __________________________________ (the "Transferee") intends to acquire
from  _____________________  (the  "Transferor") a ___%  Certificate  Percentage
Interest of Residential  Mortgage  Securities  II, Inc. Home Equity  Loan-Backed
Certificates, Series 2002-HS3 (the "Certificates"), issued pursuant to a Amended
and Restated Trust  Agreement (the "Trust  Agreement")  dated September 27, 2002
among  Residential  Funding  Mortgage  Securities  II, Inc.,  as depositor  (the
"Depositor")  and Wilmington  Trust Company,  as trustee (the "Owner  Trustee").
Capitalized  terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Trust Agreement.

        The  Transferee  hereby  certifies,  represents  and  warrants  to,  and
covenants with, the Depositor,  the Owner Trustee, the Certificate Registrar and
the Master Servicer that:

        (1) the Transferee is acquiring the  Certificate  for its own behalf and
is not acting as agent or custodian for any other person or entity in connection
with such acquisition; and

                                       1
<PAGE>

        (2) the Transferee is not a partnership,  grantor trust or S corporation
for federal income tax purposes, or, if the Transferee is a partnership, grantor
trust or S corporation for federal income tax purposes, the Certificates are not
more than 50% of the assets of the partnership, grantor trust or S corporation.

                                            Very truly yours,

                                            By:_________________________________
                                                Name:
                                                Title:

                                       2
<PAGE>

                                    EXHIBIT I

                         FORM OF CLASS R-I CERTIFICATES

THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

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 (THE "CODE").

NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION  PURSUANT TO SECTION 3.05 OF THE AGREEMENT OR AN
OPINION OF COUNSEL  SATISFACTORY  TO THE  SERVICER,  THE COMPANY AND THE TRUSTEE
THAT THE  PURCHASE  OF THIS  CERTIFICATE  WILL NOT  CONSTITUTE  OR  RESULT  IN A
NON-EXEMPT  PROHIBITED  TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED  ("ERISA"),  OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE SERVICER,  THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION
OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

ANY RESALE,  TRANSFER OR OTHER  DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE SERVICER AND THE
TRUSTEE  THAT (1) SUCH  TRANSFEREE  IS NOT (A) THE UNITED  STATES,  ANY STATE OR
POLITICAL  SUBDIVISION  THEREOF,  ANY  POSSESSION OF THE UNITED  STATES,  OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION  IF ALL OF ITS  ACTIVITIES  ARE SUBJECT TO TAX AND EXCEPT
FOR THE FHLMC,  A MAJORITY  OF ITS BOARD OF  DIRECTORS  IS NOT  SELECTED BY SUCH
GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY  OF EITHER OF THE FOREGOING,  (C) ANY ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES  DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS  EXEMPT  FROM THE TAX  IMPOSED  BY  CHAPTER 1 OF THE CODE  UNLESS  SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX  IMPOSED  BY  SECTION  511 OF THE  CODE ON  UNRELATED  BUSINESS  TAXABLE
INCOME),  (D) RURAL  ELECTRIC AND  TELEPHONE  COOPERATIVES  DESCRIBED IN SECTION
1381(a)(2)(C)  OF THE CODE,  (E) AN ELECTING  LARGE  PARTNERSHIP  UNDER  SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED  ORGANIZATION"),  OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION,  (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE  SATISFIES
CERTAIN  ADDITIONAL  CONDITIONS  RELATING  TO  THE  FINANCIAL  CONDITION  OF THE

                                       1
<PAGE>

PROPOSED  TRANSFEREE.   NOTWITHSTANDING  THE  REGISTRATION  IN  THE  CERTIFICATE
REGISTER OR ANY TRANSFER,  SALE OR OTHER  DISPOSITION  OF THIS  CERTIFICATE TO A
DISQUALIFIED  ORGANIZATION  OR AN AGENT  OF A  DISQUALIFIED  ORGANIZATION,  SUCH
REGISTRATION  SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT  WHATSOEVER  AND
SUCH  PERSON  SHALL  NOT BE  DEEMED TO BE A  CERTIFICATEHOLDER  FOR ANY  PURPOSE
HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

                                       2
<PAGE>

Certificate No. 1

Cut-off Date:
September 1, 2002

Date of Trust Agreement:
September 27, 2002

First Payment Date:                         Certificate Percentage Interest of
October 25, 2002                                   this Certificate:  100%

Assumed Final Payment Date:
August 25, 2032

                       HOME EQUITY LOAN-BACKED CERTIFICATE
                                 SERIES 2002-HS3

               evidencing  a  fractional  undivided  interest in the Owner Trust
Estate,  the  property of which  consists  primarily  of the Home Equity  Loans,
created by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.  (hereinafter called
the  "Depositor,"  which term includes any successor  entity under the Agreement
referred to below).

               This  Certificate  is payable solely from the assets of the Owner
Trust  Estate,  and does not  represent  an  obligation  of or  interest  in the
Depositor,  the Seller, the Master Servicer,  the Indenture  Trustee,  the Owner
Trustee  or  GMAC  Mortgage  Group,  Inc.  or  any  of  their  affiliates.  This
Certificate  is  not  guaranteed  or  insured  by  any  governmental  agency  or
instrumentality  or by the  Depositor,  the  Seller,  the Master  Servicer,  the
Indenture  Trustee,  the Owner  Trustee or GMAC Mortgage  Group,  Inc. or any of
their affiliates.  None of the Depositor,  the Seller, the Master Servicer,  the
Indenture Trustee, the Owner Trustee,  GMAC Mortgage Group, Inc. or any of their
affiliates  will have any  obligation  with respect to any  certificate or other
obligation secured by or payable from payments on the Certificates.

               This  certifies  that  Residential  Funding  Corporation  is  the
registered  owner  of the  Certificate  Percentage  Interest  evidenced  by this
Certificate  (as set forth on the face  hereof)  in certain  distributions  with
respect to the Owner  Trust  Estate,  consisting  primarily  of the Home  Equity
Loans, created by Residential Funding Mortgage Securities II, Inc. The Trust (as
defined  herein) was created  pursuant to a Trust  Agreement  dated as specified
above (as amended and supplemented  from time to time, the "Agreement")  between
the  Depositor  and  Wilmington  Trust  Company,  as owner  trustee  (the "Owner
Trustee,"  which term  includes any  successor  entity under the  Agreement),  a
summary of certain of the pertinent  provisions of which is set forth hereafter.
To the extent not defined  herein,  the  capitalized  terms used herein have the
meanings  assigned in the  Agreement.  This  Certificate  is issued under and is
subject to the terms,  provisions  and  conditions  of the  Agreement,  to which
Agreement  the Holder of this  Certificate  by virtue of the  acceptance  hereof
assents and by which such Holder is bound.

                                       3
<PAGE>

               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 "Payment Date"),  commencing on the
first Payment Date specified above, to the Person in whose name this Certificate
is  registered  at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately  preceding the month of such distribution (the "Record Date"),
in an amount equal to the pro rata portion evidenced by this Certificate  (based
on the  Certificate  Percentage  Interest  stated  on the  face  hereon)  of the
Certificate  Distribution  Amount, if any, required to be distributed to Holders
of Certificates on such Payment Date.  Distributions on this Certificate will be
made as  provided  in the  Agreement  by the  Certificate  Paying  Agent by wire
transfer or check mailed to the  Certificateholder  of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon.

               Except as otherwise provided in the Agreement and notwithstanding
the above,  the final  distribution on this  Certificate  will be made after due
notice by the Certificate  Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the  Certificate  Registrar for that purpose in the City and State
of New York.

               Each Certificateholder of this Certificate will be deemed to have
agreed to be bound by the  restrictions set forth in the Agreement to the effect
that (i) each  person  holding  or  acquiring  any  Ownership  Interest  in this
Certificate must be a United States Person and a Permitted Transferee,  (ii) the
transfer of any Ownership  Interest in this Certificate will be conditioned upon
the delivery to the Indenture  Trustee of, among other  things,  an affidavit to
the effect that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported  transferee,  and (iv) if any person other than a United
States Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions,  then the Depositor will have the
right,  in its sole  discretion and without notice to the  Certificateholder  of
this  Certificate,  to sell this  Certificate  to a  purchaser  selected  by the
Depositor,  which  purchaser  may be the  Depositor,  or  any  affiliate  of the
Depositor, on such terms and conditions as the Depositor may choose.

               No transfer of this Class R-I Certificate will be made unless the
Certificate  Registrar (unless otherwise directed by the Depositor) has received
(i) a representation letter, in the form as described by the Agreement,  stating
that the  transferee  is not an  employee  benefit or other plan  subject to the
prohibited transaction restrictions or fiduciary responsibility  requirements of
ERISA or Section  4975 of the Code  ("Plan"),  any person  acting,  directly  or
indirectly,  on behalf of any such plan or any person  using the "plan  assets,"
within  the  meaning  of  the  Department  of  Labor  regulations  at 29  C.F.R.
ss.2510.3-101,  to effect such acquisition (collectively,  a "Plan Investor") or
(ii) if such transferee is a Plan Investor,  an opinion of counsel acceptable to
and in form and substance satisfactory to the Depositor,  the Owner Trustee, the
Master Servicer and the Certificate Registrar, or a certification in the form of
Exhibit G to the  Agreement,  to the effect  that the  purchase  or holding of a
Class R Certificate is permissible  under applicable law, will not constitute or
result in a  non-exempt  prohibited  transaction  under  Section 406 of ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent enactments)
and will not subject the Depositor,  the Owner Trustee,  the Master  Servicer or
the  Certificate  Registrar to any  obligation or liability in addition to those
undertaken in the Agreement.

                                       4
<PAGE>

               This   Certificate  is  one  of  a  duly   authorized   issue  of
Certificates  designated as Home Equity  Loan-Backed  Certificates of the Series
specified hereon (herein collectively called the "Certificates"). All terms used
in this  Certificate  which are defined in the Agreement shall have the meanings
assigned to them in the Agreement.

               The  Certificateholder,  by its  acceptance of this  Certificate,
agrees  that it will  look  solely to the funds on  deposit  in the  Certificate
Distribution  Account that have been released from the Lien of the Indenture for
payment hereunder and that neither the Owner Trustee in its individual  capacity
nor the Depositor is personally 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.

               The Holder of this  Certificate  acknowledges and agrees that its
rights to receive  distributions in respect of this Certificate are subordinated
to the rights of the  Noteholders  as  described in the  Indenture,  dated as of
September  27, 2002,  between Home Equity Loan Trust  2000-HS3 (the "Trust") and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture").

               Each  Certificateholder,  by  its  acceptance  of a  Certificate,
covenants and agrees that such  Certificateholder will not at any time institute
against  the  Depositor  or the Trust,  or join in any  institution  against the
Depositor  or  the  Trust  of,  any  bankruptcy,  reorganization,   arrangement,
insolvency or liquidation  proceedings,  or other  proceedings  under any United
States  federal  or state  bankruptcy  or  similar  law in  connection  with any
obligations relating to the Certificates, the Notes, the Agreement or any of the
Basic Documents.

               The Agreement  permits the amendment  thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit Enhancer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Agreement and will not cause the Trust to be
subject to an entity  level tax. If the purpose of the  amendment  is to correct
any mistake,  eliminate any  inconsistency,  cure any ambiguity or deal with any
matter not  covered,  it shall not be  necessary  to obtain  the  consent of any
Holder,  but the Owner Trustee shall be furnished  with a letter from the Rating
Agencies that the amendment will not result in the  downgrading or withdrawal of
the rating then  assigned to any Security if  determined  without  regard to the
related Policy and the consent of the Credit Enhancer shall be obtained.  If the
purpose of the  amendment is to prevent the  imposition  of any federal or state
taxes at any time that any Security is outstanding, it shall not be necessary to
obtain the consent of any Holder,  but the Owner Trustee shall be furnished with
an Opinion of Counsel that such amendment is necessary or helpful to prevent the
imposition  of such  taxes and is not  materially  adverse to any Holder and the
consent  of the  Credit  Enhancer  shall  be  obtained.  If the  purpose  of the
amendment is to add or eliminate or change any provision of the Agreement, other
than as specified in the preceding two  sentences,  the amendment  shall require
either (a) a letter from the Rating  Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the related Policy or (b) the consent of Holders of
a majority of the Certificate  Percentage  Interests of the Certificates and the
Indenture Trustee; provided, however, that no such amendment shall (i) reduce in

                                       5
<PAGE>

any  manner  the amount  of, or delay the time of,  payments  received  that are
required to be distributed on any Certificate without the consent of the related
Certificateholder  and  the  Credit  Enhancer,  or  (ii)  reduce  the  aforesaid
percentage 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.

               As provided in the Agreement  and subject to certain  limitations
therein set forth,  the  transfer of this  Certificate  is  registerable  in the
Certificate  Register upon surrender of this  Certificate  for  registration  of
transfer at the offices or agencies of the Certificate  Registrar  maintained in
the City and State of New York,  accompanied by a written instrument of transfer
in form  satisfactory to 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  authorized  denominations  evidencing  the  same
aggregate  Certificate  Percentage  Interest  will be issued  to the  designated
transferee.  The initial Certificate  Registrar appointed under the Agreement is
the Indenture Trustee.

               Except  as  provided  in  the  Agreement,  the  Certificates  are
issuable  only in minimum  denominations  of a 10.0000%  Certificate  Percentage
Interest and in integral multiples of a 0.0001% Certificate  Percentage Interest
in  excess  thereof.  As  provided  in the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of   authorized   denominations,   as  requested  by  the  Holder
surrendering the same. This Certificate is issued in the Certificate  Percentage
Interest above; however, the Certificate Percentage Interest of this Certificate
may change in accordance with Section 3.12 of the Agreement.  The Holder of this
Certificate hereby consents to any change in its Certificate Percentage Interest
in accordance with such Section.

               No  service  charge  will be made  for any such  registration  of
transfer or exchange,  but the Owner  Trustee or the  Certificate  Registrar may
require  payment of a sum  sufficient  to cover any tax or  governmental  charge
payable in connection therewith.

               The Owner Trustee,  the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee,  the Certificate  Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes,  and none of the Owner Trustee,
the Certificate Paying Agent, the Certificate  Registrar or any such agent shall
be affected by any notice to the contrary.

               This Certificate shall be governed by and construed in accordance
with the laws of the State of Delaware.

               The  obligations  created  by the  Agreement  in  respect  of the
Certificates  and the Trust created thereby shall terminate upon the earliest of
(i) the final  distribution  of all moneys or other  property or proceeds of the
Owner  Trust  Estate  in  accordance  with the  terms of the  Indenture  and the
Agreement,  (ii) the Payment Date in August  2032,  or (iii) the purchase by the
Master  Servicer of all Revolving  Credit Loans  pursuant to Section 8.08 of the
Servicing Agreement.

               Unless the certificate of  authentication  hereon shall have been
executed by an authorized  officer of the Owner  Trustee,  or an  authenticating
agent by manual signature, this Certificate shall not be entitled to any benefit
under the Agreement or be valid for any purpose.

                                       6
<PAGE>

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

                              HOME EQUITY LOAN TRUST 2000-HS3

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

Dated:  September 27, 2002    By:
                                  ---------------------------------------
                                  Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

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

                            By: ______________________________
                                 Authorized Signatory

                            or JPMORGAN CHASE BANK,
                            not in its individual capacity but solely,
                            as Authenticating Agent of the Trust

Dated: September 27, 2002

                            By: ______________________________
                                Authorized Signatory

                                       7
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE___________________________________

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

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

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

Dated:____________________

                                _____________________________________*/
                                   Signature Guaranteed:

                                ____________________________*/

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

*/ NOTICE:  The signature to this assignment must correspond with the name as it
appears upon the face of the within  Certificate  in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed by a member firm of the New York Stock Exchange or a commercial  bank
or trust company.

                                       8
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The  assignee  should  include the  following  for the  information  of the
Certificate Paying Agent:

     Distribution shall be made by wire transfer in immediately  available funds
to  __________________________  for the  account of  __________________________,
account number ______________, or, if mailed by check, to ______________.

     Applicable statements should be mailed to __________________.

                             ------------------------------
                             Signature of assignee or agent
                             (for authorization of wire transfer only)

                                       9
<PAGE>

                         FORM OF CLASS R-II CERTIFICATES

THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

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 (THE "CODE").

NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION  PURSUANT TO SECTION 3.05 OF THE AGREEMENT OR AN
OPINION OF COUNSEL  SATISFACTORY  TO THE  SERVICER,  THE COMPANY AND THE TRUSTEE
THAT THE  PURCHASE  OF THIS  CERTIFICATE  WILL NOT  CONSTITUTE  OR  RESULT  IN A
NON-EXEMPT  PROHIBITED  TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED  ("ERISA"),  OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE SERVICER,  THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION
OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

ANY RESALE,  TRANSFER OR OTHER  DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE SERVICER AND THE
TRUSTEE  THAT (1) SUCH  TRANSFEREE  IS NOT (A) THE UNITED  STATES,  ANY STATE OR
POLITICAL  SUBDIVISION  THEREOF,  ANY  POSSESSION OF THE UNITED  STATES,  OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION  IF ALL OF ITS  ACTIVITIES  ARE SUBJECT TO TAX AND EXCEPT
FOR THE FHLMC,  A MAJORITY  OF ITS BOARD OF  DIRECTORS  IS NOT  SELECTED BY SUCH
GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY  OF EITHER OF THE FOREGOING,  (C) ANY ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES  DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS  EXEMPT  FROM THE TAX  IMPOSED  BY  CHAPTER 1 OF THE CODE  UNLESS  SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX  IMPOSED  BY  SECTION  511 OF THE  CODE ON  UNRELATED  BUSINESS  TAXABLE
INCOME),  (D) RURAL  ELECTRIC AND  TELEPHONE  COOPERATIVES  DESCRIBED IN SECTION
1381(a)(2)(C)  OF THE CODE,  (E) AN ELECTING  LARGE  PARTNERSHIP  UNDER  SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED  ORGANIZATION"),  OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION,  (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE  SATISFIES
CERTAIN  ADDITIONAL  CONDITIONS  RELATING  TO  THE  FINANCIAL  CONDITION  OF THE
PROPOSED  TRANSFEREE.   NOTWITHSTANDING  THE  REGISTRATION  IN  THE  CERTIFICATE
REGISTER OR ANY TRANSFER,  SALE OR OTHER  DISPOSITION  OF THIS  CERTIFICATE TO A
DISQUALIFIED  ORGANIZATION  OR AN AGENT  OF A  DISQUALIFIED  ORGANIZATION,  SUCH
REGISTRATION  SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT  WHATSOEVER  AND
SUCH  PERSON  SHALL  NOT BE  DEEMED TO BE A  CERTIFICATEHOLDER  FOR ANY  PURPOSE
HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

                                       10
<PAGE>

Certificate No. 1

Cut-off Date:
September 1, 2002

Date of Trust Agreement:
September 27, 2002

First Payment Date:                         Certificate Percentage Interest of
October 25, 2002                                   this Certificate:  100%

Assumed Final Payment Date:
August 25, 2032

                       HOME EQUITY LOAN-BACKED CERTIFICATE
                                 SERIES 2002-HS3

               evidencing  a  fractional  undivided  interest in the Owner Trust
Estate,  the  property of which  consists  primarily  of the Home Equity  Loans,
created by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.  (hereinafter called
the  "Depositor,"  which term includes any successor  entity under the Agreement
referred to below).

               This  Certificate  is payable solely from the assets of the Owner
Trust  Estate,  and does not  represent  an  obligation  of or  interest  in the
Depositor,  the Seller, the Master Servicer,  the Indenture  Trustee,  the Owner
Trustee  or  GMAC  Mortgage  Group,  Inc.  or  any  of  their  affiliates.  This
Certificate  is  not  guaranteed  or  insured  by  any  governmental  agency  or
instrumentality  or by the  Depositor,  the  Seller,  the Master  Servicer,  the
Indenture  Trustee,  the Owner  Trustee or GMAC Mortgage  Group,  Inc. or any of
their affiliates.  None of the Depositor,  the Seller, the Master Servicer,  the
Indenture Trustee, the Owner Trustee,  GMAC Mortgage Group, Inc. or any of their
affiliates  will have any  obligation  with respect to any  certificate or other
obligation secured by or payable from payments on the Certificates.

               This  certifies  that  Residential  Funding  Corporation  is  the
registered  owner  of the  Certificate  Percentage  Interest  evidenced  by this
Certificate  (as set forth on the face  hereof)  in certain  distributions  with
respect to the Owner  Trust  Estate,  consisting  primarily  of the Home  Equity
Loans, created by Residential Funding Mortgage Securities II, Inc. The Trust (as
defined  herein) was created  pursuant to a Trust  Agreement  dated as specified
above (as amended and supplemented  from time to time, the "Agreement")  between
the  Depositor  and  Wilmington  Trust  Company,  as owner  trustee  (the "Owner
Trustee,"  which term  includes any  successor  entity under the  Agreement),  a
summary of certain of the pertinent  provisions of which is set forth hereafter.
To the extent not defined  herein,  the  capitalized  terms used herein have the
meanings  assigned in the  Agreement.  This  Certificate  is issued under and is
subject to the terms,  provisions  and  conditions  of the  Agreement,  to which
Agreement  the Holder of this  Certificate  by virtue of the  acceptance  hereof
assents and by which such Holder is bound.

               Pursuant to the terms of the Agreement,  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 "Payment Date"),  commencing on the

                                       11
<PAGE>

first Payment Date specified above, to the Person in whose name this Certificate
is  registered  at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately  preceding the month of such distribution (the "Record Date"),
in an amount equal to the pro rata portion evidenced by this Certificate  (based
on the  Certificate  Percentage  Interest  stated  on the  face  hereon)  of the
Certificate  Distribution  Amount, if any, required to be distributed to Holders
of Certificates on such Payment Date.  Distributions on this Certificate will be
made as  provided  in the  Agreement  by the  Certificate  Paying  Agent by wire
transfer or check mailed to the  Certificateholder  of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon.

               Except as otherwise provided in the Agreement and notwithstanding
the above,  the final  distribution on this  Certificate  will be made after due
notice by the Certificate  Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the  Certificate  Registrar for that purpose in the City and State
of New York.

               Each Certificateholder of this Certificate will be deemed to have
agreed to be bound by the  restrictions set forth in the Agreement to the effect
that (i) each  person  holding  or  acquiring  any  Ownership  Interest  in this
Certificate must be a United States Person and a Permitted Transferee,  (ii) the
transfer of any Ownership  Interest in this Certificate will be conditioned upon
the delivery to the Indenture  Trustee of, among other  things,  an affidavit to
the effect that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported  transferee,  and (iv) if any person other than a United
States Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions,  then the Depositor will have the
right,  in its sole  discretion and without notice to the  Certificateholder  of
this  Certificate,  to sell this  Certificate  to a  purchaser  selected  by the
Depositor,  which  purchaser  may be the  Depositor,  or  any  affiliate  of the
Depositor, on such terms and conditions as the Depositor may choose.

               No  transfer of this Class R-II  Certificate  will be made unless
the  Certificate  Registrar  (unless  otherwise  directed by the  Depositor) has
received (i) a representation letter, in the form as described by the Agreement,
stating that the transferee is not an employee  benefit or other plan subject to
the prohibited transaction restrictions or fiduciary responsibility requirements
of ERISA or Section 4975 of the Code ("Plan"),  any person  acting,  directly or
indirectly,  on behalf of any such plan or any person  using the "plan  assets,"
within  the  meaning  of  the  Department  of  Labor  regulations  at 29  C.F.R.
ss.2510.3-101,  to effect such acquisition (collectively,  a "Plan Investor") or
(ii) if such transferee is a Plan Investor,  an opinion of counsel acceptable to
and in form and substance satisfactory to the Depositor,  the Owner Trustee, the
Master Servicer and the Certificate Registrar, or a certification in the form of
Exhibit G to the  Agreement,  to the effect  that the  purchase  or holding of a
Class R Certificate is permissible  under applicable law, will not constitute or
result in a  non-exempt  prohibited  transaction  under  Section 406 of ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent enactments)
and will not subject the Depositor,  the Owner Trustee,  the Master  Servicer or
the  Certificate  Registrar to any  obligation or liability in addition to those
undertaken in the Agreement.

               This   Certificate  is  one  of  a  duly   authorized   issue  of
Certificates  designated as Home Equity  Loan-Backed  Certificates of the Series
specified hereon (herein collectively called the "Certificates"). All terms used
in this  Certificate  which are defined in the Agreement shall have the meanings
assigned to them in the Agreement.

                                       12
<PAGE>

               The  Certificateholder,  by its  acceptance of this  Certificate,
agrees  that it will  look  solely to the funds on  deposit  in the  Certificate
Distribution  Account that have been released from the Lien of the Indenture for
payment hereunder and that neither the Owner Trustee in its individual  capacity
nor the Depositor is personally 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.

               The Holder of this  Certificate  acknowledges and agrees that its
rights to receive  distributions in respect of this Certificate are subordinated
to the rights of the  Noteholders  as  described in the  Indenture,  dated as of
September  27, 2002,  between Home Equity Loan Trust  2000-HS3 (the "Trust") and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture").

               Each  Certificateholder,  by  its  acceptance  of a  Certificate,
covenants and agrees that such  Certificateholder will not at any time institute
against  the  Depositor  or the Trust,  or join in any  institution  against the
Depositor  or  the  Trust  of,  any  bankruptcy,  reorganization,   arrangement,
insolvency or liquidation  proceedings,  or other  proceedings  under any United
States  federal  or state  bankruptcy  or  similar  law in  connection  with any
obligations relating to the Certificates, the Notes, the Agreement or any of the
Basic Documents.

               The Agreement  permits the amendment  thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit Enhancer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Agreement and will not cause the Trust to be
subject to an entity  level tax. If the purpose of the  amendment  is to correct
any mistake,  eliminate any  inconsistency,  cure any ambiguity or deal with any
matter not  covered,  it shall not be  necessary  to obtain  the  consent of any
Holder,  but the Owner Trustee shall be furnished  with a letter from the Rating
Agencies that the amendment will not result in the  downgrading or withdrawal of
the rating then  assigned to any Security if  determined  without  regard to the
related Policy and the consent of the Credit Enhancer shall be obtained.  If the
purpose of the  amendment is to prevent the  imposition  of any federal or state
taxes at any time that any Security is outstanding, it shall not be necessary to
obtain the consent of any Holder,  but the Owner Trustee shall be furnished with
an Opinion of Counsel that such amendment is necessary or helpful to prevent the
imposition  of such  taxes and is not  materially  adverse to any Holder and the
consent  of the  Credit  Enhancer  shall  be  obtained.  If the  purpose  of the
amendment is to add or eliminate or change any provision of the Agreement, other
than as specified in the preceding two  sentences,  the amendment  shall require
either (a) a letter from the Rating  Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the related Policy or (b) the consent of Holders of
a majority of the Certificate  Percentage  Interests of the Certificates and the
Indenture Trustee; provided, however, that no such amendment shall (i) reduce in
any  manner  the amount  of, or delay the time of,  payments  received  that are
required to be distributed on any Certificate without the consent of the related
Certificateholder  and  the  Credit  Enhancer,  or  (ii)  reduce  the  aforesaid
percentage 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.

               As provided in the Agreement  and subject to certain  limitations
therein set forth,  the  transfer of this  Certificate  is  registerable  in the
Certificate  Register upon surrender of this  Certificate  for  registration  of
transfer at the offices or agencies of the Certificate  Registrar  maintained in
the City and State of New York,  accompanied by a written instrument of transfer
in form  satisfactory to the  Certificate  Registrar duly executed by the Holder

                                       13
<PAGE>

hereof or such Holder's  attorney duly authorized in writing,  and thereupon one
or more  new  Certificates  of  authorized  denominations  evidencing  the  same
aggregate  Certificate  Percentage  Interest  will be issued  to the  designated
transferee.  The initial Certificate  Registrar appointed under the Agreement is
the Indenture Trustee.

               Except  as  provided  in  the  Agreement,  the  Certificates  are
issuable  only in minimum  denominations  of a 10.0000%  Certificate  Percentage
Interest and in integral multiples of a 0.0001% Certificate  Percentage Interest
in  excess  thereof.  As  provided  in the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of   authorized   denominations,   as  requested  by  the  Holder
surrendering the same. This Certificate is issued in the Certificate  Percentage
Interest above; however, the Certificate Percentage Interest of this Certificate
may change in accordance with Section 3.12 of the Agreement.  The Holder of this
Certificate hereby consents to any change in its Certificate Percentage Interest
in accordance with such Section.

               No  service  charge  will be made  for any such  registration  of
transfer or exchange,  but the Owner  Trustee or the  Certificate  Registrar may
require  payment of a sum  sufficient  to cover any tax or  governmental  charge
payable in connection therewith.

               The Owner Trustee,  the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee,  the Certificate  Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes,  and none of the Owner Trustee,
the Certificate Paying Agent, the Certificate  Registrar or any such agent shall
be affected by any notice to the contrary.

               This Certificate shall be governed by and construed in accordance
with the laws of the State of Delaware.

               The  obligations  created  by the  Agreement  in  respect  of the
Certificates  and the Trust created thereby shall terminate upon the earliest of
(i) the final  distribution  of all moneys or other  property or proceeds of the
Owner  Trust  Estate  in  accordance  with the  terms of the  Indenture  and the
Agreement,  (ii) the Payment Date in August  2032,  or (iii) the purchase by the
Master  Servicer of all Revolving  Credit Loans  pursuant to Section 8.08 of the
Servicing Agreement.

               Unless the certificate of  authentication  hereon shall have been
executed by an authorized  officer of the Owner  Trustee,  or an  authenticating
agent by manual signature, this Certificate shall not be entitled to any benefit
under the Agreement or be valid for any purpose.

                                       14
<PAGE>

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

                               HOME EQUITY LOAN TRUST 2000-HS3

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

Dated:  September 27, 2002     By:
                                   ---------------------------------------
                                   Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

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

                                  By: ______________________________
                                       Authorized Signatory

                                  or JPMORGAN CHASE BANK,
                                  not in its individual capacity but solely,
                                  as Authenticating Agent of the Trust

Dated: September 27, 2002

                                            By: ______________________________
                                                Authorized Signatory

                                       15
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE___________________________________

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

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

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

Dated:____________________

                                _____________________________________*/
                                   Signature Guaranteed:

                                ____________________________*/

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

*/ NOTICE:  The signature to this assignment must correspond with the name as it
appears upon the face of the within  Certificate  in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed by a member firm of the New York Stock Exchange or a commercial  bank
or trust company.

                                       16
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The  assignee  should  include the  following  for the  information  of the
Certificate Paying Agent:

     Distribution shall be made by wire transfer in immediately  available funds
to  __________________________  for the  account of  __________________________,
account number ______________, or, if mailed by check, to ______________.

     Applicable statements should be mailed to __________________.

                             ------------------------------
                             Signature of assignee or agent
                             (for authorization of wire transfer only)

                                       17
<PAGE>

                        FORM OF CLASS R-III CERTIFICATES

THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

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 (THE "CODE").

NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION  PURSUANT TO SECTION 3.05 OF THE AGREEMENT OR AN
OPINION OF COUNSEL  SATISFACTORY  TO THE  SERVICER,  THE COMPANY AND THE TRUSTEE
THAT THE  PURCHASE  OF THIS  CERTIFICATE  WILL NOT  CONSTITUTE  OR  RESULT  IN A
NON-EXEMPT  PROHIBITED  TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED  ("ERISA"),  OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE SERVICER,  THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION
OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.

ANY RESALE,  TRANSFER OR OTHER  DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE SERVICER AND THE
TRUSTEE  THAT (1) SUCH  TRANSFEREE  IS NOT (A) THE UNITED  STATES,  ANY STATE OR
POLITICAL  SUBDIVISION  THEREOF,  ANY  POSSESSION OF THE UNITED  STATES,  OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION  IF ALL OF ITS  ACTIVITIES  ARE SUBJECT TO TAX AND EXCEPT
FOR THE FHLMC,  A MAJORITY  OF ITS BOARD OF  DIRECTORS  IS NOT  SELECTED BY SUCH
GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY  OF EITHER OF THE FOREGOING,  (C) ANY ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES  DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS  EXEMPT  FROM THE TAX  IMPOSED  BY  CHAPTER 1 OF THE CODE  UNLESS  SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX  IMPOSED  BY  SECTION  511 OF THE  CODE ON  UNRELATED  BUSINESS  TAXABLE
INCOME),  (D) RURAL  ELECTRIC AND  TELEPHONE  COOPERATIVES  DESCRIBED IN SECTION
1381(a)(2)(C)  OF THE CODE,  (E) AN ELECTING  LARGE  PARTNERSHIP  UNDER  SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED  ORGANIZATION"),  OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION,  (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE  SATISFIES
CERTAIN  ADDITIONAL  CONDITIONS  RELATING  TO  THE  FINANCIAL  CONDITION  OF THE
PROPOSED  TRANSFEREE.   NOTWITHSTANDING  THE  REGISTRATION  IN  THE  CERTIFICATE
REGISTER OR ANY TRANSFER,  SALE OR OTHER  DISPOSITION  OF THIS  CERTIFICATE TO A

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DISQUALIFIED  ORGANIZATION  OR AN AGENT  OF A  DISQUALIFIED  ORGANIZATION,  SUCH
REGISTRATION  SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT  WHATSOEVER  AND
SUCH  PERSON  SHALL  NOT BE  DEEMED TO BE A  CERTIFICATEHOLDER  FOR ANY  PURPOSE
HEREUNDER,  INCLUDING,  BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE.  EACH HOLDER OF THIS  CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.

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Certificate No. 1

Cut-off Date:
September 1, 2002

Date of Trust Agreement:
September 27, 2002

First Payment Date:                         Certificate Percentage Interest of
October 25, 2002                                   this Certificate:  100%

Assumed Final Payment Date:
August 25, 2032

                       HOME EQUITY LOAN-BACKED CERTIFICATE
                                 SERIES 2002-HS3

               evidencing  a  fractional  undivided  interest in the Owner Trust
Estate,  the  property of which  consists  primarily  of the Home Equity  Loans,
created by RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.  (hereinafter called
the  "Depositor,"  which term includes any successor  entity under the Agreement
referred to below).

               This  Certificate  is payable solely from the assets of the Owner
Trust  Estate,  and does not  represent  an  obligation  of or  interest  in the
Depositor,  the Seller, the Master Servicer,  the Indenture  Trustee,  the Owner
Trustee  or  GMAC  Mortgage  Group,  Inc.  or  any  of  their  affiliates.  This
Certificate  is  not  guaranteed  or  insured  by  any  governmental  agency  or
instrumentality  or by the  Depositor,  the  Seller,  the Master  Servicer,  the
Indenture  Trustee,  the Owner  Trustee or GMAC Mortgage  Group,  Inc. or any of
their affiliates.  None of the Depositor,  the Seller, the Master Servicer,  the
Indenture Trustee, the Owner Trustee,  GMAC Mortgage Group, Inc. or any of their
affiliates  will have any  obligation  with respect to any  certificate or other
obligation secured by or payable from payments on the Certificates.

               This  certifies  that  Residential  Funding  Corporation  is  the
registered  owner  of the  Certificate  Percentage  Interest  evidenced  by this
Certificate  (as set forth on the face  hereof)  in certain  distributions  with
respect to the Owner  Trust  Estate,  consisting  primarily  of the Home  Equity
Loans, created by Residential Funding Mortgage Securities II, Inc. The Trust (as
defined  herein) was created  pursuant to a Trust  Agreement  dated as specified
above (as amended and supplemented  from time to time, the "Agreement")  between
the  Depositor  and  Wilmington  Trust  Company,  as owner  trustee  (the "Owner
Trustee,"  which term  includes any  successor  entity under the  Agreement),  a
summary of certain of the pertinent  provisions of which is set forth hereafter.
To the extent not defined  herein,  the  capitalized  terms used herein have the
meanings  assigned in the  Agreement.  This  Certificate  is issued under and is
subject to the terms,  provisions  and  conditions  of the  Agreement,  to which
Agreement  the Holder of this  Certificate  by virtue of the  acceptance  hereof
assents and by which such Holder is bound.

               Pursuant to the terms of the Agreement,  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 "Payment Date"),  commencing on the

                                       20
<PAGE>

first Payment Date specified above, to the Person in whose name this Certificate
is  registered  at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month immediately  preceding the month of such distribution (the "Record Date"),
in an amount equal to the pro rata portion evidenced by this Certificate  (based
on the  Certificate  Percentage  Interest  stated  on the  face  hereon)  of the
Certificate  Distribution  Amount, if any, required to be distributed to Holders
of Certificates on such Payment Date.  Distributions on this Certificate will be
made as  provided  in the  Agreement  by the  Certificate  Paying  Agent by wire
transfer or check mailed to the  Certificateholder  of record in the Certificate
Register without the presentation or surrender of this Certificate or the making
of any notation hereon.

               Except as otherwise provided in the Agreement and notwithstanding
the above,  the final  distribution on this  Certificate  will be made after due
notice by the Certificate  Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the  Certificate  Registrar for that purpose in the City and State
of New York.

               Each Certificateholder of this Certificate will be deemed to have
agreed to be bound by the  restrictions set forth in the Agreement to the effect
that (i) each  person  holding  or  acquiring  any  Ownership  Interest  in this
Certificate must be a United States Person and a Permitted Transferee,  (ii) the
transfer of any Ownership  Interest in this Certificate will be conditioned upon
the delivery to the Indenture  Trustee of, among other  things,  an affidavit to
the effect that it is a United States Person and Permitted Transferee, (iii) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported  transferee,  and (iv) if any person other than a United
States Person and a Permitted Transferee acquires any Ownership Interest in this
Certificate in violation of such restrictions,  then the Depositor will have the
right,  in its sole  discretion and without notice to the  Certificateholder  of
this  Certificate,  to sell this  Certificate  to a  purchaser  selected  by the
Depositor,  which  purchaser  may be the  Depositor,  or  any  affiliate  of the
Depositor, on such terms and conditions as the Depositor may choose.

               No transfer of this Class R-III  Certificate  will be made unless
the  Certificate  Registrar  (unless  otherwise  directed by the  Depositor) has
received (i) a representation letter, in the form as described by the Agreement,
stating that the transferee is not an employee  benefit or other plan subject to
the prohibited transaction restrictions or fiduciary responsibility requirements
of ERISA or Section 4975 of the Code ("Plan"),  any person  acting,  directly or
indirectly,  on behalf of any such plan or any person  using the "plan  assets,"
within  the  meaning  of  the  Department  of  Labor  regulations  at 29  C.F.R.
ss.2510.3-101,  to effect such acquisition (collectively,  a "Plan Investor") or
(ii) if such transferee is a Plan Investor,  an opinion of counsel acceptable to
and in form and substance satisfactory to the Depositor,  the Owner Trustee, the
Master Servicer and the Certificate Registrar, or a certification in the form of
Exhibit G to the  Agreement,  to the effect  that the  purchase  or holding of a
Class R Certificate is permissible  under applicable law, will not constitute or
result in a  non-exempt  prohibited  transaction  under  Section 406 of ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent enactments)
and will not subject the Depositor,  the Owner Trustee,  the Master  Servicer or
the  Certificate  Registrar to any  obligation or liability in addition to those
undertaken in the Agreement.

               This   Certificate  is  one  of  a  duly   authorized   issue  of
Certificates  designated as Home Equity  Loan-Backed  Certificates of the Series
specified hereon (herein collectively called the "Certificates"). All terms used

                                       21
<PAGE>

in this  Certificate  which are defined in the Agreement shall have the meanings
assigned to them in the Agreement.

               The  Certificateholder,  by its  acceptance of this  Certificate,
agrees  that it will  look  solely to the funds on  deposit  in the  Certificate
Distribution  Account that have been released from the Lien of the Indenture for
payment hereunder and that neither the Owner Trustee in its individual  capacity
nor the Depositor is personally 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.

               The Holder of this  Certificate  acknowledges and agrees that its
rights to receive  distributions in respect of this Certificate are subordinated
to the rights of the  Noteholders  as  described in the  Indenture,  dated as of
September  27, 2002,  between Home Equity Loan Trust  2000-HS3 (the "Trust") and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture").

               Each  Certificateholder,  by  its  acceptance  of a  Certificate,
covenants and agrees that such  Certificateholder will not at any time institute
against  the  Depositor  or the Trust,  or join in any  institution  against the
Depositor  or  the  Trust  of,  any  bankruptcy,  reorganization,   arrangement,
insolvency or liquidation  proceedings,  or other  proceedings  under any United
States  federal  or state  bankruptcy  or  similar  law in  connection  with any
obligations relating to the Certificates, the Notes, the Agreement or any of the
Basic Documents.

               The Agreement  permits the amendment  thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit Enhancer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Agreement and will not cause the Trust to be
subject to an entity  level tax. If the purpose of the  amendment  is to correct
any mistake,  eliminate any  inconsistency,  cure any ambiguity or deal with any
matter not  covered,  it shall not be  necessary  to obtain  the  consent of any
Holder,  but the Owner Trustee shall be furnished  with a letter from the Rating
Agencies that the amendment will not result in the  downgrading or withdrawal of
the rating then  assigned to any Security if  determined  without  regard to the
related Policy and the consent of the Credit Enhancer shall be obtained.  If the
purpose of the  amendment is to prevent the  imposition  of any federal or state
taxes at any time that any Security is outstanding, it shall not be necessary to
obtain the consent of any Holder,  but the Owner Trustee shall be furnished with
an Opinion of Counsel that such amendment is necessary or helpful to prevent the
imposition  of such  taxes and is not  materially  adverse to any Holder and the
consent  of the  Credit  Enhancer  shall  be  obtained.  If the  purpose  of the
amendment is to add or eliminate or change any provision of the Agreement, other
than as specified in the preceding two  sentences,  the amendment  shall require
either (a) a letter from the Rating  Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the related Policy or (b) the consent of Holders of
a majority of the Certificate  Percentage  Interests of the Certificates and the
Indenture Trustee; provided, however, that no such amendment shall (i) reduce in
any  manner  the amount  of, or delay the time of,  payments  received  that are
required to be distributed on any Certificate without the consent of the related
Certificateholder  and  the  Credit  Enhancer,  or  (ii)  reduce  the  aforesaid
percentage 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.

               As provided in the Agreement  and subject to certain  limitations
therein set forth,  the  transfer of this  Certificate  is  registerable  in the
Certificate  Register upon surrender of this  Certificate  for  registration  of
transfer at the offices or agencies of the Certificate  Registrar  maintained in
the City and State of New York,  accompanied by a written instrument of transfer
in form  satisfactory to the  Certificate  Registrar duly executed by the Holder

                                       22
<PAGE>

hereof or such Holder's  attorney duly authorized in writing,  and thereupon one
or more  new  Certificates  of  authorized  denominations  evidencing  the  same
aggregate  Certificate  Percentage  Interest  will be issued  to the  designated
transferee.  The initial Certificate  Registrar appointed under the Agreement is
the Indenture Trustee.

               Except  as  provided  in  the  Agreement,  the  Certificates  are
issuable  only in minimum  denominations  of a 10.0000%  Certificate  Percentage
Interest and in integral multiples of a 0.0001% Certificate  Percentage Interest
in  excess  thereof.  As  provided  in the  Agreement  and  subject  to  certain
limitations  therein  set  forth,  the  Certificates  are  exchangeable  for new
Certificates   of   authorized   denominations,   as  requested  by  the  Holder
surrendering the same. This Certificate is issued in the Certificate  Percentage
Interest above; however, the Certificate Percentage Interest of this Certificate
may change in accordance with Section 3.12 of the Agreement.  The Holder of this
Certificate hereby consents to any change in its Certificate Percentage Interest
in accordance with such Section.

               No  service  charge  will be made  for any such  registration  of
transfer or exchange,  but the Owner  Trustee or the  Certificate  Registrar may
require  payment of a sum  sufficient  to cover any tax or  governmental  charge
payable in connection therewith.

               The Owner Trustee,  the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee,  the Certificate  Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes,  and none of the Owner Trustee,
the Certificate Paying Agent, the Certificate  Registrar or any such agent shall
be affected by any notice to the contrary.

               This Certificate shall be governed by and construed in accordance
with the laws of the State of Delaware.

               The  obligations  created  by the  Agreement  in  respect  of the
Certificates  and the Trust created thereby shall terminate upon the earliest of
(i) the final  distribution  of all moneys or other  property or proceeds of the
Owner  Trust  Estate  in  accordance  with the  terms of the  Indenture  and the
Agreement,  (ii) the Payment Date in August  2032,  or (iii) the purchase by the
Master  Servicer of all Revolving  Credit Loans  pursuant to Section 8.08 of the
Servicing Agreement.

               Unless the certificate of  authentication  hereon shall have been
executed by an authorized  officer of the Owner  Trustee,  or an  authenticating
agent by manual signature, this Certificate shall not be entitled to any benefit
under the Agreement or be valid for any purpose.

                                       23
<PAGE>

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

                                HOME EQUITY LOAN TRUST 2000-HS3

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

Dated:  September 27, 2002      By:
                                    ---------------------------------------
                                    Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION

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

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

                                 By: ______________________________
                                      Authorized Signatory

                                 or JPMORGAN CHASE BANK,
                                 not in its individual capacity but solely,
                                 as Authenticating Agent of the Trust

Dated: September 27, 2002

                                            By: ______________________________
                                                Authorized Signatory

                                       24
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR

OTHER IDENTIFYING NUMBER OF ASSIGNEE___________________________________

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

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

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

Dated:____________________

                                _____________________________________*/
                                   Signature Guaranteed:

                                ____________________________*/

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

*/ NOTICE:  The signature to this assignment must correspond with the name as it
appears upon the face of the within  Certificate  in every  particular,  without
alteration,   enlargement  or  any  change  whatever.  Such  signature  must  be
guaranteed by a member firm of the New York Stock Exchange or a commercial  bank
or trust company.

                                       25
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

     The  assignee  should  include the  following  for the  information  of the
Certificate Paying Agent:

     Distribution shall be made by wire transfer in immediately  available funds
to  __________________________  for the  account of  __________________________,
account number ______________, or, if mailed by check, to ______________.

     Applicable statements should be mailed to __________________.

                             ------------------------------
                             Signature of assignee or agent
                             (for authorization of wire transfer only)

                                       26
<PAGE>

                                   EXHIBIT J-1

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

STATE OF                         )

                                 )    ss.:

COUNTY OF                        )
               [NAME OF OFFICER], being first duly sworn, deposes and says:

1. That he is [Title of Officer] of [Name of Owner] (record or beneficial  owner
of the Home Equity Loan-Backed  Certificates,  Series 2002-HS3, Class R-[ ] (the
"Owner")),  a [savings  institution]  [corporation]  duly organized and existing
under the laws of [the  State of ] [the  United  States],  on behalf of which he
makes this affidavit and agreement.

2. That the Owner (i) is not and will not be a "disqualified organization" or an
electing  large  partnership  as of [date of  transfer]  within  the  meaning of
Sections 860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986,
as amended (the "Code") or an electing large partnership under Section 775(a) of
the Code,  (ii) will endeavor to remain other than a  disqualified  organization
for  so  long  as  it  retains  its  ownership  interest  in  the  Class  R-[  ]
Certificates,  and (iii) is acquiring the Class R-[ ]  Certificates  for its own
account  or for the  account of another  Owner  from  which it has  received  an
affidavit and  agreement in  substantially  the same form as this  affidavit and
agreement.  (For this purpose, a "disqualified  organization"  means an electing
large partnership under Section 775 of the Code, the United States, any state or
political  subdivision  thereof,  any  agency or  instrumentality  of any of the
foregoing  (other than an  instrumentality  all of the  activities  of which are
subject to tax and,  except for the Federal Home Loan  Mortgage  Corporation,  a
majority of whose board of directors  is not  selected by any such  governmental
entity) or any foreign government,  international  organization or any agency or
instrumentality of such foreign  government or organization,  any rural electric
or telephone  cooperative,  or any  organization  (other than  certain  farmers'
cooperatives)  that is  generally  exempt  from  federal  income tax unless such
organization is subject to the tax on unrelated business taxable income).

3. That the Owner is aware (i) of the tax that would be imposed on  transfers of
Class  R  Certificates   to   disqualified   organizations   or  electing  large
partnerships,  under  the  Code,  that  applies  to all  transfers  of  Class  R
Certificates after March 31, 1988; (ii) that such tax would be on the transferor
(or,  with  respect to transfers to electing  large  partnerships,  on each such
partnership),  or, if such transfer is through an agent (which person includes a
broker,  nominee or middleman)  for a disqualified  organization,  on the agent;
(iii) that the person  (other than with respect to  transfers to electing  large
partnerships)  otherwise  liable for the tax shall be relieved of liability  for
the tax if the  transferee  furnishes  to such  person  an  affidavit  that  the
transferee is not a disqualified organization and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
the Class R-[ ] Certificates may be "noneconomic  residual interests" within the
meaning of Treasury  regulations  promulgated  pursuant to the Code and that the

                                       1
<PAGE>

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.

4. That the Owner is aware of the tax imposed on a "pass-through entity" holding
Class R  Certificates  if either the  pass-through  entity is an electing  large
partnership  under  Section 775 of the if at any time during the taxable year of
the pass-through  entity a disqualified  organization is the record holder of an
interest in such entity.  (For this purpose,  a "pass through entity" includes a
regulated  investment  company,  a real estate  investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

5. The Owner is either (i) a citizen or  resident of the United  States,  (ii) a
corporation,  partnership  or  other  entity  treated  as  a  corporation  or  a
partnership for U.S.  federal income tax purposes and created or organized in or
under the laws of the  United  States,  any state  thereof  or the  District  of
Columbia (other than a partnership that is not treated as a United States person
under any applicable Treasury regulations), (iii) an estate that is described in
Section 7701(a)(30)(D) of the Code, or (iv) a trust that is described in Section
7701(a)(30)(E) of the Code.

6. The Owner  hereby  agrees that it will not cause income from the Class R- [ ]
Certificates to be attributable to a foreign  permanent  establishment  or fixed
base  (within  the meaning of an  applicable  income tax treaty) of the Owner or
another United States taxpayer.

7. That the Owner is aware that the Certificate  Registrar will not register the
transfer of any Class R Certificates unless the transferee,  or the transferee's
agent,  delivers  to it an  affidavit  and  agreement,  among other  things,  in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees  that it will not  consummate  any such  transfer if it knows or believes
that any of the  representations  contained in such  affidavit and agreement are
false.

8. That the Owner has  reviewed  the  restrictions  set forth on the face of the
Class R Certificates  and the provisions of Section 3.05 of the Trust  Agreement
under  which the Class R-[ ]  Certificates  were issued (in  particular,  clause
(i)(A) and (i)(B) of Section 3.05 which authorize the  Certificate  Registrar to
deliver payments to a person other than the Owner and negotiate a mandatory sale
by the  Servicer  Trustee  in the event the Owner  holds  such  Certificates  in
violation of Section  3.05).  The Owner  expressly  agrees to be bound by and to
comply with such restrictions and provisions.

9. That the Owner consents to any additional  restrictions or arrangements  that
shall be deemed  necessary  upon advice of counsel to  constitute  a  reasonable
arrangement  to ensure  that the Class  R-[ ]  Certificates  will only be owned,
directly or indirectly, by an Owner that is not a disqualified organization.

10.     The Owner's Taxpayer Identification Number is   ____________________.

11. This  affidavit and agreement  relates only to the Class R-[ ]  Certificates
held by the Owner and not to any  other  holder of the Class R-[  ]Certificates.
The Owner  understands that the liabilities  described herein relate only to the
Class R-[ ] Certificates.

                                       2
<PAGE>

12. That no purpose of the Owner  relating  to the  transfer of any of the Class
R-[ ]  Certificates  by the  Owner is or will be to  impede  the  assessment  or
collection of any tax; in making this  representation,  the Owner  warrants that
the Owner is familiar  with (i)  Treasury  Regulation  Section  1.860E-1(c)  and
recent amendments thereto,  effective as of July 19, 2002, and (ii) the preamble
describing the adoption of the amendments to such regulation,  which is attached
hereto as Exhibit 1.

13.  That the Owner has no  present  knowledge  or  expectation  that it will be
unable  to  pay  any  United  States  taxes  owed  by it so  long  as any of the
Certificates remain outstanding.  In this regard, the Owner hereby represents to
and for the  benefit  of the  person  from  whom it  acquired  the  Class  R-[ ]
Certificate  that the Owner  intends to pay taxes  associated  with holding such
Class R-[ ]  Certificate  as they become due,  fully  understanding  that it may
incur tax  liabilities in excess of any cash flows  generated by the Class R-[ ]
Certificate.

14. That the Owner has no present  knowledge or expectation  that it will become
insolvent or subject to a bankruptcy  proceeding for so long as any of the Class
R-[ ] Certificates remain outstanding.

15. The  Purchaser is not an employee  benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income Security Act
of 1974, as amended  ("ERISA"),  or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"),  or an investment  manager,  named fiduciary or a
trustee of any such plan, or any other Person acting, directly or indirectly, on
behalf of or purchasing any Certificate with "plan assets" of any such plan.

                                       3
<PAGE>

               IN WITNESS  WHEREOF,  the Owner has caused this  instrument to be
executed on its behalf,  pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached,  attested
by its [Assistant] Secretary, this ____ day of __________, ____________.

                                            [NAME OF OWNER]

                                            By:
                                               -----------------------------
                                                 [Name of Officer]
                                                 [Title of Officer]
[Corporate Seal]

ATTEST:

[Assistant] Secretary

               Personally  appeared before me the above-named [Name of Officer],
        known or proved to me to be the same person who executed  the  foregoing
        instrument  and  to  be  the  [Title  of  Officer]  of  the  Owner,  and
        acknowledged  to me that he  executed  the same as his free act and deed
        and the free act and deed of the Owner.

               Subscribed  and  sworn  before  me this  ____ day of  __________,
          ____________.

                                NOTARY PUBLIC

                           COUNTY OF
                                    ----------------------------------
                           STATE OF
                                   -----------------------------------
                            My Commission  expires the ____day of ___,20 .

                                       4
<PAGE>

                                    EXHIBIT 1

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Parts 1 and 602

[TD 9004]
RIN 1545-AW98

Real Estate Mortgage Investment Conduits

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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

SUMMARY:  This  document  contains  final  regulations  relating  to safe harbor
transfers of noneconomic  residual interests in real estate mortgage  investment
conduits (REMICs).  The final regulations provide additional  limitations on the
circumstances under which transferors may claim safe harbor treatment.

DATES: Effective Date: These regulations are effective July 19, 2002.
    Applicability Date: For dates of applicability, see Sec. 1.860E-
(1)(c)(10).

FOR FURTHER INFORMATION CONTACT: Courtney Shepardson at (202) 622-3940
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

    The  collection  of  information  in this final rule has been  reviewed and,
pending  receipt and  evaluation of public  comments,  approved by the Office of
Management  and Budget (OMB) under 44 U.S.C.  3507 and assigned  control  number
1545-1675.
    The  collection  of  information  in  this  regulation  is in  Sec.  1.860E-
1(c)(5)(ii).  This  information  is  required to enable the IRS to verify that a
taxpayer is complying with the conditions of this regulation.  The collection of
information  is mandatory  and is  required.  Otherwise,  the taxpayer  will not
receive the benefit of safe harbor treatment as provided in the regulation.  The
likely respondents are businesses and other for-profit institutions.

                                       5
<PAGE>

    Comments on the  collection of  information  should be sent to the Office of
Management  and Budget,  Attn:  Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, Washington, DC, 20503, with copies
to  the  Internal  Revenue  Service,   Attn:  IRS  Reports  Clearance   Officer,
W:CAR:MP:FP:S,  Washington,  DC 20224. Comments on the collection of information
should be received by September 17, 2002.  Comments are  specifically  requested
concerning:
    Whether  the   collection  of   information  is  necessary  for  the  proper
performance of the functions of the Internal Revenue Service,  including whether
the information will have practical utility;
    The accuracy of the estimated burden associated with the collection
of information (see below);
    How the quality, utility, and clarity of the information to be
collected may be enhanced;
    How the  burden of  complying  with the  collection  of  information  may be
minimized,  including through the application of automated collection techniques
or other forms of information technology; and
    Estimates of capital or start-up costs and costs of operation,  maintenance,
and purchase of service to provide information.
    An agency  may not  conduct  or  sponsor,  and a person is not  required  to
respond to, a  collection  of  information  unless it  displays a valid  control
number assigned by the Office of Management and Budget.
    The  estimated  total  annual  reporting  burden is 470  hours,  based on an
estimated  number of respondents  of 470 and an estimated  average annual burden
hours per respondent of one hour.
    Books or records relating to a collection of information must be retained as
long as their contents may become material in the administration of any internal
revenue law. Generally, tax returns and tax return information are confidential,
as required by 26 U.S.C. 6103.

Background

    This document contains final regulations  regarding the proposed  amendments
to 26 CFR part 1 under  section  860E of the Internal  Revenue Code (Code).  The
regulations  provide the circumstances under which a transferor of a noneconomic
REMIC  residual   interest   meeting  the   investigation   and   representation
requirements  may avail  itself  of the safe  harbor by  satisfying  either  the
formula test or the asset test.
    Final regulations  governing REMICs, issued in 1992, contain rules governing
the transfer of noneconomic REMIC residual interests.  In general, a transfer of
a  noneconomic  residual  interest  is  disregarded  for all tax  purposes  if a
significant purpose of the transfer is to

[[Page 47452]]

enable the  transferor to impede the  assessment or collection of tax. A purpose
to impede the assessment or collection of tax (a wrongful purpose) exists if the
transferor,  at the time of the transfer,  either knew or should have known that
the transferee would be unwilling or unable to pay taxes due on its share of the
REMIC's taxable income.

                                       6
<PAGE>

    Under a safe harbor, the transferor of a REMIC noneconomic residual interest
is presumed not to have a wrongful  purpose if two  requirements  are satisfied:
(1) the  transferor  conducts a  reasonable  investigation  of the  transferee's
financial  condition  (the  investigation  requirement);  and (2) the transferor
secures a  representation  from the transferee to the effect that the transferee
understands the tax obligations  associated with holding a residual interest and
intends to pay those taxes (the representation requirement).
    The  IRS  and  Treasury  have  been  concerned  that  some   transferors  of
noneconomic  residual  interests  claim they  satisfy  the safe  harbor  even in
situations  where the economics of the transfer  clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest.  For
this reason,  on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula  test," an economic  test. The
proposed  regulation  provides  that the safe harbor is  unavailable  unless the
present value of the  anticipated  tax  liabilities  associated with holding the
residual  interest  does not  exceed the sum of:  (1) The  present  value of any
consideration  given to the transferee to acquire the interest;  (2) the present
value of the expected future distributions on the interest;  and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
    The notice of proposed  rulemaking also contained rules for FASITs.  Section
1.860H-6(g) of the proposed regulations  provides  requirements for transfers of
FASIT  ownership  interests  and adopts a safe harbor by  reference  to the safe
harbor provisions of the REMIC regulations.
    In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335) to
set forth an alternative  safe harbor that taxpayers could use while the IRS and
the  Treasury  considered  comments  on  the  proposed  regulations.  Under  the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation  requirement but the transfer fails to meet the formula test,
the transferor  may invoke the safe harbor if the transferee  meets a two- prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of  transfer,  the  transferee's  gross  assets  exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a  domestic,  taxable  corporation  and agrees in  writing  not to
transfer  the  interest  to any person  other  than  another  domestic,  taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the  transferor  knows,  or has reason to know,
that the  transferee  will not comply  with its written  agreement  to limit the
restrictions on subsequent transfers of the residual interest.

                                       7
<PAGE>

    Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in the
case of a transfer or assignment of a noneconomic residual interest to a foreign
branch of an otherwise  eligible  transferee.  If such a transfer or  assignment
were permitted,  a corporate taxpayer might seek to claim that the provisions of
an  applicable  income tax treaty  would  resource  excess  inclusion  income as
foreign  source  income,  and that,  as a  consequence,  any U.S. tax  liability
attributable  to the excess  inclusion  income  could be offset by  foreign  tax
credits.  Such a claim would impede the  assessment or collection of U.S. tax on
excess inclusion income,  contrary to the congressional purpose of assuring that
such income will be taxable in all events. See, e.g., sections 860E(a)(1),  (b),
(e) and 860G(b) of the Code.
    The Treasury and the IRS have  learned that certain  taxpayers  transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula  test to obtain  safe  harbor  treatment  in an  effort  to  impede  the
assessment or collection of U.S. tax on excess  inclusion  income.  Accordingly,
the  final  regulations  provide  that if a  noneconomic  residual  interest  is
transferred  to a  foreign  permanent  establishment  or  fixed  base  of a U.S.
taxpayer,  the transfer is not eligible for safe harbor  treatment  under either
the asset  test or the  formula  test.  The  final  regulations  also  require a
transferee  to  represent  that it will not cause  income  from the  noneconomic
residual  interest to be attributable to a foreign  permanent  establishment  or
fixed base.
    Section 1.860E-1(c)(8)  provides computational rules that a taxpayer may use
to  qualify  for  safe  harbor   status   under  the   formula   test.   Section
1.860E-1(c)(8)(i)  provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b).  Some  commentators
were  concerned that this presumed rate of taxation was too high because it does
not take into  consideration  taxpayers  subject to the alternative  minimum tax
rate. In light of the comments received,  this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative  minimum tax rate to use the alternative  minimum tax rate
applicable to corporations.
    Additionally,  Sec.  1.860E-1(c)(8)(iii) provides that the present values in
the  formula  test  are to be  computed  using  a  discount  rate  equal  to the
applicable  Federal  short-term  rate prescribed by section  1274(d).  This is a
change  from  the  proposed   regulation  and  Rev.  Proc.   2001-12.  In  those
publications  the  provision  stated that "present  values are computed  using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded  semiannually"  and that "[a] lower  discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or  business,  substantial  funds at such  lower  rate from an  unrelated  third
party." The IRS and the Treasury  Department  have learned  that,  based on this
provision,  certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test,  frustrating  the intent of the
test.  Furthermore,  the  Treasury  Department  and the IRS believe  that a rule
allowing  for a rate  other than a rate based on an  objective  index  would add

                                       8
<PAGE>

unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations  that  permits a transferee  to use a lower  discount  rate,  if the
transferee can demonstrate that it regularly  borrows  substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate  has  been  substituted  for  the  applicable  Federal  rate.  To  simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term  rates,  provided  that  the  present  values  are  computed  with  a
corresponding  period  of  compounding.  With the  exception  of the  provisions
relating to transfers to foreign  branches,  these  changes  generally  have the
proposed  applicability  date of February 4, 2000,  but  taxpayers may choose to
apply the interest  rate formula set forth in the proposed  regulation  and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
    It is anticipated that when final regulations are adopted with
respect to

[[Page 47453]]

FASITs,  Sec.  1.860H-6(g)  of the  proposed  regulations  will  be  adopted  in
substantially  its  present  form,  with the result  that the final  regulations
contained  in this  document  will  also  govern  transfers  of FASIT  ownership
interests with substantially the same applicability date as is contained in this
document.

Effect on Other Documents

    Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August
19, 2002.

Special Analyses

    It is hereby  certified that these  regulations  will not have a significant
economic impact on a substantial number of small entities. This certification is
based  on the  fact  that it is  unlikely  that a  substantial  number  of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis  under  the  Regulatory  Flexibility  Act (5 U.S.C.  chapter  6) is not
required.  It  has  been  determined  that  this  Treasury  decision  is  not  a
significant regulatory action as defined in Executive Order 12866.  Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the  Administrative  Procedure Act (5 U.S.C.  chapter 5) do
not apply to these regulations.

                                       9
<PAGE>

Drafting Information

    The principal author of these regulations is Courtney  Shepardson.  However,
other  personnel  from the IRS and  Treasury  Department  participated  in their
development.

List of Subjects

26 CFR Part 1

    Income taxes, Reporting and record keeping requirements.

26 CFR Part 602

    Reporting and record keeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR parts 1 and 602 are amended as follows:

PART 1--INCOME TAXES

    Paragraph 1. The authority  citation for part 1 continues to read in part as
follows:

    Authority: 26 U.S.C. 7805 * * *

                                       10
<PAGE>

                                   EXHIBIT J-2

                         FORM OF TRANSFEROR CERTIFICATE

                                                  __________ , 20    ___

Residential Funding Mortgage
  Securities II, Inc.
8400 Normandale Lake Boulevard
Suite 250
Minneapolis, MN 55437

JPMorgan Chase Bank
450 West 33rd Street
14th Floor
New York, NY 10001
Attention:  Institutional Trust Services/Structured Finance Services

               Re:    Home Equity Loan-Backed Certificates,
                      Series 2002-HS3, Class R-[__]

Ladies and Gentlemen:

        This letter is delivered to you in connection  with the transfer by (the
"Seller") to (the "Purchaser") of a [__]% Percentage Interest in the Home Equity
Loan-Backed  Certificates,  Series 2002-HS3,  Class R-[ ] (the  "Certificates"),
pursuant to Section 3.05 of the Trust Agreement (the "Trust  Agreement"),  dated
as of September 27, 2002 among  Residential  Asset Mortgage  Products,  Inc., as
seller (the  "Company"),  and Wilmington  Trust  Company,  as owner trustee (the
"Trustee").  All terms used  herein  and not  otherwise  defined  shall have the
meanings  set  forth  in the  Trust  Agreement.  The  Seller  hereby  certifies,
represents  and warrants  to, and  covenants  with,  the Company and the Trustee
that:

     1. No purpose of the Seller  relating to the transfer of the Certificate by
the Seller to the Purchaser is or will be to impede the assessment or collection
of any tax.

        2. The  Seller  understands  that the  Purchaser  has  delivered  to the
Trustee and the Master  Servicer a transfer  affidavit and agreement in the form
attached  to the Trust  Agreement  as Exhibit  J-1.  The Seller does not know or
believe that any representation contained therein is false.

        3. The Seller has at the time of the  transfer  conducted  a  reasonable
investigation  of the financial  condition of the Purchaser as  contemplated  by
Treasury  Regulations  Section  1.860E-1(c)(4)(i)  and,  as  a  result  of  that
investigation,  the Seller has  determined  that the Purchaser has  historically
paid its debts as they  become  due and has  found no  significant  evidence  to
indicate  that the  Purchaser  will not continue to pay its debts as they become
due in the future.  The Seller  understands  that the  transfer of a Class R-[ ]
Certificate  may not be respected for United States income tax purposes (and the
Seller may  continue  to be liable for United  States  income  taxes  associated
therewith) unless the Seller has conducted such an investigation.

                                       1
<PAGE>

     4. The Seller has no actual  knowledge that the proposed  Transferee is not
both a United States Person and a Permitted Transferee.

                                            Very truly yours,

                                    (Seller)

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

                                       2
<PAGE>EXECUTION COPY

                     GMACM HOME EQUITY LOAN TRUST 2002-HE3,

                                     Issuer,

                                       and

                        WELLS FARGO BANK MINNESOTA, N.A.,

                                Indenture Trustee

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

                                    INDENTURE

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

                           Dated as of August 28, 2002

                    GMACM HOME EQUITY LOAN-BACKED TERM NOTES

           GMACM HOME EQUITY LOAN-BACKED VARIABLE PAY REVOLVING NOTES

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

                                                                                          PAGE

<S>                                                                                        <C>
ARTICLE I  Definitions......................................................................2

Section 1.01      Definitions...............................................................2

Section 1.02      Incorporation by Reference of Trust Indenture Act.........................2

Section 1.03      Rules of Construction.....................................................2

ARTICLE II  Original Issuance Of Notes......................................................3

Section 2.01      Form......................................................................3

Section 2.02      Execution, Authentication and Delivery....................................3

Section 2.03      Advance or Additional Variable Pay Revolving Notes........................4

ARTICLE III  Covenants......................................................................5

Section 3.01      Collection of Payments with Respect to the Mortgage Loans.................5

Section 3.02      Maintenance of Office or Agency...........................................5

Section 3.03      Money for Payments to Be Held in Trust; Paying Agent......................5

Section 3.04      Existence.................................................................6

Section 3.05      Priority of Distributions; Defaulted Interest.............................7

Section 3.06      Protection of Trust Estate...............................................11

Section 3.07      Opinions as to Trust Estate..............................................12

Section 3.08      Performance of Obligations; Servicing Agreement..........................12

Section 3.09      Negative Covenants.......................................................13

Section 3.10      Annual Statement as to Compliance........................................13

Section 3.11      Recordation of Assignments...............................................13

Section 3.12      Representations and Warranties Concerning the Mortgage Loans.............13

Section 3.13      Assignee of Record of the Mortgage Loans.................................14

Section 3.14      Servicer as Agent and Bailee of the Indenture Trustee....................14

Section 3.15      Investment Company Act...................................................14

Section 3.16      Issuer May Consolidate, etc..............................................14

Section 3.17      Successor or Transferee..................................................16

Section 3.18      No Other Business........................................................16

Section 3.19      No Borrowing.............................................................16

<PAGE>

Section 3.20      Guarantees, Loans, Advances and Other Liabilities........................17

Section 3.21      Capital Expenditures.....................................................17

Section 3.22      Owner Trustee Not Liable for Certificates or Related Documents...........17

Section 3.23      Restricted Payments......................................................17

Section 3.24      Notice of Events of Default..............................................17

Section 3.25      Further Instruments and Acts.............................................18

Section 3.26      Statements to Noteholders................................................18

Section 3.27      Determination of Note Rate...............................................18

Section 3.28      Payments under the Policy................................................18

Section 3.29      Replacement Enhancement..................................................19

Section 3.30      Additional Representations of Issuer.....................................19

ARTICLE IV  The Notes; Satisfaction And Discharge Of Indenture.............................20

Section 4.01      The Notes; Variable Pay Revolving Notes..................................20

Section 4.02      Registration of and Limitations on Transfer and Exchange of Notes;
                  Appointment of Certificate Registrar.....................................21

Section 4.03      Mutilated, Destroyed, Lost or Stolen Notes...............................23

Section 4.04      Persons Deemed Owners....................................................24

Section 4.05      Cancellation.............................................................24

Section 4.06      Book-Entry Notes.........................................................25

Section 4.07      Notices to Depository....................................................25

Section 4.08      Definitive Notes.........................................................26

Section 4.09      Tax Treatment............................................................26

Section 4.10      Satisfaction and Discharge of Indenture..................................26

Section 4.11      Application of Trust Money...............................................27

Section 4.12      Subrogation and Cooperation..............................................28

Section 4.13      Repayment of Monies Held by Paying Agent.................................28

Section 4.14      Temporary Notes..........................................................29

ARTICLE V  Default And Remedies............................................................29

Section 5.01      Events of Default........................................................29

Section 5.02      Acceleration of Maturity; Rescission and Annulment.......................29

Section 5.03      Collection of Indebtedness and Suits for Enforcement by Indenture
                  Trustee..................................................................30

<PAGE>

Section 5.04      Remedies; Priorities.....................................................32

Section 5.05      Optional Preservation of the Trust Estate................................34

Section 5.06      Limitation of Suits......................................................34

Section 5.07      Unconditional Rights of Noteholders to Receive Principal and Interest....35

Section 5.08      Restoration of Rights and Remedies.......................................35

Section 5.09      Rights and Remedies Cumulative...........................................35

Section 5.10      Delay or Omission Not a Waiver...........................................36

Section 5.11      Control by Enhancer or Noteholders.......................................36

Section 5.12      Waiver of Past Defaults..................................................36

Section 5.13      Undertaking for Costs....................................................37

Section 5.14      Waiver of Stay or Extension Laws.........................................37

Section 5.15      Sale of Trust Estate.....................................................37

Section 5.16      Action on Notes..........................................................39

Section 5.17      Performance and Enforcement of Certain Obligations.......................39

ARTICLE VI  The Indenture Trustee..........................................................40

Section 6.01      Duties of Indenture Trustee..............................................40

Section 6.02      Rights of Indenture Trustee..............................................42

Section 6.03      Individual Rights of Indenture Trustee...................................43

Section 6.04      Indenture Trustee's Disclaimer...........................................43

Section 6.05      Notice of Event of Default...............................................43

Section 6.06      Reports by Indenture Trustee to Noteholders..............................43

Section 6.07      Compensation and Indemnity...............................................43

Section 6.08      Replacement of Indenture Trustee.........................................44

Section 6.09      Successor Indenture Trustee by Merger....................................45

Section 6.10      Appointment of Co-Indenture Trustee or Separate Indenture Trustee........45

Section 6.11      Eligibility; Disqualification............................................47

Section 6.12      Preferential Collection of Claims Against Issuer.........................47

Section 6.13      Representations and Warranties...........................................47

Section 6.14      Directions to Indenture Trustee..........................................48

Section 6.15      Indenture Trustee May Own Securities.....................................48

<PAGE>

ARTICLE VII  Noteholders' Lists and Reports................................................48

Section 7.01      Issuer to Furnish Indenture Trustee Names and Addresses of
                  Noteholders..............................................................48

Section 7.02      Preservation of Information; Communications to Noteholders...............48

Section 7.03      Reports by Issuer........................................................49

Section 7.04      Reports by Indenture Trustee.............................................49

ARTICLE VIII  Accounts, Disbursements and Releases.........................................49

Section 8.01      Collection of Money......................................................49

Section 8.02      Trust Accounts...........................................................49

Section 8.03      Officer's Certificate....................................................49

Section 8.04      Termination Upon Distribution to Noteholders.............................51

Section 8.05      Release of Trust Estate..................................................51

Section 8.06      Surrender of Notes Upon Final Payment....................................51

ARTICLE IX  Supplemental Indentures........................................................52

Section 9.01      Supplemental Indentures Without Consent of Noteholders...................52

Section 9.02      Supplemental Indentures With Consent of Noteholders......................53

Section 9.03      Execution of Supplemental Indentures.....................................54

Section 9.04      Effect of Supplemental Indenture.........................................55

Section 9.05      Conformity with Trust Indenture Act......................................55

Section 9.06      Reference in Notes to Supplemental Indentures............................55

ARTICLE X  Miscellaneous...................................................................55

Section 10.01     Compliance Certificates and Opinions, etc................................55

Section 10.02     Form of Documents Delivered to Indenture Trustee.........................57

Section 10.03     Acts of Noteholders......................................................58

Section 10.04     Notices, etc., to Indenture Trustee, Issuer, Enhancer and Rating
                  Agencies.................................................................58

Section 10.05     Notices to Noteholders; Waiver...........................................59

Section 10.06     Alternate Payment and Notice Provisions..................................60

Section 10.07     Conflict with Trust Indenture Act........................................60

Section 10.08     Effect of Headings.......................................................60

Section 10.09     Successors and Assigns...................................................60

<PAGE>

Section 10.10     Severability.............................................................60

Section 10.11     Benefits of Indenture....................................................60

Section 10.12     Legal Holidays...........................................................61

Section 10.13     GOVERNING LAW............................................................61

Section 10.14     Counterparts.............................................................61

Section 10.15     Recording of Indenture...................................................61

Section 10.16     Issuer Obligation........................................................61

Section 10.17     No Petition..............................................................61

Section 10.18     Inspection...............................................................62

</TABLE>

                                    EXHIBITS

Exhibit A-1    -      Form of Term Notes
Exhibit A-2    -      Form of Variable Pay Revolving Notes
Exhibit B      -      Form of 144A Investment Representation
Exhibit C      -      Form of Advance Request
Exhibit D             Form of Investor Representation Letter
Exhibit E             Form of Transferor Letter
Appendix A     -      Definitions

<PAGE>

        This  Indenture,  dated as of August 28,  2002,  is  between  GMACM Home
Equity Loan Trust 2002-HE3, a Delaware business trust, as issuer (the "Issuer"),
and Wells Fargo Bank  Minnesota,  N.A.,  as indenture  trustee  (the  "Indenture
Trustee").

                                   WITNESSETH:

        Each party  hereto  agrees as follows for the benefit of the other party
and for the equal and ratable  benefit of the Noteholders of the Issuer's Series
2002-HE3  GMACM  Home  Equity  Loan-Backed  Term  Notes  and GMACM  Home  Equity
Loan-Backed Variable Pay Revolving Notes (together, the "Notes").

                                       GRANTING CLAUSE:

        The Issuer hereby  Grants to the Indenture  Trustee on the Closing Date,
as trustee  for the  benefit of the  Noteholders  and the  Enhancer,  all of the
Issuer's  right,  title and  interest  in and to all  accounts,  chattel  paper,
general  intangibles,  contract  rights,  payment  intangibles,  certificates of
deposit,  deposit accounts,  instruments,  documents,  letters of credit, money,
advices of credit,  investment property, goods and other property consisting of,
arising under or related to whether now existing or hereafter  created in any of
the following:  (a) the Initial Mortgage Loans and any Subsequent Mortgage Loans
(together with the Cut-Off Date Principal  Balances and any Additional  Balances
arising  thereafter  to  and  including  the  date  immediately   preceding  the
commencement of the Rapid Amortization  Period), and all monies due or to become
due  thereunder;  (b) the Note  Payment  Account,  and all funds on  deposit  or
credited thereto from time to time and all proceeds thereof; (c) the Capitalized
Interest Account, and all funds on deposit or credited thereto from time to time
(other  than any income  thereon),  and the  Pre-Funding  Account,  the  Reserve
Sub-Account  and the  Funding  Account,  and all funds on  deposit  or  credited
thereto from time to time; (d) the Policy and all hazard insurance policies; and
(e) all  present  and  future  claims,  demands,  causes and choses in action in
respect of any or all of the  foregoing  and all  payments on or under,  and all
proceeds  of every kind and nature  whatsoever  in respect of, any or all of the
foregoing  and all  payments  on or under,  and all  proceeds  of every kind and
nature whatsoever in the conversion thereof, voluntary or involuntary, into cash
or other liquid  property,  all cash proceeds,  accounts,  accounts  receivable,
notes, drafts,  acceptances,  checks, deposit accounts, rights to payment of any
and every kind, and other forms of obligations and receivables,  instruments and
other  property  which at any time  constitute all or part of or are included in
the proceeds of any of the foregoing  (collectively,  the "Trust  Estate" or the
"Collateral").

        The foregoing  Grant is made in trust to secure the payment of principal
of and  interest  on,  and any other  amounts  owing in  respect  of, the Notes,
equally and ratably without  prejudice,  priority or distinction,  and to secure
compliance  with the  provisions  of this  Indenture,  all as  provided  in this
Indenture.

        The  foregoing  Grant  shall  inure to the  benefit of the  Enhancer  in
respect of draws made on the Policy and amounts owing from time to time pursuant
to the Insurance  Agreement  (regardless  of whether such amounts  relate to the
Notes or the  Certificates),  and such Grant  shall  continue  in full force and
effect for the benefit of the Enhancer  until all such amounts  owing to it have
been repaid in full.

                                       1
<PAGE>

        The  Indenture  Trustee,  as  trustee  on  behalf  of  the  Noteholders,
acknowledges  such Grant,  accepts the trust under this  Indenture in accordance
with the provisions hereof and agrees to perform its duties as Indenture Trustee
as required herein.

                                    ARTICLE I

                                   Definitions

        Section 1.01 Definitions.  For all purposes of this Indenture, except as
otherwise  expressly  provided herein or unless the context otherwise  requires,
capitalized  terms not otherwise defined herein shall have the meanings assigned
to such  terms in the  Definitions  attached  hereto  as  Appendix  A,  which is
incorporated by reference herein.  All other capitalized terms used herein shall
have the meanings specified herein.

        Section 1.02 Incorporation by Reference of Trust Indenture Act. Whenever
this  Indenture  refers to a provision of the Trust  Indenture  Act (the "TIA"),
such  provision  is  incorporated  by  reference  in and  made a  part  of  this
Indenture.  The  following TIA terms used in this  Indenture  have the following
meanings:

               "Commission" means the Securities and Exchange Commission.

               "indenture securities" means the Notes.

               "indenture security holder" means a Noteholder.

               "indenture to be qualified" means this Indenture.

     "indenture trustee" or "institutional trustee" means the Indenture Trustee.

     "obligor"  on the  indenture  securities  means  the  Issuer  and any other
obligor on the indenture securities.

               All other TIA terms used in this  Indenture  that are  defined by
TIA,  defined by TIA reference to another  statute or defined by Commission rule
have the meaning assigned to them by such definitions.

               Section 1.03 Rules of Construction.  Unless the context otherwise
          requires:

               (a)a term has the meaning assigned to it;

               (b)an  accounting  term not  otherwise  defined  has the  meaning
assigned to it in accordance with generally accepted accounting principles as in
effect from time to time;

               (c)"or" includes "and/or";

                                       2
<PAGE>

               (d)"including" means "including without limitation";

     (e)words in the singular include the plural and words in the plural include
the singular;

     (f)the term "proceeds" has the meaning ascribed thereto in the UCC; and

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

                                   ARTICLE II

                           Original Issuance of Notes

        Section 2.01 Form. The Term Notes and the Variable Pay Revolving  Notes,
in  each  case   together   with  the   Indenture   Trustee's   certificate   of
authentication,  shall be in  substantially  the forms set forth in Exhibits A-1
and  A-2,   respectively,   with   such   appropriate   insertions,   omissions,
substitutions  and  other  variations  as are  required  or  permitted  by  this
Indenture  and may have such letters,  numbers or other marks of  identification
and such legends or endorsements placed thereon as may,  consistently  herewith,
be  determined  by the  officers  executing  the Notes,  as  evidenced  by their
execution  thereof.  Any portion of the text of any Note may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of such Note.

        The Notes shall be  typewritten,  printed,  lithographed  or engraved or
produced  by  any  combination  of  these  methods,  all  as  determined  by the
Authorized  Officers  executing such Notes,  as evidenced by their  execution of
such Notes.

        The terms of the Notes set forth in Exhibits A-1 and A-2 are part of the
terms of this Indenture.

        Any  additional  Variable  Pay  Revolving  Note issued by the Issuer (in
accordance  with the  instruction  of the  Depositor)  after  the  Closing  Date
pursuant to Section 2.03 shall be issued in  accordance  with the  provisions of
this Indenture and shall be in substantially the form of Exhibit A-2.

        Section 2.02 Execution,  Authentication and Delivery. The Notes shall be
executed  on  behalf  of the  Issuer  by any of  its  Authorized  Officers.  The
signature  of any  such  Authorized  Officer  on the  Notes  may  be  manual  or
facsimile.

        Notes bearing the manual or facsimile  signature of individuals who were
at  any  time  Authorized   Officers  of  the  Issuer  shall  bind  the  Issuer,
notwithstanding  that such  individuals  or any of them have ceased to hold such
offices prior to the  authentication  and delivery of such Notes or did not hold
such offices at the date of such Notes.

                                       3
<PAGE>

        The Indenture Trustee shall upon Issuer Request authenticate and deliver
Term  Notes for  original  issue in an  aggregate  initial  principal  amount of
$540,206,000 and Variable Pay Revolving Notes for original issue in an aggregate
initial principal amount of $2,714,603. The Class A-1 Notes, the Class A-2 Notes
and the Class A-3 Notes shall have an initial  principal amount of $210,000,000,
$158,000,000 and $172,206,000, respectively.

        Each Note shall be dated the date of its authentication.  The Term Notes
shall be issuable as registered  Book-Entry Notes and the Variable Pay Revolving
Notes  shall be  issued as  Definitive  Notes,  and each of the  Notes  shall be
issuable in minimum denominations of $25,000 and integral multiples of $1,000 in
excess  thereof.  Each Class of the Variable Pay Revolving Notes shall be issued
as a single note.  Each Class of Variable Pay Revolving Note issued  pursuant to
Section  2.03  shall  be  issued  with an  initial  Note  Balance  equal  to the
outstanding  Note  Balance of the related  Class of Term Notes as of the related
Targeted Final Payment Date.

        No Note shall be  entitled  to any benefit  under this  Indenture  or be
valid or  obligatory  for any  purpose,  unless  there  appears  on such  Note a
certificate  of  authentication  substantially  in the form  provided for herein
executed  by  the  Indenture  Trustee  by  the  manual  signature  of one of its
authorized  signatories,  and such certificate upon any Note shall be conclusive
evidence, and the only evidence,  that such Note has been duly authenticated and
delivered hereunder.

        Section 2.03 Advance or  Additional  Variable Pay Revolving  Notes.  Not
later than ten (10)  Business Days prior to a Targeted  Final Payment Date,  the
Indenture  Trustee,  on  behalf of the  Issuer,  will  request  an  Advance  (in
substantially  the form attached  hereto as Exhibit C) from the Holder(s) of the
Variable Pay  Revolving  Notes in an aggregate  amount equal to the  outstanding
Note Balance of the related Class of Term Notes,  to be paid on the Business Day
prior to such  Targeted  Final  Payment  Date.  Within three (3)  Business  Days
thereafter,  each  Holder of a Variable  Pay  Revolving  Note  shall  notify the
Indenture  Trustee  in  writing  (as set forth in  Exhibit C) whether it (or the
Conduit  Purchaser or Committed  Purchasers  under the Note Purchase  Agreement)
will make such Advance,  subject to the continued satisfaction of the conditions
precedent  specified  in the Note  Purchase  Agreement.  If the  Holders  of the
Variable Pay Revolving Notes (or the Conduit  Purchaser or Committed  Purchasers
under the Note Purchase  Agreement)  indicate to the Indenture Trustee that they
will not make an Advance in the aggregate  amount equal to the outstanding  Note
Balance of the related Class of Term Notes,  the  Indenture  Trustee will notify
the  Depositor by close of business on the next Business Day. If no such Advance
will be made,  the  Depositor  may  direct  the  Issuer  to issue an  additional
Variable Pay Revolving Note in an amount equal to the related  outstanding Class
of Term Notes.  Upon receipt of such direction,  the Issuer shall issue and upon
receipt of an Issuer Order,  the  Indenture  Trustee  shall  authenticate,  such
additional Variable Pay Revolving Note in accordance with Sections 2.01 and 2.02
and Article IV. If such  additional  Variable Pay Revolving Note is issued,  the
Indenture  Trustee shall register such Variable Pay Revolving Note in accordance
with Article IV of this  Indenture and deliver such Variable Pay Revolving  Note
in accordance with the instructions of the Depositor.

        Notwithstanding  the  foregoing,  if an  Early  Amortization  Event  has
occurred and is continuing, an Insolvency Event with respect to the Enhancer has

                                       4
<PAGE>

occurred, any Class of Notes are rated below "AAA" or a Default has occurred and
is continuing,  the Indenture Trustee will not request an Advance and the Issuer
will not issue an additional Variable Pay Revolving Note.

                                   ARTICLE III

                                    Covenants

        Section 3.01  Collection of Payments with Respect to the Mortgage Loans.
The Indenture  Trustee shall establish and maintain with itself the Note Payment
Account  in which the  Indenture  Trustee  shall,  subject  to the terms of this
paragraph,  deposit,  on the same day as it is received from the Servicer,  each
remittance received by the Indenture Trustee with respect to the Mortgage Loans.
The  Indenture  Trustee  shall make all payments of principal of and interest on
the Notes,  subject to Section  3.03 as  provided  in Section  3.05  herein from
monies on deposit in the Note Payment Account.

        Section 3.02  Maintenance of Office or Agency.  The Issuer will maintain
in the City of  Minneapolis,  Minnesota,  an office or agency where,  subject to
satisfaction  of  conditions  set forth  herein,  Notes may be  surrendered  for
registration  of transfer or exchange,  and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served.  The Issuer
hereby  initially  appoints the Indenture  Trustee to serve as its agent for the
foregoing  purposes.  If at any time the Issuer  shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof,  such  surrenders,  notices  and  demands  may be made or served at the
Corporate Trust Office,  and the Issuer hereby appoints the Indenture Trustee as
its agent to receive all such surrenders, notices and demands.

        Section 3.03 Money for Payments to Be Held in Trust;  Paying  Agent.  As
provided in Section  3.01,  all payments of amounts due and payable with respect
to any Notes that are to be made from  amounts  withdrawn  from the Note Payment
Account  pursuant  to Section  3.01 shall be made on behalf of the Issuer by the
Indenture  Trustee or by the Paying Agent,  and no amounts so withdrawn from the
Note  Payment  Account  for  payments  of Notes shall be paid over to the Issuer
except as  provided  in this  Section  3.03.  The  Issuer  hereby  appoints  the
Indenture  Trustee to act as initial  Paying  Agent  hereunder.  The Issuer will
cause each Paying Agent other than the Indenture  Trustee to execute and deliver
to the  Indenture  Trustee an  instrument in which such Paying Agent shall agree
with the Indenture  Trustee (and if the Indenture  Trustee acts as Paying Agent,
it hereby so agrees),  subject to the provisions of this Section 3.03, that such
Paying Agent will:

               (a)hold  all sums held by it for the  payment of amounts due with
respect to the Notes in trust for the  benefit of the Persons  entitled  thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;

               (b)give the Indenture  Trustee and the Enhancer written notice of
any default by the Issuer of which it has actual  knowledge in the making of any
payment required to be made with respect to the Notes;

                                       5
<PAGE>

               (c)at any time during the  continuance of any such default,  upon
the written  request of the  Indenture  Trustee,  forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;

               (d)immediately  resign as Paying Agent and  forthwith  pay to the
Indenture  Trustee all sums held by it in trust for the payment of Notes,  if at
any time it ceases to meet the standards required to be met by a Paying Agent at
the time of its appointment;

               (e)comply with all  requirements  of the Code with respect to the
withholding  from  any  payments  made  by it on any  Notes  of  any  applicable
withholding  taxes imposed thereon and with respect to any applicable  reporting
requirements in connection therewith; and

               (f)deliver  to the  Indenture  Trustee a copy of the statement to
Noteholders  prepared with respect to each Payment Date by the Servicer pursuant
to Section 4.01 of the Servicing Agreement.

        The  Issuer  may  at  any  time,   for  the  purpose  of  obtaining  the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent,  such sums to be held by the Indenture  Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such  payment by any Paying  Agent to the  Indenture  Trustee,  such Paying
Agent shall be released from all further liability with respect to such money.

        Subject to applicable  laws with respect to escheat of funds,  any money
held by the  Indenture  Trustee or any Paying  Agent in trust for the payment of
any amount due with  respect to any Note and  remaining  unclaimed  for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer  Request;  and the  Noteholder  of such Note
shall thereafter,  as an unsecured general creditor, look only to the Issuer for
payment  thereof  (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture  Trustee or such Paying Agent with respect to
such trust money shall thereupon cease;  provided,  however,  that the Indenture
Trustee or such Paying Agent,  before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published  once, in
an  Authorized  Newspaper,  notice that such money  remains  unclaimed and that,
after a date  specified  therein,  which shall not be less than 30 days from the
date of such  publication,  any unclaimed  balance of such money then  remaining
will be repaid to the Issuer.  The Indenture  Trustee may also adopt and employ,
at the  expense  and  direction  of the Issuer,  any other  reasonable  means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Noteholders the Notes which have been called but have not been
surrendered  for  redemption  or whose  right to or  interest  in monies due and
payable  but not  claimed is  determinable  from the  records  of the  Indenture
Trustee  or of any  Paying  Agent,  at the last  address of record for each such
Noteholder).

        Section  3.04  Existence.  The  Issuer  will  keep  in full  effect  its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized  under the laws of any other state or of the United States of America,
in which case the Issuer  will keep in full  effect  its  existence,  rights and

                                       6
<PAGE>

franchises  under  the laws of such  other  jurisdiction)  and will  obtain  and
preserve its  qualification  to do business in each  jurisdiction  in which such
qualification   is  or  shall  be   necessary   to  protect  the   validity  and
enforceability  of this Indenture,  the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.

        Section 3.05  Priority of Distributions; Defaulted Interest.
                      ---------------------------------------------

               (a)In accordance with Section 3.03(a) of the Servicing Agreement,
the priority of  distributions  on each Payment Date from Principal  Collections
and  Interest  Collections  with  respect to the  Mortgage  Loans,  any optional
advance of delinquent  principal  and/or  interest on the Mortgage Loans made by
the Servicer in respect of the related Collection Period, any Policy Draw Amount
with  respect to Mortgage  Loans or the Notes  deposited  into the Note  Payment
Account (to be applied  solely with respect to the payment of amounts  described
in clauses (i), (ii),  (iii) and (vi) under paragraph (a) of this Section 3.05),
and any amounts  transferred  to the Note Payment  Account from the  Pre-Funding
Account,  the Funding  Account,  the  Capitalized  Interest  Account  and/or the
Reserve  Sub-Account  pursuant  to  Sections  3.17,  3.18,  3.19 and 3.20 of the
Servicing Agreement, is as follows:

                      (i)  from  Interest  Collections,   to  the  Note  Payment
        Account,  for  payment by the Paying  Agent to the  Noteholders  of each
        Class of Term Notes and the Variable Pay  Revolving  Notes,  pari passu,
        interest for the related Interest Period at the related Note Rate on the
        related Note Balance  immediately prior to such Payment Date,  including
        any Policy Draw Amount with respect to the Notes deposited into the Note
        Payment Account pursuant to Section 3.28(a)(ii),  excluding any Interest
        Shortfalls and any Relief Act Shortfalls  allocated  thereto pursuant to
        Section 3.05(f);

                      (ii) from Net  Principal  Collections,  to the  extent not
        paid from Interest Collections, to the Note Payment Account, for payment
        by the Paying Agent to the  Noteholders  of each Class of Term Notes and
        the Variable Pay Revolving Notes,  pari passu,  interest for the related
        Interest  Period at the related  Note Rate on the related  Note  Balance
        immediately prior to such Payment Date, including any Policy Draw Amount
        with  respect  to the  Notes  deposited  into the Note  Payment  Account
        pursuant to Section  3.28(a)(ii),  excluding any Interest Shortfalls and
        any Relief Act Shortfalls allocated thereto pursuant to Section 3.05(f);

                      (iii) during the Revolving Period, to the Funding Account,
        Principal  Collections to the extent not previously  applied to purchase
        Additional Balances or Subsequent Mortgage Loans;

                      (iv)  from  Interest  Collections,  to the  Enhancer,  the
        amount of the  premium  for the Policy and any  unpaid  premium  for the
        Policy, with interest thereon as provided in the Insurance Agreement;

                      (v) at the  request of the  holders  of the  Certificates,
        from Excess Spread, to the Distribution Account, for distribution to the
        holders of the Certificates,  an amount equal to the Additional  Balance
        Increase Amount;

                                       7
<PAGE>

                      (vi)  during the  Revolving  Period  and the  Amortization
        Periods, to the Note Payment Account, the Principal  Distribution Amount
        for  payment by the Paying  Agent to the  Noteholders  for each Class of
        Variable Pay Revolving  Notes,  pro rata, based on their respective Note
        Balances, including any amount on deposit in the Note Payment Account on
        such Payment Date  pursuant to Section  3.28(a)(iii),  provided that any
        distributions of the Principal  Distribution Amount during the Revolving
        Period shall be made to the Holders of the Variable Pay Revolving  Notes
        until the Note  Balances of the Variable Pay  Revolving  Notes have been
        reduced  to zero,  and then to the Term  Notes,  on a pro rata  basis in
        accordance with the respective Note Balances,  and any Liquidation  Loss
        Amounts  for any  Payment  Date  during the  Revolving  Period  shall be
        deposited in the Funding Account;

               (vii) to the  Enhancer,  to  reimburse it for prior draws made on
          the  Policy,  with  interest  thereon  as  provided  in the  Insurance
          Agreement;

                      (viii) on or prior to the Payment  Date  occurring  in May
        2003, any remaining  Excess Spread,  to the  Distribution  Account,  for
        distribution to the holders of the Certificates;

                      (ix) from any remaining Excess Spread during the Revolving
        Period, but only after the Payment Date occurring in May 2003, first, to
        the Note  Payment  Account  for  payment to each Class of  Variable  Pay
        Revolving Notes pro rata, based on their respective Note Balances, until
        the Note Balance  thereof has been reduced to zero and then as a deposit
        to the  Funding  Account,  the  amount  necessary  to be applied on that
        Payment  Date so that the  Overcollateralization  Amount,  after  giving
        effect to the application of funds pursuant to clause (vi) above, is not
        less than the Overcollateralization Target Amount;

                      (x)  from  any   remaining   Excess   Spread   during  the
        Amortization  Periods, to the Note Payment Account, the amount necessary
        to be applied on such  Payment  Date for payment by the Paying  Agent to
        the Noteholders, which amount will be paid to each Class of Variable Pay
        Revolving Notes,  pro rata, based on their respective Note Balances,  so
        that  the  Overcollateralization  Amount,  after  giving  effect  to the
        application of funds pursuant to clause (vi) above, is not less than the
        Overcollateralization Target Amount;

                      (xi)  from  any   remaining   Excess   Spread  during  the
        Amortization  Periods, to the Note Payment Account, any Liquidation Loss
        Amounts not otherwise covered by payments pursuant to clauses (vi), (ix)
        or (x) above on such Payment Date or prior Payment Dates, for payment by
        the  Paying  Agent to the  Noteholders  of each  Class of  Variable  Pay
        Revolving Notes, pro rata, based on their respective Note Balances;

               (xii) to the  Enhancer,  any other  amounts  owed to the Enhancer
          pursuant to the Insurance Agreement with respect to the Policy and the
          Notes;

                                       8
<PAGE>

                      (xiii)  to the Note  Payment  Account  from the  remaining
        Excess Spread,  for payment by the Paying Agent to the  Noteholders  any
        Interest  Shortfalls  on the  Notes  for such  Payment  Date and for any
        Payment Date not previously paid;

                      (xiv) during the  Amortization  Periods,  to the Indenture
        Trustee,  any amounts owing to the Indenture Trustee pursuant to Section
        6.07 to the extent remaining unpaid;

               (xv) to the  Reserve  Sub-Account,  the amount (if any)  required
          pursuant to Section 3.05(c); and

                      (xvi) any remaining amount,  to the Distribution  Account,
        for  distribution to the holders of the  Certificates by the Certificate
        Paying Agent in accordance with the Trust Agreement;

provided, that on the Final Payment Date, the amount that is required to be paid
pursuant  to clause (vi) above  shall be equal to the Note  Balance  immediately
prior to such Payment  Date and shall  include any amount on deposit in the Note
Payment Account on such Payment Date in accordance with Section 3.28(a)(iii).

        For purposes of the  foregoing,  the Note Balance of each Class of Notes
on each  Payment  Date during the  Amortization  Periods for such Class of Notes
will be reduced (any such reduction,  an "Unpaid  Principal  Amount") by the pro
rata portion  allocable to such Notes of all  Liquidation  Loss Amounts for such
Payment Date, but only to the extent that such  Liquidation Loss Amounts are not
otherwise  covered by payments made  pursuant to clauses (vi),  (ix, (x) or (xi)
above, or by a draw on the Policy, and the Overcollateralization Amount is zero.

               (b)  Notwithstanding  the  allocation  of payments  described  in
clause  (a)  above,  unless  an  Early  Amortization  Event  has  occurred,  all
Collections  on the Mortgage  Loans  payable as principal  distributions  on the
Variable Pay  Revolving  Notes during the  Amortization  Periods will be so paid
until the Note Balance of the Variable Pay  Revolving  Notes has been reduced to
zero and  thereafter,  will be deposited  into the Reserve  Sub-Account.  On the
first Payment Date  following the next Targeted  Final Payment Date,  amounts in
the Reserve  Sub-Account  will be deposited  into the Note  Payment  Account and
applied as principal payments on the Variable Pay Revolving Notes issued on that
previous Targeted Final Payment Date.

               Notwithstanding  the  allocation of payments  described in clause
(a) above,  if an Early  Amortization  Event has  occurred,  all  amounts in the
Reserve  Sub-Account  and all  Collections  on the  Mortgage  Loans  payable  as
principal  distributions on the Variable Pay Revolving Notes pursuant to Section
3.05(a)  will be paid on each  Payment  Date to the Holders of the  Variable Pay
Revolving Notes and the Term Notes on a pro rata basis, in accordance with their
respective Note Balances.

               (c) Within ten (10) Business Days of each Targeted  Final Payment
Date, the Indenture  Trustee,  on behalf of the Issuer,  will request an Advance
(under the  circumstances  and in the manner set forth in Section  2.03  hereof)
from the Holder of the Variable Pay Revolving Notes, the proceeds of which shall
be applied by the  Indenture  Trustee to make  principal  payments  in an amount
equal to the outstanding  Note Balance on the related Class of Term Notes on the
related Targeted Final Payment Date or, if received within 10 days following the
Targeted Final Payment Date,  promptly following receipt thereof.  If no Advance
is received,  the Issuer shall, at the direction of the Depositor,  may issue an

                                       9
<PAGE>

additional  Variable Pay Revolving Note. Neither the Advance,  nor proceeds from
the sale of an additional  Variable Pay Revolving  Note issued with respect to a
Targeted Final Payment Date, will exceed or be less than the amount necessary to
pay the  outstanding  Note  Balance on the  related  Class of Term Notes on such
Targeted Final Payment Date.  Advances may be made and  additional  Variable Pay
Revolving  Notes may be issued only in connection  with a Targeted Final Payment
Date and in  accordance  with  this  Indenture  and the Trust  Agreement.  If no
Advance is  received,  and the Trust fails to issue an  additional  Variable Pay
Revolving  Note on a Targeted  Final  Payment  Date,  an amount equal to 10 days
interest on the related Class of Term Notes shall be deposited  into the Reserve
Sub-Account  pursuant to Section  3.05(a)(xv) from amounts  otherwise payable to
Certificateholders.  Upon the  issuance  and sale by the Trust of an  additional
Variable  Pay  Revolving  Note within 10 days after the related  Targeted  Final
Payment  Date,  the amount of interest  deposited  into the Reserve  Sub-Account
pursuant  to Section  3.05(a)(xv)  shall be paid to the  Holders of the  related
Class of Term Notes,  together with the Note Balance of such Class, in an amount
equal to the  interest  accrued on such Class of Term Notes  through the date of
payment.

               (d) On each Payment  Date,  the Paying  Agent shall  apply,  from
amounts on deposit  in the Note  Payment  Account,  and in  accordance  with the
Servicing Certificate,  the amounts set forth above in the order of priority set
forth in Section 3.05(a).

               Amounts paid to Noteholders shall be paid in respect of the Notes
in  accordance  with the  applicable  percentage  as set forth in paragraph  (e)
below.  Interest on the Notes will be computed on the basis of the actual number
of days in each Interest  Period and a 360-day year. Any installment of interest
or principal payable on any Note that is punctually paid or duly provided for by
the Issuer on the  applicable  Payment Date shall be paid to the  Noteholder  of
record thereof on the immediately  preceding  Record Date by wire transfer to an
account specified in writing by such Noteholder  reasonably  satisfactory to the
Indenture Trustee,  or by check or money order mailed to such Noteholder at such
Noteholder's  address appearing in the Note Register,  the amount required to be
distributed   to  such   Noteholder  on  such  Payment  Date  pursuant  to  such
Noteholder's  Notes;  provided,  that the Indenture Trustee shall not pay to any
such  Noteholder  any amounts  required  to be  withheld  from a payment to such
Noteholder by the Code.

               (e)Principal of each Note shall be due and payable in full on the
Final  Payment  Date as  provided  in the  applicable  form of Note set forth in
Exhibits A-1 and A-2. All principal  payments on the Term Notes and Variable Pay
Revolving  Notes of each Class shall be made in accordance  with the  priorities
set  forth in  paragraphs  (a),  (b) and (c) above to the  Noteholders  entitled
thereto in accordance with the related Percentage Interests represented thereby.
Upon  written  notice to the  Indenture  Trustee by the  Issuer,  the  Indenture
Trustee shall notify the Person in the name of which a Note is registered at the
close of business on the Record Date  preceding the  applicable  Targeted  Final

                                       10
<PAGE>

Payment Date, the Final Payment Date or other final Payment Date, as applicable.
Such notice shall be mailed no later than five  Business Days prior to the Final
Payment Date or such other final  Payment  Date and,  unless such Note is then a
Book-Entry  Note,  shall  specify that payment of the  principal  amount and any
interest due with  respect to such Note at the Final  Payment Date or such other
final Payment Date will be payable only upon  presentation and surrender of such
Note,  and  shall  specify  the  place  where  such  Note may be  presented  and
surrendered for such final payment.

               On each Payment Date, the Overcollateralization  Amount available
to cover any Liquidation Loss Amounts on such Payment Date shall be deemed to be
reduced  by an amount  equal to such  Liquidation  Loss  Amounts  (except to the
extent that such Liquidation Loss Amounts were covered on such Payment Date by a
payment in respect of Liquidation Loss Amounts).

               (f) With respect to any Payment  Date,  interest  payments on the
Notes will be reduced by any Relief Act  Shortfalls  for the related  Collection
Period on a pro rata basis in accordance with the amount of interest  payable on
the Notes on such Payment Date, absent such reduction.

        Section 3.06  Protection of Trust Estate.
                      --------------------------

               (a)The  Issuer  shall from time to time  execute  and deliver all
such  supplements  and  amendments  hereto  and all such  financing  statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:

                      (i) maintain or preserve  the lien and  security  interest
        (and  the  priority  thereof)  of  this  Indenture  or  carry  out  more
        effectively the purposes hereof;

               (ii)  perfect,  publish  notice of or protect the validity of any
          Grant made or to be made by this Indenture;

               (iii) cause the Trust to enforce any of the Mortgage Loans; or

                      (iv) preserve and defend title to the Trust Estate and the
        rights of the Indenture Trustee and the Noteholders in such Trust Estate
        against the claims of all persons and parties.

               (b)Except as otherwise provided in this Indenture,  the Indenture
Trustee  shall not remove any portion of the Trust Estate that consists of money
or is  evidenced  by an  instrument,  certificate  or  other  writing  from  the
jurisdiction  in which it was held at the  date of the most  recent  Opinion  of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as  described  in the Opinion of Counsel  delivered at the Closing Date
pursuant  to Section  3.07,  if no Opinion  of  Counsel  has yet been  delivered
pursuant to Section 3.07) unless the Indenture Trustee shall have first received
an Opinion of Counsel to the effect that the lien and security  interest created
by this  Indenture  with respect to such property will continue to be maintained
after giving effect to such action or actions.

                                       11
<PAGE>

        The  Issuer  hereby  designates  the  Indenture  Trustee  its  agent and
attorney-in-fact to execute any financing statement,  continuation  statement or
other instrument required to be executed pursuant to this Section 3.06.

        Section 3.07  Opinions as to Trust Estate.
                      ---------------------------

        On the Closing Date,  the Issuer shall furnish to the Indenture  Trustee
and the Owner Trustee an Opinion of Counsel at the expense of the Issuer stating
that,  upon  delivery of the Loan  Agreements  relating to the Initial  Mortgage
Loans to the Indenture  Trustee or the  Custodian in the State of  Pennsylvania,
the Indenture Trustee will have a perfected, first priority security interest in
such Mortgage Loans.

        On or before December 31st in each calendar year, beginning in 2002, the
Issuer  shall  furnish  to the  Indenture  Trustee  an Opinion of Counsel at the
expense of the Issuer either  stating  that, in the opinion of such counsel,  no
further  action is necessary to maintain a perfected,  first  priority  security
interest in the Mortgage Loans until December 31 in the following  calendar year
or, if any such action is required to  maintain  such  security  interest in the
Mortgage  Loans,  such Opinion of Counsel  shall also  describe  the  recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other  requisite  documents  and the  execution and filing of any
financing  statements and  continuation  statements that will, in the opinion of
such  counsel,  be required to maintain  the  security  interest in the Mortgage
Loans until December 31 in the following calendar year.

        Section 3.08  Performance of Obligations; Servicing Agreement.
                      -----------------------------------------------

               (a)The  Issuer  shall  punctually  perform and observe all of its
obligations and agreements contained in this Indenture,  the Basic Documents and
in the instruments and agreements included in the Trust Estate.

               (b)The  Issuer may  contract  with other  Persons to assist it in
performing its duties under this  Indenture,  and any performance of such duties
by a Person identified to the Indenture  Trustee in an Officer's  Certificate of
the Issuer shall be deemed to be action taken by the Issuer.

               (c)The  Issuer  shall not take any action or permit any action to
be taken by others  that  would  release  any Person  from any of such  Person's
covenants or  obligations  under any of the  documents  relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or that would result
in the amendment, hypothecation,  subordination, termination or discharge of, or
impair the validity or  effectiveness  of, any of the documents  relating to the
Mortgage  Loans or any such  instrument,  except such actions as the Servicer is
expressly permitted to take in the Servicing Agreement.

               (d)The  Issuer  may  retain an  administrator  and may enter into
contracts  with other Persons for the  performance  of the Issuer's  obligations
hereunder,  and performance of such  obligations by such Persons shall be deemed
to be performance of such obligations by the Issuer.

                                       12
<PAGE>

     Section 3.09 Negative Covenants. So long as any Notes are Outstanding,  the
Issuer shall not:

               (a)except  as  expressly  permitted  by  this  Indenture,   sell,
transfer,  exchange or otherwise dispose of the Trust Estate, unless directed to
do so by the Indenture Trustee pursuant to Section 5.04 hereof;

               (b)claim any credit on, or make any deduction  from the principal
or  interest  payable in respect  of, the Notes  (other  than  amounts  properly
withheld  from such  payments  under the Code) or assert any claim  against  any
present or former  Noteholder  by reason of the  payment of the taxes  levied or
assessed upon any part of the Trust Estate;

               (c)(i) permit the validity or  effectiveness of this Indenture to
be impaired,  or permit the lien of this Indenture to be amended,  hypothecated,
subordinated, terminated or discharged, or permit any Person to be released from
any  covenants or  obligations  with  respect to the Notes under this  Indenture
except as may be  expressly  permitted  hereby,  (ii)  permit any lien,  charge,
excise, claim, security interest,  mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden  the Trust  Estate or any part  thereof  or any  interest  therein or the
proceeds  thereof or (iii) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate; or

               (d)impair or cause to be impaired  the  Issuer's  interest in the
Mortgage Loans,  the Purchase  Agreement or in any other Basic Document,  if any
such  action  would  materially  and  adversely  affect  the  interests  of  the
Noteholders.

        Section 3.10 Annual Statement as to Compliance. The Issuer shall deliver
to the Indenture  Trustee,  within 120 days after the end of each fiscal year of
the Issuer  (commencing  with the fiscal year ending on December 31,  2002),  an
Officer's  Certificate  stating,  as to  the  Authorized  Officer  signing  such
Officer's Certificate, that:

               (a)a review of the  activities of the Issuer during such year and
of its  performance  under this Indenture and the Trust  Agreement has been made
under such Authorized Officer's supervision; and

               (b)to the best of such Authorized Officer's  knowledge,  based on
such review,  the Issuer has complied with all  conditions  and covenants  under
this Indenture and the provisions of the Trust  Agreement  throughout such year,
or, if there has been a default in its  compliance  with any such  condition  or
covenant,  specifying each such default known to such Authorized Officer and the
nature and status thereof.

        Section 3.11  Recordation of  Assignments.  The Issuer shall enforce the
obligation,  if any, of the Sellers  under the  Purchase  Agreement to submit or
cause to be submitted for  recordation  all  Assignments of Mortgages  within 60
days of receipt of recording information by the Servicer.

        Section 3.12  Representations  and  Warranties  Concerning  the Mortgage

                                       13
<PAGE>

Loans. The Indenture  Trustee,  as pledgee of the Mortgage Loans, shall have the
benefit of the  representations  and warranties  made by GMACM in Section 3.1(a)
and  Section   3.1(b)  of  the  Purchase   Agreement  and  the  benefit  of  the
representations  and  warranties  made by WG  Trust  in  Section  3.1(c)  of the
Purchase  Agreement,  concerning the Mortgage Loans and the right to enforce the
remedies  against  GMACM or WG Trust  provided  in Section  3.1(d),  to the same
extent as though such  representations  and warranties were made directly to the
Indenture Trustee.

        Section 3.13 Assignee of Record of the Mortgage Loans. As pledgee of the
Mortgage Loans, the Indenture  Trustee shall hold title to the Mortgage Loans by
being named as payee in the  endorsements  or assignments of the Loan Agreements
and assignee in the Assignments of Mortgage to be delivered under Section 2.1 of
the Purchase  Agreement.  Except as expressly provided in the Purchase Agreement
or in the Servicing  Agreement  with respect to any specific  Mortgage Loan, the
Indenture  Trustee shall not execute any  endorsement or assignment or otherwise
release or transfer  such title to any of the Mortgage  Loans until such time as
the  remaining  Trust Estate may be released  pursuant to Section  8.05(b).  The
Indenture  Trustee's  holding of such title shall in all  respects be subject to
its fiduciary obligations to the Noteholders hereunder.

        Section  3.14  Servicer  as Agent and Bailee of the  Indenture  Trustee.
Solely for purposes of  perfection  under  Section  9-313 or 9-314 of the UCC or
other  similar  applicable  law,  rule or  regulation of the state in which such
property is held by the Servicer,  the Issuer and the Indenture  Trustee  hereby
acknowledge  that the  Servicer  is acting as agent and bailee of the  Indenture
Trustee in holding  amounts on deposit  in the  Custodial  Account  pursuant  to
Section  3.02 of the  Servicing  Agreement  that are  allocable  to the Mortgage
Loans,  as well as the agent and bailee of the Indenture  Trustee in holding any
Related  Documents  released to the Servicer  pursuant to Section 3.06(c) of the
Servicing Agreement, and any other items constituting a part of the Trust Estate
which from time to time come into the possession of the Servicer. It is intended
that, by the  Servicer's  acceptance of such agency  pursuant to Section 3.02 of
the Servicing  Agreement,  the Indenture  Trustee,  as a pledgee of the Mortgage
Loans, will be deemed to have possession of such Related Documents,  such monies
and such other items for  purposes  of Section  9-313 or 9-314 of the UCC of the
state in which such property is held by the Servicer.

        Section  3.15  Investment  Company  Act.  The Issuer shall not become an
"investment  company" or under the "control" of an "investment  company" as such
terms are  defined in the  Investment  Company  Act of 1940,  as amended (or any
successor  or  amendatory  statute),  and the rules and  regulations  thereunder
(taking into  account not only the general  definition  of the term  "investment
company"  but  also  any  available  exceptions  to  such  general  definition);
provided, however, that the Issuer shall be in compliance with this Section 3.15
if  it  shall  have  obtained  an  order  exempting  it  from  regulation  as an
"investment  company" so long as it is in compliance with the conditions imposed
in such order.

        Section 3.16  Issuer May Consolidate, etc.

               (a)The  Issuer  shall not  consolidate  or merge with or into any
other Person, unless:

                                       14
<PAGE>

                      (i) the  Person (if other  than the  Issuer)  formed by or
        surviving such  consolidation  or merger shall be a Person organized and
        existing  under the laws of the United States of America or any state or
        the District of Columbia  and shall  expressly  assume,  by an indenture
        supplemental hereto, executed and delivered to the Indenture Trustee, in
        form  reasonably  satisfactory  to the  Indenture  Trustee,  the due and
        punctual  payment of the  principal  of and interest on all Notes and to
        the Certificate  Paying Agent, on behalf of the  Certificateholders  and
        the  performance  or observance of every  agreement and covenant of this
        Indenture on the part of the Issuer to be performed or observed,  all as
        provided herein;

               (ii)  immediately  after giving  effect to such  transaction,  no
          Event of Default shall have occurred and be continuing;

                      (iii) the Enhancer shall have  consented  thereto and each
        Rating Agency shall have notified the Issuer that such  transaction will
        not cause a Rating Event, without taking into account the Policy;

                      (iv) the Issuer shall have  received an Opinion of Counsel
        (and shall have delivered  copies  thereof to the Indenture  Trustee and
        the  Enhancer)  to the effect  that such  transaction  will not have any
        material  adverse tax  consequence to the Issuer,  any Noteholder or any
        Certificateholder;

                      (v) any action that is  necessary to maintain the lien and
        security interest created by this Indenture shall have been taken; and

                      (vi) the Issuer  shall  have  delivered  to the  Indenture
        Trustee an Officer's  Certificate and an Opinion of Counsel each stating
        that such consolidation or merger and such supplemental indenture comply
        with this Article III and that all conditions  precedent herein provided
        for relating to such  transaction have been complied with (including any
        filing required by the Exchange Act).

               (b)The Issuer shall not convey or transfer any of its  properties
or assets, including those included in the Trust Estate, to any Person, unless:

                      (i) the Person that acquires by conveyance or transfer the
        properties  and assets of the Issuer the conveyance or transfer of which
        is hereby  restricted  shall (A) be a United States  citizen or a Person
        organized and existing under the laws of the United States of America or
        any state, (B) expressly assumes, by an indenture  supplemental  hereto,
        executed and delivered to the Indenture Trustee, in form satisfactory to
        the Indenture Trustee,  the due and punctual payment of the principal of
        and interest on all Notes and the  performance  or  observance  of every
        agreement and covenant of this Indenture on the part of the Issuer to be
        performed or observed,  all as provided herein,  (C) expressly agrees by

                                       15
<PAGE>

        means of such supplemental  indenture that all right, title and interest
        so  conveyed or  transferred  shall be subject  and  subordinate  to the
        rights of Noteholders  of the Notes,  (D) unless  otherwise  provided in
        such supplemental indenture,  expressly agrees to indemnify,  defend and
        hold harmless the Issuer against and from any loss, liability or expense
        arising  under  or  related  to this  Indenture  and the  Notes  and (E)
        expressly  agrees  by means of such  supplemental  indenture  that  such
        Person (or if a group of Persons,  then one specified Person) shall make
        all  filings  with the  Commission  (and any other  appropriate  Person)
        required by the Exchange Act in connection with the Notes;

                      (ii) immediately  after giving effect to such transaction,
        no Default or Event of Default shall have occurred and be continuing;

                      (iii) the Enhancer shall have consented thereto,  and each
        Rating Agency shall have notified the Issuer that such  transaction will
        not cause a Rating Event, if determined without regard to the Policy;

                      (iv) the Issuer shall have  received an Opinion of Counsel
        (and shall have delivered  copies  thereof to the Indenture  Trustee) to
        the effect that such  transaction will not have any material adverse tax
        consequence to the Issuer or any Noteholder;

                      (v) any action that is  necessary to maintain the lien and
        security interest created by this Indenture shall have been taken; and

                      (vi) the Issuer  shall  have  delivered  to the  Indenture
        Trustee an Officer's  Certificate and an Opinion of Counsel each stating
        that such conveyance or transfer and such supplemental  indenture comply
        with this Article III and that all conditions  precedent herein provided
        for relating to such  transaction have been complied with (including any
        filing required by the Exchange Act).

        Section 3.17  Successor or Transferee.
                      -----------------------

               (a)Upon any  consolidation  or merger of the Issuer in accordance
with Section  3.16(a),  the Person formed by or surviving such  consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted  for, and
may exercise  every right and power of, the Issuer under this Indenture with the
same effect as if such Person had been named as the Issuer herein.

               (b)Upon a conveyance or transfer of all the assets and properties
of the Issuer  pursuant to Section  3.16(b),  the Issuer shall be released  from
every  covenant and  agreement of this  Indenture to be observed or performed on
the part of the Issuer with respect to the Notes  immediately  upon the delivery
of written notice to the Indenture Trustee of such conveyance or transfer.

        Section  3.18 No Other  Business.  The  Issuer  shall not  engage in any
business other than financing,  purchasing,  owning and selling and managing the
Mortgage  Loans and the  issuance  of the Notes and  Certificates  in the manner
contemplated  by this  Indenture  and the  Basic  Documents  and all  activities
incidental thereto.

        Section 3.19 No Borrowing.  The Issuer shall not issue,  incur,  assume,
guarantee  or  otherwise  become  liable,   directly  or  indirectly,   for  any
indebtedness except for the Notes.

                                       16
<PAGE>

        Section 3.20 Guarantees,  Loans, Advances and Other Liabilities.  Except
as contemplated by this Indenture or the other Basic Documents, the Issuer shall
not make any loan or advance or credit to, or guarantee  (directly or indirectly
or by  an  instrument  having  the  effect  of  assuring  another's  payment  or
performance on any  obligation or capability of so doing or otherwise),  endorse
or otherwise become contingently liable,  directly or indirectly,  in connection
with the obligations,  stocks or dividends of, or own,  purchase,  repurchase or
acquire  (or agree  contingently  to do so) any  stock,  obligations,  assets or
securities  of, or any other interest in, or make any capital  contribution  to,
any other Person.

        Section  3.21  Capital  Expenditures.  The  Issuer  shall  not  make any
expenditure  (by long-term or operating  lease or otherwise)  for capital assets
(either realty or personalty).

        Section  3.22  Owner  Trustee  Not Liable  for  Certificates  or Related
Documents. The recitals contained herein shall be taken as the statements of the
Issuer, and the Owner Trustee and the Indenture Trustee assume no responsibility
for the correctness of the recitals  contained herein. The Owner Trustee and the
Indenture Trustee make no  representations  as to the validity or sufficiency of
this Indenture or any other Basic Document,  of the Certificates (other than the
signatures of the Owner Trustee or the Indenture Trustee on the Certificates) or
the Notes,  or of any Related  Documents.  The Owner  Trustee and the  Indenture
Trustee shall at no time have any  responsibility  or liability  with respect to
the  sufficiency  of the Trust Estate or its ability to generate the payments to
be  distributed  to   Certificateholders   under  the  Trust  Agreement  or  the
Noteholders under this Indenture,  including, the compliance by the Depositor or
the Sellers with any warranty or representation made under any Basic Document or
in any related document or the accuracy of any such warranty or  representation,
or any action of the Certificate Paying Agent, the Certificate  Registrar or any
other person taken in the name of the Owner Trustee or the Indenture Trustee.

        Section 3.23  Restricted  Payments.  The Issuer  shall not,  directly or
indirectly,  (i) pay any  dividend or make any  distribution  (by  reduction  of
capital or otherwise),  whether in cash,  property,  securities or a combination
thereof,  to the Owner  Trustee  or any owner of a  beneficial  interest  in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer,  (ii) redeem,  purchase,  retire or  otherwise  acquire for
value any such  ownership  or equity  interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose;  provided,  however,  that
the Issuer may make, or cause to be made, (x) distributions to the Owner Trustee
and the  Certificateholders  as  contemplated  by, and to the  extent  funds are
available for such purpose  under,  the Trust  Agreement and (y) payments to the
Servicer pursuant to the terms of the Servicing Agreement.  The Issuer will not,
directly or  indirectly,  make payments to or  distributions  from the Custodial
Account except in accordance with this Indenture and the other Basic Documents.

        Section  3.24  Notice of Events of  Default.  The Issuer  shall give the
Indenture Trustee, the Enhancer and the Rating Agencies prompt written notice of
each Event of Default hereunder and under the Trust Agreement.

                                       17
<PAGE>

        Section 3.25 Further Instruments and Acts. Upon request of the Indenture
Trustee,  the Issuer shall execute and deliver such further  instruments  and do
such  further  acts as may be  reasonably  necessary or proper to carry out more
effectively the purposes of this Indenture.

        Section 3.26  Statements to  Noteholders.  On each Payment Date, each of
the Indenture Trustee and the Certificate  Registrar shall make available to the
Depositor,  the Owner  Trustee,  each Rating  Agency,  each  Noteholder and each
Certificateholder,  with  a copy  to the  Enhancer,  the  Servicing  Certificate
provided to the Indenture  Trustee by the Servicer relating to such Payment Date
and delivered pursuant to Section 4.01 of the Servicing Agreement.

        The Indenture  Trustee will make the Servicing  Certificate (and, at its
option,  any additional  files containing the same information in an alternative
format)  available  each month to  Securityholders  and the Enhancer,  and other
parties to this  Indenture via the Indenture  Trustee's  internet  website.  The
Indenture   Trustee's   internet   website   shall   initially   be  located  at
"www.ctslink.com".  Assistance  in using the  website can be obtained by calling
the Indenture  Trustee's  customer service desk at (301) 815-6600.  Parties that
are unable to use the above  distribution  options are  entitled to have a paper
copy mailed to them via first class mail by calling the  customer  service  desk
and indicating  such.  The Indenture  Trustee shall have the right to change the
way the  statement  to  Securityholders  are  distributed  in order to make such
distribution more convenient and/or more accessible to the above parties and the
Indenture  Trustee shall provide timely and adequate  notification  to all above
parties   regarding  any  such  changes.   The  Indenture  Trustee  may  require
registration  and acceptance of a disclaimer in connection with providing access
to its website.

        Section 3.27  Determination  of Note Rate. On the second LIBOR  Business
Day immediately preceding (i) the Closing Date in the case of the first Interest
Period and (ii) the first day of each succeeding  Interest Period, the Indenture
Trustee shall  determine  LIBOR and the  applicable  Note Rate for such Interest
Period and shall inform the Issuer,  the Servicer and the  Depositor by means of
the Indenture Trustee's online service.

        Section 3.28 Payments under the Policy.

               (a)(i)  If the  Servicing  Certificate  specifies  a Policy  Draw
Amount for any Payment  Date,  the  Indenture  Trustee  shall make a draw on the
Policy in an amount specified in the Servicing Certificate for such Payment Date
or, if no amount is specified,  the  Indenture  Trustee shall make a draw on the
Policy in the amount by which the amount on deposit in the Note Payment  Account
is less than interest due on the Notes on such Payment Date.

               (ii) The Indenture Trustee shall deposit or cause to be deposited
such Policy Draw Amount into the Note  Payment  Account on such  Payment Date to
the extent such amount  relates to clause (a) of the  definition of  "Deficiency
Amount" or clause (b) of the definition of "Insured Amount".

               (iii) To the  extent  such  amount  relates  to clause (b) of the
definition of "Deficiency  Amount",  the Indenture  Trustee shall (i) during the
Revolving  Period,  deposit  such amount into the Funding  Account as  Principal
Collections and (ii) during the Amortization  Periods,  deposit such amount into
the Note Payment Account.

                                       18
<PAGE>

               (b)The Indenture Trustee shall submit, if a Policy Draw Amount is
specified in any statement to Securityholders  prepared pursuant to Section 4.01
of the Servicing Agreement, the Notice (in the form attached as Exhibit A to the
Policy) to the  Enhancer  no later than 12:00 noon,  New York City time,  on the
second (2nd) Business Day prior to the applicable Payment Date.

        Section 3.29 Replacement Enhancement. The Issuer (or the Servicer on its
behalf) may, at its expense,  in accordance  with and upon  satisfaction  of the
conditions set forth herein, but shall not be required to, obtain a surety bond,
letter of credit,  guaranty  or reserve  account as a Permitted  Investment  for
amounts on deposit in the Capitalized  Interest Account,  or may arrange for any
other form of additional credit enhancement;  provided,  that after prior notice
thereto,  no Rating  Agency  shall have  informed the Issuer that a Rating Event
would occur as a result thereof  (without  taking the Policy into account);  and
provided  further,  that the issuer of any such  instrument  or facility and the
timing  and  mechanism  for  drawing  on such  additional  enhancement  shall be
acceptable to the Indenture Trustee and the Enhancer. It shall be a condition to
procurement of any such additional credit enhancement that there be delivered to
the Indenture Trustee and the Enhancer (a) an Opinion of Counsel,  acceptable in
form to the Indenture Trustee and the Enhancer,  from counsel to the provider of
such additional credit  enhancement with respect to the  enforceability  thereof
and such other matters as the Indenture  Trustee or the Enhancer may require and
(b) an Opinion of Counsel to the effect that the  procurement of such additional
enhancement  would not (i)  adversely  affect in any  material  respect  the tax
status of the Notes or the  Certificates  or (ii) cause the Issuer to be taxable
as an  association  (or a publicly  traded  partnership)  for federal income tax
purposes or to be  classified  as a taxable  mortgage pool within the meaning of
Section 7701(i) of the Code.

        Section 3.30  Additional Representations of Issuer.
                      ------------------------------------

        The Issuer hereby  represents and warrants to the Indenture Trustee that
as of the Closing Date:

(a)        This Indenture  creates a valid and continuing  security interest (as
           defined in the applicable  UCC) in the Mortgage Notes in favor of the
           Indenture  Trustee,  which  security  interest  is prior to all other
           Liens (except as expressly  permitted  otherwise in this  Indenture),
           and is  enforceable  as such as against  creditors of and  purchasers
           from the Issuer.

(b)  The  Mortgage  Notes  constitute  "instruments"  within the  meaning of the
     applicable UCC.

(c)  The Issuer owns and has good and  marketable  title to the  Mortgage  Notes
     free and clear of any Lien of any Person.

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<PAGE>

(d)        The original  executed  copy of each Loan  Agreement  (except for any
           Loan  Agreement  with respect to which a Lost Note Affidavit has been
           delivered to the Custodian) has been delivered to the Custodian.

(e)        The Issuer has received a written  acknowledgment  from the Custodian
           that the Custodian is acting solely as agent of the Indenture Trustee
           for the benefit of the Noteholders.

(f)  Other than the security  interest granted to the Indenture Trustee pursuant
     to this Indenture,  the Issuer has not pledged,  assigned,  sold, granted a
     security interest in, or otherwise  conveyed any of the Mortgage Notes. The
     Issuer has not  authorized  the filing of and is not aware of any financing
     statements  against the Issuer that  include a  description  of  collateral
     covering the Mortgage Notes other than any financing  statement relating to
     the security  interest  granted to the Indenture  Trustee  hereunder or any
     security interest that has been terminated.  The Issuer is not aware of any
     judgment or tax lien filings against the Issuer.

(g)  None of the Mortgage Notes has any marks or notations  indicating that they
     have been pledged,  assigned or otherwise conveyed to any Person other than
     the Indenture  Trustee,  except for (i) any endorsements that are part of a
     complete chain of endorsements  from the originator of the Mortgage Note to
     the Indenture Trustee,  and (ii) any marks or notations pertaining to Liens
     that have been terminated or released.

                                   ARTICLE IV

                      The Notes; Satisfaction And Discharge Of Indenture

        Section 4.01  The Notes; Variable Pay Revolving Notes.
                      ---------------------------------------

               (a) The Term Notes shall be  registered  in the name of a nominee
designated by the Depository.  Beneficial Owners will hold interests in the Term
Notes through the  book-entry  facilities of the  Depository in minimum  initial
Term  Note  Balances  of  $25,000  and  integral  multiples  of $1,000 in excess
thereof.

        The  Indenture  Trustee may for all  purposes  (including  the making of
payments  due  on  the  Notes)  deal  with  the  Depository  as  the  authorized
representative  of the Beneficial  Owners with respect to the Term Notes for the
purposes of exercising the rights of Noteholders of Term Notes hereunder. Except
as provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial  Owners  with  respect  to the Term  Notes  shall be limited to those
established  by law  and  agreements  between  such  Beneficial  Owners  and the
Depository  and  Depository  Participants.  Except as provided in Section  4.08,
Beneficial Owners shall not be entitled to definitive  certificates for the Term
Notes as to which they are the Beneficial Owners.  Requests and directions from,
and votes of, the Depository as Noteholder of the Term Notes shall not be deemed
inconsistent if they are made with respect to different  Beneficial  Owners. The
Indenture  Trustee may  establish a reasonable  record date in  connection  with

                                       20
<PAGE>

solicitations  of consents from or voting by Noteholders  and give notice to the
Depository  of such  record  date.  Without  the  consent  of the Issuer and the
Indenture Trustee, no Term Note may be transferred by the Depository except to a
successor  Depository  that  agrees  to hold such  Note for the  account  of the
Beneficial Owners.

        In the event the  Depository  Trust  Company  resigns  or is  removed as
Depository,  the Indenture Trustee,  at the request of the Servicer and with the
approval  of the Issuer may  appoint a  successor  Depository.  If no  successor
Depository  has  been  appointed  within  30 days of the  effective  date of the
Depository's  resignation or removal, each Beneficial Owner shall be entitled to
certificates   representing  the  Notes  it  beneficially  owns  in  the  manner
prescribed in Section 4.08.

        The Notes shall,  on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner Trustee
and upon Issuer Order,  authenticated by the Note Registrar and delivered by the
Indenture Trustee to or upon the order of the Issuer.

               (b) The  Variable Pay  Revolving  Note issued on the Closing Date
shall be issued in definitive form and shall bear the  Designation  "VPRN 1" and
each new Variable Pay Revolving Note will be issued in definitive form and shall
bear sequential numerical designations in the order of their issuance.  Each new
Variable  Pay  Revolving  Note issued after the Closing Date shall be a separate
Class of Variable Pay Revolving Notes.

        Section 4.02 Registration of and Limitations on Transfer and Exchange of
Notes;  Appointment of Certificate Registrar.  The Issuer shall cause to be kept
at the  Indenture  Trustee's  Corporate  Trust Office a Note  Register in which,
subject to such reasonable  regulations as it may prescribe,  the Note Registrar
shall  provide for the  registration  of Notes and of transfers and exchanges of
Notes as herein  provided.  The Issuer hereby appoints the Indenture  Trustee as
the initial Note Registrar.

        Subject  to the  restrictions  and  limitations  set forth  below,  upon
surrender  for  registration  of  transfer  of any Note at the  Corporate  Trust
Office, the Issuer shall execute,  and the Note Registrar shall authenticate and
deliver,  in the name of the designated  transferee or transferees,  one or more
new Notes in authorized  initial Note  Balances  evidencing  the same  aggregate
Percentage Interests.

        No  transfer,  sale,  pledge  or other  disposition  of a  Variable  Pay
Revolving  Note  shall be made  unless  such  transfer,  sale,  pledge  or other
disposition is exempt from the registration  requirements of the Securities Act,
and any applicable  state securities laws or is made in accordance with said Act
and laws. In the event of any such transfer, the Indenture Trustee or the Issuer
shall  require  the  transferee  to either (i) execute an  investment  letter in
substantially  the  form  attached  hereto  as  Exhibit  B (or in such  form and
substance reasonably satisfactory to the Indenture Trustee and the Issuer) which
investment  letters shall not be an expense of the Owner Trustee,  the Indenture
Trustee,  the Servicer,  the Depositor or the Issuer and which investment letter
states  that,   among  other  things,   such  transferee  (a)  is  a  "qualified
institutional  buyer" as defined under Rule 144A,  acting for its own account or

                                       21
<PAGE>

the accounts of other  "qualified  institutional  buyers" as defined  under Rule
144A,  and (b) is aware  that the  proposed  transferor  intends  to rely on the
exemption from registration  requirements  under the Securities Act, provided by
Rule  144A or (ii)  deliver  to the  Indenture  Trustee  and the  Issuer  (a) an
investment  letter  executed  by the  transferee  in  substantially  the form of
Exhibit  D,  (b)  a   representation   letter  executed  by  the  transferor  in
substantially  the form of Exhibit E and (c) an opinion of counsel to the effect
that such transfer is not required to be registered under the Securities Act and
the facts  surrounding the transfer do not create a security that is required to
be registered under the Securities Act, in each case,  acceptable to and in form
and substance  reasonably  satisfactory to the Issuer and the Indenture Trustee,
which  opinion and  letters  shall not be an expense of the Owner  Trustee,  the
Indenture Trustee, the Servicer,  the Depositor or the Issuer. The Noteholder of
a Variable Pay Revolving Note desiring to effect such transfer  shall,  and does
hereby agree to,  indemnify the Indenture  Trustee,  the Enhancer and the Issuer
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. In addition, no transfer of
any Variable Pay  Revolving  Note or any interest  therein  shall be made to any
employee  benefit  plan or  certain  other  retirement  plans and  arrangements,
including  individual  retirement  accounts and annuities,  Keogh plans and bank
collective  investment funds and insurance  company general or separate accounts
in which such plans, accounts or arrangements are invested,  that are subject to
ERISA or Section 4975 of the Code (collectively,  a "Plan"),  any Person acting,
directly or indirectly,  on behalf of any such Plan or any Person acquiring such
Variable Pay  Revolving  Note with "plan assets" of a Plan within the meaning of
the Department of Labor  Regulations  Section  2510.3-101 ("Plan Assets") unless
the  Indenture  Trustee and the Servicer are provided with an Opinion of Counsel
that establishes to the  satisfaction of the Indenture  Trustee and the Servicer
that the  purchase of such  Variable Pay  Revolving  Note is  permissible  under
applicable  law,  will not  constitute or result in any  prohibited  transaction
under  ERISA or  Section  4975 of the Code and will not  subject  the  Indenture
Trustee or the Servicer to any obligation or liability (including obligations or
liabilities  under  ERISA or  Section  4975 of the  Code) in  addition  to those
undertaken in this  Indenture,  which Opinion of Counsel shall not be an expense
of the Indenture Trustee or the Servicer.  In lieu of such Opinion of Counsel, a
Plan, any Person acting,  directly or indirectly,  on behalf of any such Plan or
any Person acquiring such Variable Pay Revolving Note with Plan Assets of a Plan
may  provide a  certification  in the form of Exhibit G to the Trust  Agreement,
which the  Indenture  Trustee and the  Servicer  may rely upon  without  further
inquiry or investigation. Neither an Opinion of Counsel nor a certification will
be required in  connection  with the initial  transfer of any such  Variable Pay
Revolving  Note by the Owner Trust to the  Depositor  or any  transfer  from the
Depositor to an Affiliate of the Depositor (in which case,  the Depositor or any
such Affiliate  shall be deemed to have  represented  that the Depositor or such
Affiliate, as applicable, is not a Plan or a Person investing Plan Assets of any
Plan) and the Indenture  Trustee shall be entitled to  conclusively  rely upon a
representation  (which shall be a written  representation) from the Depositor of
the status of such transferee as an Affiliate of the Depositor.

        Until the earlier of (i) 10 days after the  Payment  Date in August 2007
or (ii) the occurrence of an Early Amortization Event, no Variable Pay Revolving
Note issued after the Closing  Date,  either at issuance or upon sale  transfer,
pledge or other disposition, will be registered in the name of any Holder unless
(a) the  Depositor has approved such Holder in writing and (b) such Holder shall
have  established,  to  the  satisfaction  of  the  Indenture  Trustee  and  the
Depositor,  that such Holder has provided  the  Required  Ratings or such Holder

                                       22
<PAGE>

shall have been approved by Noteholders  representing  51% of the aggregate Note
Balance of the Term Notes and the Enhancer (provided that no Enhancer Default or
Insolvency  Event with respect to the Enhancer has occurred and is  continuing),
which approval of the Enhancer  shall not be  unreasonably  withheld;  provided,
that if the  Enhancer  shall not have  notified the  Depositor or the  Indenture
Trustee within five (5) days of receiving notice of a proposed transferee,  that
the Enhancer does not approve such Holder, such approval shall be deemed to have
been made.

        Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor, in each case in authorized initial Note
Balances evidencing the same aggregate Percentage  Interests,  upon surrender of
the Notes to be exchanged at the Corporate  Trust Office of the Note  Registrar.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute and
the Note Registrar shall authenticate and deliver the Notes which the Noteholder
making the exchange is entitled to receive.  Each Note  presented or surrendered
for  registration  of  transfer  or  exchange  shall (if so required by the Note
Registrar) be duly  endorsed by, or be  accompanied  by a written  instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the  Noteholder  thereof or his attorney  duly  authorized  in writing with such
signature  guaranteed by a commercial  bank or trust company located or having a
correspondent  located in The City of New York.  Notes  delivered  upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.

        No service charge shall be imposed for any  registration  of transfer or
exchange  of  Notes,  but the Note  Registrar  shall  require  payment  of a sum
sufficient  to cover  any tax or  governmental  charge  that may be  imposed  in
connection with any registration of transfer or exchange of Notes.

        All Notes surrendered for registration of transfer and exchange shall be
cancelled  by the Note  Registrar  and  delivered to the  Indenture  Trustee for
subsequent destruction without liability on the part of either.

        The  Issuer  hereby  appoints  the  Indenture   Trustee  as  Certificate
Registrar to keep at its Corporate Trust Office a Certificate  Register pursuant
to Section  3.09 of the Trust  Agreement  in which,  subject to such  reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges  thereof pursuant to
Section 3.05 of the Trust Agreement.  The Indenture  Trustee hereby accepts such
appointment.

        Each purchaser of a Note, by its acceptance of the Note, shall be deemed
to have  represented that the acquisition of such Note by the purchaser does not
constitute or give rise to a prohibited  transaction  under Section 406 of ERISA
or  Section  4975  of  the  Code,   for  which  no   statutory,   regulatory  or
administrative exemption is available.

        Section 4.03  Mutilated,  Destroyed,  Lost or Stolen  Notes.  If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives  evidence to its satisfaction of the destruction,  loss or theft of any
Note,  and (ii) there is delivered  to the  Indenture  Trustee such  security or
indemnity as may be required by it to hold the Issuer and the Indenture  Trustee
harmless,  then, in the absence of notice to the Issuer,  the Note  Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and  provided  that the  requirements  of Section  8-405 of the UCC are met, the
Issuer  shall  execute,  and  upon  its  request  the  Indenture  Trustee  shall

                                       23
<PAGE>

authenticate  and  deliver,  in exchange  for or in lieu of any such  mutilated,
destroyed,  lost or stolen Note, a replacement Note of the same class; provided,
however,  that if any such  destroyed,  lost or stolen Note, but not a mutilated
Note,  shall have become or within seven days shall be due and payable,  instead
of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the  preceding  sentence,  a bona fide  purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any  Person  taking  such  replacement  Note  from  such  Person to whom such
replacement  Note was  delivered or any  assignee of such Person,  except a bona
fide purchaser,  and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

        Upon the issuance of any  replacement  Note under this Section 4.03, the
Issuer  may  require  the  payment  by the  Noteholder  of  such  Note  of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
relation  thereto  and any other  reasonable  expenses  (including  the fees and
expenses of the Indenture Trustee) connected therewith.

        Every   replacement  Note  issued  pursuant  to  this  Section  4.03  in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original  additional  contractual  obligation of the Issuer,  whether or not the
mutilated,  destroyed,  lost or stolen Note shall be at any time  enforceable by
anyone,  and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

        The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

        Section  4.04  Persons  Deemed  Owners.  Prior  to due  presentment  for
registration of transfer of any Note, the Issuer,  the Indenture Trustee and any
agent of the Issuer or the Indenture  Trustee may treat the Person in whose name
any Note is  registered  (as of the day of  determination)  as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever,  whether or not such Note be
overdue,  and none of the  Issuer,  the  Indenture  Trustee  or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.

        Section  4.05   Cancellation.   All  Notes   surrendered   for  payment,
registration  of transfer,  exchange or redemption  shall, if surrendered to any
Person other than the Indenture  Trustee,  be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee.  The Issuer may at any
time deliver to the  Indenture  Trustee for  cancellation  any Notes  previously
authenticated and delivered  hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for

                                       24
<PAGE>

any Notes  cancelled  as  provided in this  Section  4.05,  except as  expressly
permitted by this  Indenture.  All cancelled Notes may be held or disposed of by
the  Indenture  Trustee in  accordance  with its standard  retention or disposal
policy as in effect at the time  unless  the  Issuer  shall  direct by an Issuer
Request that they be destroyed or returned to it; provided,  however,  that such
Issuer Request is timely and the Notes have not been  previously  disposed of by
the Indenture Trustee.

        Section 4.06 Book-Entry  Notes.  Each Class of Term Notes, upon original
issuance,  shall be issued in the form of  typewritten  Notes  representing  the
Book-Entry  Notes, to be delivered to The Depository Trust Company,  the initial
Depository,  by, or on behalf of, the Issuer. Such Term Notes shall initially be
registered  on the Note  Register in the name of Cede & Co.,  the nominee of the
initial  Depository,  and no Beneficial  Owner shall  receive a Definitive  Note
representing  such Beneficial  Owner's interest in such Note, except as provided
in Section 4.08. Unless and until definitive,  fully registered Term Notes (such
Term Notes,  together with the Variable Pay  Revolving  Notes,  the  "Definitive
Notes") have been issued to Beneficial Owners pursuant to Section 4.08:

     (a)the provisions of this Section 4.06 shall be in full force and effect;

               (b)the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Depository  for all purposes of this  Indenture  (including the
payment of principal of and interest on the Notes and the giving of instructions
or directions hereunder) as the sole holder of the Term Notes, and shall have no
obligation to the Beneficial Owners;

               (c)to  the  extent  that  the  provisions  of this  Section  4.06
conflict with any other  provisions of this  Indenture,  the  provisions of this
Section 4.06 shall control;

               (d)the  rights  of  Beneficial  Owners  shall be  exercised  only
through  the  Depository  and shall be limited to those  established  by law and
agreements  between  such  Owners of Term  Notes and the  Depository  and/or the
Depository  Participants.  Unless and until Definitive Notes are issued pursuant
to Section 4.08, the initial Depository will make book-entry transfers among the
Depository  Participants  and receive and transmit  payments of principal of and
interest on the Notes to such Depository Participants; and

               (e)whenever  this  Indenture  requires  or permits  actions to be
taken  based  upon  instructions  or  directions  of  Noteholders  of Term Notes
evidencing a specified  percentage of the Note  Balances of the Term Notes,  the
Depository  shall be deemed to represent such percentage only to the extent that
it has  received  instructions  to such effect  from  Beneficial  Owners  and/or
Depository  Participants  owning or  representing,  respectively,  such required
percentage of the  beneficial  interest in the Term Notes and has delivered such
instructions to the Indenture Trustee.

        Section  4.07  Notices  to  Depository.   Whenever  a  notice  or  other
communication  to the  Noteholders  of the Term  Notes is  required  under  this
Indenture,  unless and until  Definitive  Term Notes  shall have been  issued to
Beneficial Owners pursuant to Section 4.08, the Indenture Trustee shall give all
such notices and  communications  specified herein to be given to Noteholders of
the Term Notes to the Depository, and shall have no obligation to the Beneficial
Owners.

                                       25
<PAGE>

        Section 4.08 Definitive Notes. Each Variable Pay Revolving Note shall be
issued as a Definitive  Note. If (i) the Indenture  Trustee  determines that the
Depository   is  no  longer   willing  or  able  to   properly   discharge   its
responsibilities  with  respect to the Term Notes and the  Indenture  Trustee is
unable to locate a qualified  successor,  (ii) the Indenture  Trustee  elects to
terminate the  book-entry  system  through the  Depository,  (iii) the Indenture
Trustee  receives actual  knowledge of a proposed  transfer of a Term Note to an
"accredited  investor" in accordance with Section 4.02 and Exhibit C hereof,  or
(iv) after the  occurrence  of an Event of  Default,  Beneficial  Owners of Term
Notes representing  beneficial interests  aggregating at least a majority of the
aggregate  Term Note Balance of the Term Notes advise the  Depository in writing
that the continuation of a book-entry system through the Depository is no longer
in the best interests of the Beneficial Owners, then the Depository shall notify
all  Beneficial  Owners and the Indenture  Trustee of the occurrence of any such
event  and  of  the  availability  of  Definitive  Notes  to  Beneficial  Owners
requesting the same. Upon surrender to the Indenture  Trustee of the typewritten
Term Notes  representing  the Book-Entry  Notes by the Depository (or Percentage
Interest of the  Book-Entry  Notes being  transferred  pursuant to clause  (iii)
above), accompanied by registration  instructions,  the Issuer shall execute and
the Indenture Trustee shall authenticate the Definitive Notes in accordance with
the  instructions of the Depository.  None of the Issuer,  the Note Registrar or
the  Indenture  Trustee  shall  be  liable  for any  delay in  delivery  of such
instructions,  and each may  conclusively  rely on,  and shall be  protected  in
relying on,  such  instructions.  Upon the  issuance of  Definitive  Notes,  the
Indenture  Trustee shall  recognize the  Noteholders of the Definitive  Notes as
Noteholders.

        Section 4.09 Tax Treatment.  The Issuer has entered into this Indenture,
and the Notes will be issued,  with the intention  that, for federal,  state and
local income,  single  business and  franchise  tax purposes,  the Notes will be
treated as indebtedness for purposes of such taxes. The Issuer, by entering into
this  Indenture,  and each  Noteholder,  by its acceptance of its Note (and each
Beneficial  Owner by its acceptance of an interest in the applicable  Book-Entry
Note),  agree to treat the Notes for  federal,  state and local  income,  single
business and franchise tax purposes as indebtedness for purposes of such taxes.

        Section 4.10  Satisfaction  and Discharge of Indenture.  This  Indenture
shall cease to be of further  effect with  respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee  hereunder  (including the rights of the Indenture Trustee under Section
6.07 and the  obligations of the Indenture  Trustee under Section 4.11) and (vi)
the rights of Noteholders as  beneficiaries  hereof with respect to the property
so deposited with the Indenture  Trustee  payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer,  shall execute
proper  instruments  acknowledging  satisfaction and discharge of this Indenture
with respect to the Notes, when:

                      (A)    either:

                             (1)  all  Notes   theretofore   authenticated   and
                      delivered  (other than (i) Notes that have been destroyed,
                      lost or  stolen  and that have  been  replaced  or paid as

                                       26
<PAGE>

                      provided in Section 4.03 and (ii) Notes for whose  payment
                      money  has   theretofore   been   deposited  in  trust  or
                      segregated  and held in trust by the Issuer and thereafter
                      repaid to the Issuer or  discharged  from such  trust,  as
                      provided  in  Section  3.03)  have been  delivered  to the
                      Indenture Trustee for cancellation; or

        (2) all Notes not theretofore  delivered to the Indenture Trustee
 for cancellation:

               a)  have become due and payable;

               b)  will become due and payable at the Final  Payment Date
        within one year; or

               c)  have  been  declared   immediately   due  and  payable
        pursuant to Section 5.02.

        and the Issuer, in the case of a. or b. above, has irrevocably deposited
        or caused to be irrevocably deposited with the Indenture Trustee cash or
        direct obligations of or obligations  guaranteed by the United States of
        America  (which will mature prior to the date such amounts are payable),
        in trust for such purpose,  in an amount sufficient to pay and discharge
        the entire  indebtedness on such Notes and Certificates then outstanding
        not theretofore delivered to the Indenture Trustee for cancellation when
        due on the Final Payment Date, as evidenced to the Indenture  Trustee by
        an accountant's letter or an Officer's Certificate of the Issuer;

                    (3) the  Issuer has paid or caused to be paid all other sums
               payable  hereunder  and  under  the  Insurance  Agreement  by the
               Issuer; and

                    (4) the Issuer has  delivered to the  Indenture  Trustee and
               the Enhancer an Officer's  Certificate and an Opinion of Counsel,
               each meeting the  applicable  requirements  of Section  10.01 and
               each stating that all conditions  precedent  herein  provided for
               relating to the satisfaction and discharge of this Indenture have
               been  complied  with and, if the Opinion of Counsel  relates to a
               deposit made in connection with Section 4.10(A)(2)b.  above, such
               opinion shall further be to the effect that such deposit will not
               have any material  adverse tax  consequences  to the Issuer,  any
               Noteholders or any Certificateholders.

        Section 4.11  Application of Trust Money.  All monies deposited with the
Indenture  Trustee  pursuant to Section  4.10 hereof  shall be held in trust and
applied  by it,  in  accordance  with  the  provisions  of the  Notes  and  this
Indenture,  to the  payment,  either  directly  or through  any Paying  Agent or
Certificate  Paying  Agent,  as the  Indenture  Trustee  may  determine,  to the
Securityholders  of  Securities,  of all sums due and to become due  thereon for
principal and interest;  but such monies need not be segregated from other funds
except to the extent required herein or required by law.

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<PAGE>

        Section 4.12  Subrogation and Cooperation.
                      ---------------------------

               (a)The Issuer and the Indenture  Trustee  acknowledge that (i) to
the extent the Enhancer  makes payments under the Policy on account of principal
of or interest on the Mortgage Loans,  the Enhancer will be fully  subrogated to
the rights the  Noteholders  to receive  such  principal  of and interest on the
Mortgage Loans,  and (ii) the Enhancer shall be paid such principal and interest
only from the sources  and in the manner  provided  herein and in the  Insurance
Agreement for the payment of such principal and interest.

        The  Indenture   Trustee  shall  cooperate  in  all  respects  with  any
reasonable  request by the  Enhancer  for  action to  preserve  or  enforce  the
Enhancer's  rights or interest under this Indenture or the Insurance  Agreement,
consistent  with  this  Indenture  and  without   limiting  the  rights  of  the
Noteholders  as  otherwise  set  forth  in the  Indenture,  including  upon  the
occurrence and continuance of a default under the Insurance Agreement, a request
(which  request  shall be in writing)  to take any one or more of the  following
actions:

                      (i)  institute  Proceedings  for  the  collection  of  all
        amounts then payable on the Notes or under this  Indenture in respect to
        the Notes and all amounts  payable under the Insurance  Agreement and to
        enforce  any  judgment  obtained  and  collect  from the  Issuer  monies
        adjudged due;

                      (ii)  sell the  Trust  Estate or any  portion  thereof  or
        rights or interest  therein,  at one or more public or private Sales (as
        defined in Section  5.15  hereof)  called  and  conducted  in any manner
        permitted by law;

                    (iii)  file  or  record  all   assignments   that  have  not
               previously been recorded;

                    (iv)  institute  Proceedings  from  time  to  time  for  the
               complete or partial foreclosure of this Indenture; and

                      (v) exercise any remedies of a secured party under the UCC
        and take any other appropriate  action to protect and enforce the rights
        and remedies of the Enhancer hereunder.

        Following the payment in full of the Notes,  the Enhancer shall continue
to have all rights and  privileges  provided to it under this Section and in all
other provisions of this Indenture, until all amounts owing to the Enhancer have
been paid in full.

        Section 4.13  Repayment of Monies Held by Paying  Agent.  In  connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies  then held by any Paying  Agent  (other than the  Indenture  Trustee)
under the provisions of this  Indenture  with respect to such Notes shall,  upon
demand of the Issuer,  be paid to the  Indenture  Trustee to be held and applied
according to Section 3.05;  and  thereupon,  such Paying Agent shall be released
from all further liability with respect to such monies.

                                       28
<PAGE>

        Section 4.14 Temporary Notes.  Pending the preparation of any Definitive
Notes,  the Issuer may  execute and upon its written  direction,  the  Indenture
Trustee may authenticate  and make available for delivery,  temporary Notes that
are printed,  lithographed,  typewritten,  photocopied or otherwise produced, in
any denomination,  substantially of the tenor of the Definitive Notes in lieu of
which  they  are  issued  and  with  such  appropriate  insertions,   omissions,
substitutions  and other  variations  as the officers  executing  such Notes may
determine, as evidenced by their execution of such Notes.

        If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without  unreasonable delay. After the preparation of the Definitive
Notes,  the temporary  Notes shall be  exchangeable  for  Definitive  Notes upon
surrender  of the  temporary  Notes at the  office or  agency  of the  Indenture
Trustee,  without charge to the Noteholder.  Upon surrender for  cancellation of
any one or more  temporary  Notes,  the Issuer shall  execute and the  Indenture
Trustee  shall  authenticate  and  make  available  for  delivery,  in  exchange
therefor,  Definitive  Notes of authorized  denominations  and of like tenor and
aggregate  principal amount.  Until so exchanged,  such temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Notes.

                                    ARTICLE V

                              Default And Remedies

        Section  5.01  Events  of  Default.  The  Issuer  shall  deliver  to the
Indenture  Trustee  and the  Enhancer,  within  five days after  learning of the
occurrence  of any event  that with the  giving of notice  and the lapse of time
would become an Event of Default under clause (c) of the definition of "Event of
Default"  written  notice in the form of an Officer's  Certificate of its status
and what action the Issuer is taking or proposes to take with respect thereto.

        Section 5.02 Acceleration of Maturity;  Rescission and Annulment.  If an
Event of Default shall occur and be continuing,  then and in every such case the
Indenture Trustee, acting at the direction of the Enhancer or the Noteholders of
Notes representing not less than a majority of the aggregate Note Balance of the
Notes,  with the written consent of the Enhancer (unless an Enhancer Default has
occurred and is  continuing),  may declare the Notes to be  immediately  due and
payable by a notice in writing to the Issuer  (and to the  Indenture  Trustee if
given by  Noteholders);  and upon any such  declaration,  the  unpaid  principal
amount of the Notes,  together with accrued and unpaid interest  thereon through
the date of acceleration, shall become immediately due and payable.

        At any time after such  declaration  of  acceleration  of maturity  with
respect to an Event of Default has been made and before a judgment or decree for
payment  of the  money  due  has  been  obtained  by the  Indenture  Trustee  as
hereinafter provided in this Article V, the Enhancer or the Noteholders of Notes
representing  a majority of the  aggregate  Note Balance of the Notes,  with the
written  consent  of the  Enhancer,  by  written  notice to the  Issuer  and the
Indenture Trustee, may in writing waive the related Event of Default and rescind
and annul such declaration and its consequences if:

                                       29
<PAGE>

     (a)the  Issuer  has paid or  deposited  with the  Indenture  Trustee  a sum
sufficient to pay:

                      (i) all payments of principal of and interest on the Notes
        and all other amounts that would then be due hereunder or upon the Notes
        if the  Event  of  Default  giving  rise  to such  acceleration  had not
        occurred;

                      (ii) all sums paid or  advanced by the  Indenture  Trustee
        hereunder and the reasonable compensation,  expenses,  disbursements and
        advances of the Indenture Trustee and its agents and counsel; and

                      (iii) all Events of Default,  other than the nonpayment of
        the  principal  of  the  Notes  that  has  become  due  solely  by  such
        acceleration, have been cured or waived as provided in Section 5.12;

provided that no such waiver shall be effective  following an Early Amortization
Event if the requisite  consents of the  Noteholders  and the Enhancer have been
obtained  with  respect  to a sale or  other  liquidation  of the  Trust  Estate
pursuant to Section 5.04(a).

        No such  rescission  shall affect any  subsequent  default or impair any
right consequent thereto.

     Section  5.03  Collection  of  Indebtedness  and Suits for  Enforcement  by
Indenture Trustee.

               (a)The Issuer covenants that if default in the payment of (i) any
interest on any Note when the same  becomes due and  payable,  and such  default
continues for a period of five days, or (ii) the principal of or any installment
of the  principal of any Note when the same becomes due and payable,  the Issuer
shall, upon demand of the Indenture  Trustee,  pay to it, for the benefit of the
Noteholders,  the entire  amount then due and payable on the Notes for principal
and interest,  with interest on the overdue  principal,  and in addition thereto
such further  amount as shall be  sufficient  to cover the costs and expenses of
collection,  including the reasonable compensation,  expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.

               (b)In case the Issuer  shall fail  forthwith  to pay such amounts
upon such demand,  the Indenture  Trustee,  in its own name and as trustee of an
express trust,  subject to the provisions of Section 10.17 hereof, may institute
a Proceeding for the collection of the sums so due and unpaid, and may prosecute
such  Proceeding to judgment or final  decree,  and may enforce the same against
the Issuer or other  obligor on the Notes and collect in the manner  provided by
law out of the  property of the Issuer or other  obligor on the Notes,  wherever
situated, the monies adjudged or decreed to be payable.

               (c)If an Event of  Default  shall  occur and be  continuing,  the
Indenture  Trustee,  subject to the provisions of Section 10.17 hereof,  may, as
more particularly provided in Section 5.04, in its discretion proceed to protect
and enforce  its rights and the rights of the  Noteholders  by such  appropriate

                                       30
<PAGE>

Proceedings  as the Indenture  Trustee shall deem most  effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement  in this  Indenture  or in aid of the  exercise  of any power  granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.

               (d)If there shall be pending, relative to the Issuer or any other
obligor on the Notes or any Person  having or claiming an ownership  interest in
the Trust  Estate,  Proceedings  under Title 11 of the United States Code or any
other applicable  federal or state bankruptcy,  insolvency or other similar law,
or  if  a  receiver,  assignee  or  trustee  in  bankruptcy  or  reorganization,
liquidator,  sequestrator  or similar  official shall have been appointed for or
taken  possession of the Issuer or its property or such other obligor or Person,
or if there shall be any other comparable judicial  Proceedings  relative to the
Issuer or other any other obligor on the Notes,  or relative to the creditors or
property  of the  Issuer or such  other  obligor,  then the  Indenture  Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise, and irrespective of whether
the Indenture  Trustee shall have made any demand  pursuant to the provisions of
this  Section,  shall  be  entitled  and  empowered,  by  intervention  in  such
Proceedings or otherwise:

                      (i) to file and  prove a claim or  claims  for the  entire
        amount of  principal  and  interest  owing and  unpaid in respect of the
        Notes and to file such other  papers or documents as may be necessary or
        advisable  in  order  to  have  the  claims  of  the  Indenture  Trustee
        (including  any  claim  for  reasonable  compensation  to the  Indenture
        Trustee and each  predecessor  Indenture  Trustee,  and their respective
        agents, attorneys and counsel, and for reimbursement of all expenses and
        liabilities  incurred,  and all advances made, by the Indenture  Trustee
        and  each  predecessor   Indenture  Trustee,   except  as  a  result  of
        negligence,  willful  misconduct  or bad faith)  and of the  Noteholders
        allowed in such Proceedings;

                      (ii) unless  prohibited by applicable law and regulations,
        to vote on behalf of the  Noteholders  in any  election of a trustee,  a
        standby  trustee  or Person  performing  similar  functions  in any such
        Proceedings;

                      (iii) to collect and receive any monies or other  property
        payable or  deliverable on any such claims and to distribute all amounts
        received  with  respect  to the  claims  of the  Noteholders  and of the
        Indenture Trustee on their behalf; and

                      (iv) to file such  proofs  of claim  and  other  papers or
        documents  as may be  necessary or advisable in order to have the claims
        of the  Indenture  Trustee or the  Noteholders  allowed in any  judicial
        proceedings relative to the Issuer, its creditors and its property;

and any trustee,  receiver,  liquidator,  custodian or other similar official in
any such  Proceeding is hereby  authorized by each of such  Noteholders  to make
payments to the Indenture Trustee, and, in the event the Indenture Trustee shall
consent to the making of payments  directly to such  Noteholders,  to pay to the
Indenture  Trustee  such  amounts  as shall be  sufficient  to cover  reasonable

                                       31
<PAGE>

compensation to the Indenture  Trustee,  each predecessor  Indenture Trustee and
their  respective  agents,  attorneys  and counsel,  and all other  expenses and
liabilities  incurred,  and all advances made, by the Indenture Trustee and each
predecessor  Indenture  Trustee,  except  as a  result  of  negligence,  willful
misconduct or bad faith.

               (e)Nothing  herein  contained  shall be deemed to  authorize  the
Indenture  Trustee to  authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization,  arrangement, adjustment or
composition  affecting the Notes or the rights of any  Noteholder  thereof or to
authorize  the  Indenture  Trustee  to  vote  in  respect  of the  claim  of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

               (f)All  rights of  action  and of  asserting  claims  under  this
Indenture,  or under any of the Notes, may be enforced by the Indenture  Trustee
without  the  possession  of any of the Notes or the  production  thereof in any
trial or other Proceedings  relative thereto, and any such action or proceedings
instituted by the Indenture  Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses,   disbursements  and  compensation  of  the  Indenture  Trustee,  each
predecessor  Indenture Trustee and their respective agents and attorneys,  shall
be for the ratable benefit of the Holders of the Term Notes and the Variable Pay
Revolving Notes, as applicable.

               (g)In any  Proceedings to which the Indenture  Trustee shall be a
party (including any Proceedings  involving the  interpretation of any provision
of this  Indenture),  the  Indenture  Trustee  shall  be held to  represent  all
Noteholders, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.

        Section 5.04  Remedies; Priorities.
                      --------------------

               (a)If an Event of Default shall have occurred and be  continuing,
then the Indenture  Trustee,  subject to the provisions of Section 10.17 hereof,
with the written  consent of the Enhancer  may, or, at the written  direction of
the Enhancer,  shall,  do one or more of the following,  in each case subject to
Section 5.05:

                      (i) institute  Proceedings  in its own name and as trustee
        of an express  trust for the  collection  of all amounts then payable on
        the Notes or under  this  Indenture  with  respect  thereto,  whether by
        declaration  or otherwise,  and all amounts  payable under the Insurance
        Agreement,  enforce any judgment  obtained,  and collect from the Issuer
        and any other obligor on the Notes monies adjudged due;

                      (ii)  institute  Proceedings  from  time to  time  for the
        complete or partial  foreclosure  of this  Indenture with respect to the
        Trust Estate;

                      (iii)  exercise any remedies of a secured  party under the
        UCC and take any other  appropriate  action to protect  and  enforce the
        rights and remedies of the Indenture Trustee and the Noteholders; and

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<PAGE>

                      (iv)  sell the  Trust  Estate or any  portion  thereof  or
        rights or  interest  therein,  at one or more  public or  private  sales
        called and conducted in any manner permitted by law;

provided,  however,  that  the  Indenture  Trustee  may not  sell  or  otherwise
liquidate  the  Trust  Estate  following  an Event of  Default,  unless  (A) the
Indenture Trustee obtains the consent of the Enhancer, which consent will not be
unreasonably withheld, and the Noteholders of 100% of the aggregate Note Balance
of the Notes,  (B) the  proceeds of such sale or  liquidation  distributable  to
Noteholders  are sufficient to discharge in full all amounts then due and unpaid
upon the Notes for  principal and interest and to reimburse the Enhancer for any
amounts drawn under the Policy and any other amounts due the Enhancer  under the
Insurance  Agreement or (C) the Indenture  Trustee  determines that the Mortgage
Loans will not continue to provide sufficient funds for the payment of principal
of and  interest on the Notes as they would have become due if the Notes had not
been declared due and payable,  and the Indenture Trustee obtains the consent of
the  Enhancer,  which  consent  will  not  be  unreasonably  withheld,  and  the
Noteholders  of 66  2/3%  of  the  aggregate  Note  Balance  of  the  Notes.  In
determining such sufficiency or insufficiency with respect to clause (B) and (C)
above,  the Indenture  Trustee may, but need not,  obtain and rely, and shall be
protected in relying in good faith, upon an opinion of an Independent investment
banking or accounting firm of national  reputation as to the feasibility of such
proposed  action and as to the sufficiency of the Trust Estate for such purpose.
Notwithstanding the foregoing,  provided that a Servicing Default shall not have
occurred, any Sale (as defined in Section 5.15 hereof) of the Trust Estate shall
be made subject to the continued servicing of the Mortgage Loans by the Servicer
as provided in the Servicing Agreement. Notwithstanding any sale of the Mortgage
Loans pursuant to this Section 5.04(a), the Indenture Trustee shall, for so long
as any principal or accrued  interest on the Notes remains  unpaid,  continue to
act as Indenture  Trustee hereunder and to draw amounts payable under the Policy
in accordance with its terms.

               (b)If  the  Indenture  Trustee  collects  any  money or  property
pursuant  to this  Article  V, it shall pay out such  money or  property  in the
following order:

             FIRST: to the Indenture Trustee for amounts due under Section 6.07;

               SECOND:to  the  Noteholders  for  amounts  due and  unpaid on the
               related Notes for interest, including accrued and unpaid interest
               on the  Notes  for  any  prior  Payment  Date,  ratably,  without
               preference or priority of any kind,  according to the amounts due
               and payable on such Notes for interest from amounts  available in
               the Trust Estate for such Noteholders, but excluding any Interest
               Shortfalls;

               THIRD:  to the  Noteholders  for  amounts  due and  unpaid on the
               related  Notes for  principal,  ratably,  without  preference  or
               priority of any kind, according to the amounts due and payable on
               such Notes for  principal,  from  amounts  available in the Trust
               Estate for such  Noteholders,  until the respective Note Balances
               of such Notes have been reduced to zero;

               FOURTH:to  the payment of all amounts due and owing the  Enhancer
               under the Insurance Agreement;

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<PAGE>

               FIFTH:  to the  Noteholders  for  amounts  due and  unpaid on the
               related  Notes for Interest  Shortfalls,  if any,  including  any
               unpaid  Interest  Shortfalls  on the Notes for any prior  Payment
               Date,  ratably,  without  preference  or  priority  of any  kind,
               according to such amounts due and payable from amounts  available
               in the Trust Estate for such Noteholders;

               SIXTH:  to the  Certificate  Paying  Agent for  amounts due under
               Article VIII of the Trust Agreement; and

               SEVENTH:  to the payment of the remainder,  if any, to the Issuer
               or any other person legally entitled thereto.

        The  Indenture  Trustee may fix a record  date and payment  date for any
payment to  Noteholders  pursuant to this Section  5.04. At least 15 days before
such record date, the Indenture  Trustee shall mail to each  Noteholder a notice
that states the record date, the payment date and the amount to be paid.

        Section 5.05 Optional  Preservation  of the Trust  Estate.  If the Notes
have been  declared due and payable  under  Section  5.02  following an Event of
Default and such  declaration and its  consequences  have not been rescinded and
annulled,  the  Indenture  Trustee  may,  but need not (but shall at the written
direction of the Enhancer),  elect to take and maintain  possession of the Trust
Estate;  provided  that no such waiver  shall be  effective  following  an Early
Amortization Event if the requisite consents of the Noteholders and the Enhancer
have been  obtained  with  respect to a sale or other  liquidation  of the Trust
Estate pursuant to Section  5.04(a).  It is the desire of the parties hereto and
the Noteholders  that there be at all times  sufficient funds for the payment of
principal  of and  interest  on the Notes and other  obligations  of the  Issuer
including  payment to the Enhancer,  and the  Indenture  Trustee shall take such
desire  into  account  when  determining  whether  or not to take  and  maintain
possession  of the Trust  Estate.  In  determining  whether to take and maintain
possession of the Trust Estate,  the Indenture Trustee may, but need not, obtain
and rely, and shall be protected in relying in good faith, upon an opinion of an
Independent  investment banking or accounting firm of national  reputation as to
the  feasibility of such proposed  action and as to the sufficiency of the Trust
Estate for such purpose.

        Section 5.06 Limitation of Suits. No Noteholder  shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the  appointment  of a  receiver  or  trustee,  or for any  other  remedy
hereunder, unless and subject to the provisions of Section 10.17 hereof:

     (a)such  Noteholder  shall  have  previously  given  written  notice to the
Indenture Trustee of a continuing Event of Default;

               (b)the  Noteholders  of not less than 25% of the  aggregate  Note
Balance of the Notes shall have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;

                                       34
<PAGE>

               (c)such   Noteholder  or  Noteholders   shall  have  offered  the
Indenture  Trustee  reasonable   indemnity  against  the  costs,   expenses  and
liabilities to be incurred by it in complying with such request;

               (d)the  Indenture  Trustee  for 60 days after its receipt of such
notice,  request  and offer of  indemnity  shall have failed to  institute  such
Proceedings; and

               (e)no direction inconsistent with such written request shall have
been given to the Indenture Trustee during such 60-day period by the Noteholders
of a majority of the aggregate Note Balance of the Notes or by the Enhancer.

        It is understood and intended that no Noteholder shall have any right in
any manner  whatever  by virtue of, or by  availing  of, any  provision  of this
Indenture to affect, disturb or prejudice the rights of any other Noteholders or
to obtain or to seek to obtain priority or preference over any other Noteholders
or to enforce  any right  under  this  Indenture,  except in the  manner  herein
provided.

        In  the  event  the  Indenture  Trustee  shall  receive  conflicting  or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing  less than a majority of the  aggregate  Note Balance of the Notes,
the Indenture  Trustee  shall act at the  direction of the group of  Noteholders
with the greater Note  Balance.  In the event that the  Indenture  Trustee shall
receive  conflicting  or  inconsistent  requests and indemnity  from two or more
groups of  Noteholders  representing  the same Note Balance,  then the Indenture
Trustee in its sole  discretion  may  determine  what action,  if any,  shall be
taken, notwithstanding any other provisions of this Indenture.

        Section 5.07  Unconditional  Rights of Noteholders to Receive  Principal
and Interest. Subject to the provisions of this Indenture, the Noteholder of any
Note shall have the  right,  which is  absolute  and  unconditional,  to receive
payment of the principal of and  interest,  if any, on such Note on or after the
respective due dates thereof  expressed in such Note or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Noteholder.

        Section  5.08  Restoration  of Rights  and  Remedies.  If the  Indenture
Trustee or any  Noteholder has instituted any Proceeding to enforce any right or
remedy  under  this  Indenture  and such  Proceeding  has been  discontinued  or
abandoned  for any  reason or has been  determined  adversely  to the  Indenture
Trustee  or to such  Noteholder,  then and in every  such case the  Issuer,  the
Indenture  Trustee and the Noteholders  shall,  subject to any  determination in
such  Proceeding,  be  restored  severally  and  respectively  to  their  former
positions  hereunder,  and  thereafter  all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.

        Section 5.09 Rights and Remedies  Cumulative.  No right or remedy herein
conferred  upon or  reserved  to the  Indenture  Trustee,  the  Enhancer  or the
Noteholders is intended to be exclusive of any other right or remedy,  and every
right and remedy shall,  to the extent  permitted by law, be  cumulative  and in

                                       35
<PAGE>

addition to every other right and remedy  given  hereunder  or now or  hereafter
existing at law, in equity or  otherwise.  The  assertion or  employment  of any
right or remedy  hereunder,  or  otherwise,  shall not  prevent  the  concurrent
assertion or employment of any other appropriate right or remedy.

        Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the
Indenture  Trustee,  the  Enhancer or any  Noteholder  to exercise  any right or
remedy  accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence  therein.
Every  right  and  remedy  given by this  Article  V or by law to the  Indenture
Trustee or to the  Noteholders  may be exercised from time to time, and as often
as may be deemed expedient,  by the Indenture Trustee or by the Noteholders,  as
the case may be.

        Section 5.11 Control by Enhancer or  Noteholders.  The Enhancer (so long
as no Enhancer Default exists) or the Noteholders of a majority of the aggregate
Note Balance of Notes with the consent of the Enhancer,  shall have the right to
direct the time,  method and place of conducting  any  Proceeding for any remedy
available to the Indenture  Trustee with respect to the Notes or exercising  any
trust or power conferred on the Indenture Trustee, provided that:

     (a)such  direction  shall not be in  conflict  with any rule of law or with
this Indenture;

               (b)subject to the express terms of Section 5.04, any direction to
the  Indenture  Trustee to sell or  liquidate  the Trust  Estate shall be by the
Enhancer (so long as no Enhancer  Default exists) or by the Noteholders of Notes
representing  not less than 100% of the aggregate Note Balance of the Notes with
the consent of the Enhancer;

               (c)if the  conditions  set forth in Section  5.05 shall have been
satisfied and the Indenture  Trustee elects to retain the Trust Estate  pursuant
to such Section,  then any direction to the Indenture  Trustee by Noteholders of
Notes  representing less than 100% of the aggregate Note Balance of the Notes to
sell or liquidate the Trust Estate shall be of no force and effect; and

               (d)the Indenture  Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.

Notwithstanding the rights of Noteholders set forth in this Section,  subject to
Section 6.01, the Indenture  Trustee need not take any action that it determines
(in its sole  discretion)  might  involve it in  liability  or might  materially
adversely  affect the rights of any  Noteholders  not consenting to such action,
unless the Trustee has received  satisfactory  indemnity  from the Enhancer or a
Noteholder.

        Section 5.12 Waiver of Past  Defaults.  Prior to the  declaration of the
acceleration  of the  maturity  of the Notes as provided  in Section  5.02,  the
Enhancer (so long as no Enhancer  Default exists) or the Noteholders of not less
than a majority of the aggregate Note Balance of the Notes,  with the consent of
the Enhancer,  may waive any past Event of Default and its consequences,  except
an Event of Default (a) with  respect to payment of  principal of or interest on
any of the Notes or (b) in respect of a covenant or provision hereof that cannot

                                       36
<PAGE>

be modified or amended  without the consent of the  Noteholder  of each Note. In
the  case  of any  such  waiver,  the  Issuer,  the  Indenture  Trustee  and the
Noteholders  shall be restored to their  respective  former positions and rights
hereunder;  but no such waiver shall extend to any  subsequent or other Event of
Default or impair any right consequent thereto.

        Upon any such waiver,  any Event of Default  arising  therefrom shall be
deemed to have been cured and not to have  occurred,  for every  purpose of this
Indenture;  but no such waiver shall extend to any  subsequent or other Event of
Default or impair any right consequent thereto.

        Section 5.13 Undertaking for Costs. All parties to this Indenture agree,
and each Noteholder by such Noteholder's acceptance of the related Note shall be
deemed to have  agreed,  that any court may in its  discretion  require,  in any
Proceeding for the enforcement of any right or remedy under this  Indenture,  or
in any Proceeding  against the Indenture Trustee for any action taken,  suffered
or omitted by it as Indenture Trustee,  the filing by any party litigant in such
Proceeding of an undertaking to pay the costs of such Proceeding,  and that such
court  may in its  discretion  assess  reasonable  costs,  including  reasonable
attorneys'  fees,  against  any party  litigant in such  Proceeding,  having due
regard to the merits and good faith of the claims or defenses made by such party
litigant;  but the  provisions  of this  Section 5.13 shall not apply to (a) any
Proceeding instituted by the Indenture Trustee, (b) any Proceeding instituted by
any Noteholder,  or group of Noteholders,  in each case holding in the aggregate
more than 10% of the aggregate  Note Balance of the Notes or (c) any  Proceeding
instituted by any Noteholder for the  enforcement of the payment of principal of
or interest on any Note on or after the respective  due dates  expressed in such
Note and in this Indenture.

        Section 5.14 Waiver of Stay or Extension Laws. The Issuer  covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension  law  wherever  enacted,  now or at any time  hereafter in
force,  that may affect the covenants or the performance of this Indenture;  and
the Issuer (to the extent that it may  lawfully do so) hereby  expressly  waives
all  benefit  or  advantage  of any such law,  and  covenants  that it shall not
hinder,  delay or impede  the  execution  of any  power  herein  granted  to the
Indenture Trustee,  but will suffer and permit the execution of every such power
as though no such law had been enacted.

        Section 5.15  Sale of Trust Estate.
                      --------------------

               (a)The power to effect any sale or other  disposition  (a "Sale")
of any portion of the Trust Estate pursuant to Section 5.04 is expressly subject
to the provisions of Section 5.05 and this Section 5.15. The power to effect any
such Sale shall not be  exhausted  by any one or more Sales as to any portion of
the Trust Estate  remaining  unsold,  but shall  continue  unimpaired  until the
entire Trust Estate shall have been sold or all amounts payable on the Notes and
under this Indenture and under the Insurance Agreement shall have been paid. The
Indenture  Trustee  may from time to time  postpone  any  public  Sale by public
announcement  made at the time and place of such  Sale.  The  Indenture  Trustee
hereby expressly waives its right to any amount fixed by law as compensation for
any Sale.

               (b)The  Indenture  Trustee shall not in any private Sale sell the
Trust Estate, or any portion thereof, unless:

                                       37
<PAGE>

               (i) the  Noteholders  of all Notes and the  Enhancer  direct  the
          Indenture Trustee to make, such Sale,

                      (ii) the  proceeds of such Sale would be not less than the
        entire amount that would be payable to the Noteholders  under the Notes,
        the  Certificateholders  under  the  Certificates  and the  Enhancer  in
        respect of amounts  drawn under the Policy and any other amounts due the
        Enhancer  under the  Insurance  Agreement,  in full  payment  thereof in
        accordance  with Section 5.02, on the Payment Date next  succeeding  the
        date of such Sale, or

                      (iii)  the  Indenture  Trustee  determines,  in  its  sole
        discretion,  that the  conditions  for retention of the Trust Estate set
        forth  in  Section  5.05  cannot  be  satisfied   (in  making  any  such
        determination,  the Indenture Trustee may rely and shall be protected in
        relying  in good faith  upon an  opinion  of an  Independent  investment
        banking firm  obtained and delivered as provided in Section  5.05),  and
        the  Enhancer  consents  to  such  Sale  (which  consent  shall  not  be
        unreasonably  withheld),  and the  Noteholders of Notes  representing at
        least 66 2/3% of the aggregate Note Balance of the Notes consent to such
        Sale.

The purchase by the Indenture  Trustee of all or any portion of the Trust Estate
at a private  Sale shall not be deemed a Sale or other  disposition  thereof for
purposes of this Section 5.15(b).

               (c)Unless the  Noteholders  and the Enhancer shall have otherwise
consented or directed the  Indenture  Trustee,  at any public Sale of all or any
portion of the Trust  Estate at which a minimum bid equal to or greater than the
amount  described in paragraph  (ii) of subsection  (b) of this Section 5.15 has
not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount,  then the Indenture  Trustee shall bid an amount
at least  $1.00 more than the highest  other bid,  which bid shall be subject to
the provisions of Section 5.15(d)(ii) herein.

               (d)In  connection  with a Sale of all or any portion of the Trust
Estate:

                      (i) any  Noteholder  may bid for and,  with the consent of
        the  Enhancer,   purchase  the  property  offered  for  sale,  and  upon
        compliance  with the  terms of sale may hold,  retain  and  possess  and
        dispose of such property,  without further  accountability,  and may, in
        paying the  purchase  money  therefor,  deliver  any Notes or claims for
        interest  thereon in lieu of cash up to the  amount  which  shall,  upon
        distribution of the net proceeds of such sale, be payable  thereon,  and
        such Notes,  in case the amounts so payable  thereon  shall be less than
        the amount due  thereon,  shall be returned to the  Noteholders  thereof
        after being appropriately stamped to show such partial payment;

                      (ii) the  Indenture  Trustee  may bid for and  acquire the
        property  offered  for Sale in  connection  with any Sale  thereof  and,
        subject  to  any  requirements  of,  and  to the  extent  permitted  by,
        applicable law in connection therewith,  may purchase all or any portion
        of the Trust Estate in a private sale. In lieu of paying cash  therefor,
        the  Indenture  Trustee may make  settlement  for the purchase  price by
        crediting  the gross Sale price  against  the sum of (A) the amount that
        would be distributable to the Noteholders and the Certificateholders and

                                       38
<PAGE>

        amounts  owing to the  Enhancer  as a result of such Sale in  accordance
        with  Section  5.04(b) on the Payment Date next  succeeding  the date of
        such Sale and (B) the  expenses  of the Sale and of any  Proceedings  in
        connection therewith that are reimbursable to it, without being required
        to produce the Notes in order to complete  any such Sale or in order for
        the net Sale price to be credited  against such Notes,  and any property
        so acquired by the Indenture  Trustee shall be held and dealt with by it
        in accordance with the provisions of this Indenture;

                      (iii) the  Indenture  Trustee shall execute and deliver an
        appropriate  instrument of conveyance  transferring  its interest in any
        portion of the Trust Estate in connection with a Sale thereof;

                      (iv) the Indenture Trustee is hereby irrevocably appointed
        the agent and  attorney-in-fact of the Issuer to transfer and convey its
        interest in any portion of the Trust  Estate in  connection  with a Sale
        thereof, and to take all action necessary to effect such Sale; and

                      (v) no  purchaser  or  transferee  at such a Sale shall be
        bound to ascertain the Indenture Trustee's  authority,  inquire into the
        satisfaction  of any conditions  precedent or see to the  application of
        any monies.

        Section 5.16 Action on Notes. The Indenture  Trustee's right to seek and
recover  judgment on the Notes or under this Indenture  shall not be affected by
the seeking,  obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture  Trustee  against the Issuer or by the levy of any
execution  under such  judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer.  Any money or property  collected by the  Indenture
Trustee shall be applied in accordance with Section 5.04(b).

        Section 5.17  Performance and Enforcement of Certain Obligations.
                      --------------------------------------------------

               (a)Promptly  following a written request from the Enhancer or the
Indenture Trustee (with the written consent of the Enhancer), the Issuer, in its
capacity as owner of the Mortgage Loans,  shall, with the written consent of the
Enhancer,  take all such lawful action as the  Indenture  Trustee may request to
cause the  Issuer to compel or secure  the  performance  and  observance  by the
Sellers and the Servicer,  as  applicable,  of each of their  obligations to the
Issuer under or in  connection  with the Purchase  Agreement  and the  Servicing
Agreement, and to exercise any and all rights,  remedies,  powers and privileges
lawfully  available  to the  Issuer  under or in  connection  with the  Purchase
Agreement and the Servicing  Agreement to the extent and in the manner  directed
by the  Indenture  Trustee,  as pledgee of the  Mortgage  Loans,  including  the
transmission  of notices of default on the part of the  Sellers or the  Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure  performance by the Sellers or the Servicer of each of their
obligations under the Purchase Agreement and the Servicing Agreement.

                                       39
<PAGE>

               (b)If an Event of Default shall have occurred and be  continuing,
the Indenture Trustee,  as pledgee of the Mortgage Loans,  subject to the rights
of the Enhancer under the Servicing Agreement,  may, and at the direction (which
direction  shall be in writing or by telephone  (confirmed  in writing  promptly
thereafter))  of the Noteholders of 66 2/3% of the aggregate Note Balance of the
Notes, shall, exercise all rights,  remedies,  powers,  privileges and claims of
the Issuer against the Sellers or the Servicer  under or in connection  with the
Purchase Agreement and the Servicing Agreement,  including the right or power to
take any action to compel or secure  performance or observance by the Sellers or
the  Servicer,  as the case may be, of each of their  obligations  to the Issuer
thereunder  and to give  any  consent,  request,  notice,  direction,  approval,
extension or waiver under the Purchase Agreement and the Servicing Agreement, as
the case may be,  and any right of the Issuer to take such  action  shall not be
suspended.  In connection therewith, as determined by the Indenture Trustee, the
Issuer  shall take all actions  necessary to effect the transfer of the Mortgage
Loans to the Indenture Trustee.

                                   ARTICLE VI

                              The Indenture Trustee

        Section 6.01  Duties of Indenture Trustee.
                      ---------------------------

               (a)If an Event of Default shall have occurred and be  continuing,
the Indenture  Trustee shall exercise the rights and powers vested in it by this
Indenture  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.

               (b)Except during the continuance of an Event of Default:

                      (i) the  Indenture  Trustee  undertakes  to  perform  such
        duties  and only  such  duties  as are  specifically  set  forth in this
        Indenture  and no implied  covenants or  obligations  shall be read into
        this Indenture against the Indenture Trustee; and

                      (ii)  in  the  absence  of bad  faith  on  its  part,  the
        Indenture  Trustee  may  conclusively  rely,  as to  the  truth  of  the
        statements and the correctness of the opinions expressed  therein,  upon
        certificates, reports or opinions furnished to the Indenture Trustee and
        conforming to the  requirements  of this Indenture;  provided,  however,
        that the Indenture Trustee shall examine the  certificates,  reports and
        opinions to determine whether or not they conform to the requirements of
        this Indenture.

               (c)The  Indenture  Trustee may not be relieved from liability for
its own negligent  action,  its own negligent  failure to act or its own willful
misconduct, except that:

               (i) this  paragraph does not limit the effect of paragraph (a) of
          this Section 6.01;

                      (ii) the  Indenture  Trustee  shall not be liable  for any
        error of judgment made in good faith by a Responsible  Officer unless it
        is proved that the Indenture  Trustee was negligent in ascertaining  the
        pertinent facts; and

                                       40
<PAGE>

                      (iii) the  Indenture  Trustee  shall  not be  liable  with
        respect  to any  action  it  takes  or  omits  to take in good  faith in
        accordance  with a direction  received by it pursuant to Section 5.11 or
        any  direction  from the Enhancer  that the Enhancer is entitled to give
        under any of the Basic Documents.

               (d)The Indenture  Trustee shall not be liable for interest on any
money  received by it except as the Indenture  Trustee may agree in writing with
the Issuer.

               (e)Money  held in  trust  by the  Indenture  Trustee  need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Trust Agreement.

               (f)No  provision of this  Indenture  shall  require the Indenture
Trustee to expend or risk its own funds or otherwise incur  financial  liability
in the  performance of any of its duties  hereunder or in the exercise of any of
its  rights or  powers,  if it shall have  reasonable  grounds  to believe  that
repayment of such funds or adequate  indemnity against such risk or liability is
not reasonably assured to it.

               (g)Every  provision of this Indenture  relating to the conduct or
affecting  the liability of or affording  protection  to the  Indenture  Trustee
shall be subject to the provisions of this Section and to the provisions of TIA.

               (h)With  respect  to  each  Payment  Date,  on the  Business  Day
following the related Determination Date, the Indenture Trustee shall forward or
cause to be forwarded by mail,  or other  mutually  agreed-upon  method,  to the
Enhancer and the Servicer,  a statement setting forth, to the extent applicable,
(i) during the Pre-Funding Period, the Pre-Funded Amount as of such Payment Date
and any  transfers  of funds  in  connection  therewith,  and  (ii)  during  the
Revolving Period,  the amount of Principal  Collections to be deposited into the
Funding Account  (including the Reserve  Sub-Account) in respect of such Payment
Date,  and the amount on deposit in the Funding  Account  (including the Reserve
Sub-Account)  as of such Payment  Date,  after  giving  effect to any amounts so
deposited therein.

               (i)The   Indenture   Trustee   hereby   accepts   appointment  as
Certificate Paying Agent under the Trust Agreement and agrees to be bound by the
provisions of the Trust Agreement  relating to the Certificate Paying Agent. The
Indenture  Trustee  hereby agrees to be bound by the provisions of Article IX of
the Trust Agreement.

               (j)The Indenture  Trustee shall not be required to take notice or
be deemed to have  notice or  knowledge  of any Event of Default  (except for an
Event of Default  specified in clause (a) of the  definition  thereof)  unless a
Responsible  Officer of the Indenture Trustee shall have received written notice
or have actual  knowledge  thereof.  In the absence of receipt of such notice or
such knowledge,  the Indenture Trustee may conclusively  assume that there is no
default or Event of Default.

               (k)The  Indenture  Trustee  shall  have  no  duty  to  see to any
recording  or  filing  of any  financing  statement  or  continuation  statement
evidencing  a  security  interest  or to  see  to the  maintenance  of any  such
recording or filing or to any rerecording or refiling of any thereof.

                                       41
<PAGE>

        Section 6.02  Rights of Indenture Trustee.
                      ---------------------------

               (a)The  Indenture  Trustee  may rely and  shall be  protected  in
acting or refraining  from acting in good faith upon any  resolution,  Officer's
Certificate,   opinion  of  counsel,  certificate  of  auditors,  or  any  other
certificate,  statement,  instrument,  report, notice, consent or other document
believed by it to be genuine and to have been signed or  presented by the proper
person.  The Indenture Trustee need not investigate any fact or matter stated in
any such document.

               (b)Before the Indenture  Trustee acts or refrains from acting, it
may require an Officer's  Certificate  or an Opinion of Counsel.  The  Indenture
Trustee  shall  not be liable  for any  action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.

               (c)The Indenture  Trustee may execute any of the trusts or powers
hereunder  or perform  any duties  hereunder  either  directly  or by or through
agents or attorneys or a custodian or nominee,  and the Indenture  Trustee shall
not be  responsible  for any misconduct or negligence on the part of, or for the
supervision of, any such agent,  attorney,  custodian or nominee  appointed with
due care by it hereunder.

               (d)The  Indenture  Trustee  shall not be liable for any action it
takes or omits to take in good  faith  which it  believes  to be  authorized  or
within its rights or powers;  provided,  however,  that the Indenture  Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.

               (e)The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters  relating to this  Indenture
and the Notes  shall be full and  complete  authorization  and  protection  from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.

               (f)The Indenture  Trustee shall not be personally  liable for any
action  taken,  suffered or omitted by it in good faith and believed by it to be
authorized  or within the  discretion or rights or powers  conferred  upon it by
this  Agreement,  unless  it shall be  proved  that the  Indenture  Trustee  was
negligent in ascertaining the pertinent facts.

               (g)Prior to the occurrence of an Event of Default hereunder,  and
after the curing or waiver of all Events of Default that may have occurred,  the
Indenture Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution,  certificate,  statement, instrument, opinion,
report,  notice,  request,  consent,  order,  approval,  bond or other  paper or
document,  unless  requested  in  writing  to do  so  by  the  Enhancer  or  the
Noteholders  representing  a majority of the aggregate  Note Balance;  provided,
however,  that if the payment within a reasonable time to the Indenture  Trustee
of the costs,  expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Indenture  Trustee,  not assured
to the  Indenture  Trustee by the  security  afforded to it by the terms of this
Indenture,  the  Indenture  Trustee may require  indemnity  satisfactory  to the
Indenture  Trustee  against  such cost,  expense or  liability as a condition to
taking any such action.

                                       42
<PAGE>

               (h)The Indenture Trustee shall be under no obligation to exercise
any of the  trusts or powers  vested in it by this  Agreement  or to  institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the  Enhancer or the  Noteholders,  pursuant to the
provisions of this Agreement,  unless the Enhancer or the Noteholders shall have
offered to the Indenture  Trustee  reasonable  security or indemnity against the
costs,  expenses  and  liabilities  which may be  incurred  therein or  thereby;
nothing  contained herein shall,  however,  relieve the Indenture Trustee of the
obligation, upon the occurrence of an Event of Default (which has not been cured
or  waived),  to  exercise  such of the rights  and powers  vested in it by this
Agreement,  and to use the same degree of care and skill in their  exercise as a
prudent investor would exercise or use under the circumstances in the conduct of
such investor's own affairs.

        Section 6.03  Individual  Rights of  Indenture  Trustee.  The  Indenture
Trustee in its  individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates  with the same
rights  it would  have if it were not  Indenture  Trustee.  Any Note  Registrar,
co-registrar or co-paying agent may do the same with like rights.  However,  the
Indenture Trustee must comply with Sections 6.11 and 6.12.

        Section 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be (i)  responsible  for and makes no  representation  as to the validity or
adequacy of this Indenture or the Notes,  (ii)  accountable for the Issuer's use
of the proceeds  from the Notes or (iii)  responsible  for any  statement of the
Issuer in this Indenture or in any document  issued in connection  with the sale
of the Notes or in the Notes, other than the Indenture Trustee's  certificate of
authentication thereon.

        Section  6.05 Notice of Event of Default.  If an Event of Default  shall
occur and be continuing,  and if such Event of Default is known to a Responsible
Officer of the Indenture  Trustee,  then the Indenture Trustee shall give notice
thereof to the  Enhancer.  The Indenture  Trustee shall mail to each  Noteholder
notice of such  Event of Default  within 90 days after it occurs.  Except in the
case of an Event of Default  with  respect to the  payment  of  principal  of or
interest on any Note,  the Indenture  Trustee may withhold such notice if and so
long as a committee of its  Responsible  Officers in good faith  determines that
withholding such notice is in the interests of the Noteholders.

        Section 6.06 Reports by Indenture Trustee to Noteholders.  The Indenture
Trustee shall deliver to each Noteholder such  information as may be required to
enable such  Noteholder to prepare its federal and state income tax returns.  In
addition, upon Issuer Request, the Indenture Trustee shall promptly furnish such
information  reasonably  requested by the Issuer that is reasonably available to
the  Indenture  Trustee to enable the Issuer to perform  its  federal  and state
income tax reporting obligations.

        Section 6.07 Compensation and Indemnity.  The Indenture Trustee shall be
compensated  and  indemnified by the Servicer in accordance with Section 6.06 of

                                       43
<PAGE>

the Servicing  Agreement.  All amounts owing the Indenture  Trustee hereunder in
excess of such amount,  as well as any amount owed to the  Indenture  Trustee in
accordance  with  Section  6.06 of the  Servicing  Agreement,  to the extent the
Servicer  has failed to pay such  amount,  shall be paid  solely as  provided in
Section 3.05 hereof (subject to the priorities set forth therein). The Indenture
Trustee's  compensation  shall not be  limited by any law on  compensation  of a
trustee of an express trust.  The Issuer shall  reimburse the Indenture  Trustee
for all  reasonable  out-of-pocket  expenses  incurred or made by it,  including
costs of  collection,  in addition to the  compensation  for its services.  Such
expenses shall include the reasonable compensation,  expenses, disbursements and
advances of the Indenture  Trustee's agents,  counsel,  accountants and experts.
The Issuer  shall  indemnify  the  Indenture  Trustee  against any and all loss,
liability or expense  (including  attorneys'  fees) incurred by it in connection
with  the  administration  of this  trust  and  the  performance  of its  duties
hereunder.  The Indenture  Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity.  Failure by the Indenture  Trustee to so notify
the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend any such claim, and the Indenture Trustee may have separate counsel
and the Issuer  shall pay the fees and expenses of such  counsel.  The Issuer is
not obligated to reimburse any expense or indemnify against any loss,  liability
or expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.

        The Issuer's  payment  obligations to the Indenture  Trustee pursuant to
this  Section  6.07 shall  survive the  discharge  of this  Indenture.  When the
Indenture  Trustee  incurs  expenses after the occurrence of an Event of Default
specified  in clause (c) or (d) of the  definition  thereof  with respect to the
Issuer,  such  expenses are intended to  constitute  expenses of  administration
under  Title 11 of the United  States  Code or any other  applicable  federal or
state bankruptcy, insolvency or similar law.

        Section 6.08 Replacement of Indenture Trustee. No resignation or removal
of the Indenture  Trustee and no  appointment of a successor  Indenture  Trustee
shall become  effective  until the  acceptance of  appointment  by the successor
Indenture  Trustee  pursuant to this Section  6.08.  The  Indenture  Trustee may
resign at any time by so notifying the Issuer and the Enhancer.  The Enhancer or
the  Noteholders  of a majority of the  aggregate  Note Balance of the Notes may
remove the  Indenture  Trustee by so  notifying  the  Indenture  Trustee and the
Enhancer (if given by such  Noteholders)  and may appoint a successor  Indenture
Trustee.  Unless  a  Servicer  Default  has  occurred  and  is  continuing,  the
appointment  of any  successor  Indenture  Trustee shall be subject to the prior
written approval of the Servicer.  The Issuer shall remove the Indenture Trustee
if:

               (a)the Indenture Trustee fails to comply with Section 6.11;

               (b)the Indenture Trustee is adjudged a bankrupt or insolvent;

     (c)a receiver or other public officer takes charge of the Indenture Trustee
or its property; or

               (d)the  Indenture   Trustee   otherwise   becomes   incapable  of
fulfilling its duties under the Basic Documents.

                                       44
<PAGE>

        If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the  Indenture  Trustee for any reason (the  Indenture  Trustee in
such event being  referred to herein as the  retiring  Indenture  Trustee),  the
Issuer shall promptly appoint a successor  Indenture Trustee with the consent of
the Enhancer, which consent shall not be unreasonably withheld. In addition, the
Indenture Trustee shall resign to avoid being directly or indirectly  controlled
by the Issuer.

        A successor  Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer.  Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture.  The successor  Indenture Trustee
shall mail a notice of its succession to the Noteholders. The retiring Indenture
Trustee shall promptly  transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

        If a successor  Indenture  Trustee  does not take office  within 60 days
after the retiring  Indenture  Trustee resigns or is removed,  then the retiring
Indenture Trustee, the Issuer or the Noteholders of a majority of aggregate Note
Balance of the Notes may petition any court of  competent  jurisdiction  for the
appointment of a successor Indenture Trustee.

        If the  Indenture  Trustee  fails  to  comply  with  Section  6.11,  any
Noteholder may petition any court of competent  jurisdiction  for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.

        Notwithstanding  the  replacement of the Indenture  Trustee  pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

        Section 6.09  Successor  Indenture  Trustee by Merger.  If the Indenture
Trustee  consolidates  with,  merges  or  converts  into,  or  transfers  all or
substantially all its corporate trust business or assets to, another corporation
or banking association, then the resulting,  surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such  corporation  or  banking  association  shall be  otherwise  qualified  and
eligible  under  Section 6.11.  The  Indenture  Trustee shall provide the Rating
Agencies with written notice of any such transaction occurring after the Closing
Date.

        If at  the  time  of  any  such  succession  by  merger,  conversion  or
consolidation, any of the Notes shall have been authenticated but not delivered,
then any such  successor to the Indenture  Trustee may adopt the  certificate of
authentication   of  any  predecessor   trustee,   and  deliver  such  Notes  so
authenticated.   If  at  such  time  any  of  the  Notes  shall  not  have  been
authenticated,  any successor to the  Indenture  Trustee may  authenticate  such
Notes  either  in the name of any  predecessor  hereunder  or in the name of the
successor to the Indenture  Trustee;  and in all such cases,  such  certificates
shall have the full force that it is anywhere in the Notes or in this  Indenture
provided that the certificate of the Indenture Trustee shall have.

     Section 6.10  Appointment  of  Co-Indenture  Trustee or Separate  Indenture
Trustee.

                                       45
<PAGE>

               (a)Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal  requirement of any  jurisdiction  in
which any part of the Trust  Estate may at such time be located,  the  Indenture
Trustee  shall have the power and may execute and  deliver  all  instruments  to
appoint one or more Persons to act as a co-trustee or  co-trustees,  or separate
trustee or separate  trustees,  of all or any part of the Issuer, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the Trust Estate,  or any part thereof,  and, subject to the other
provisions of this Section, such powers, duties, obligations,  rights and trusts
as the Indenture Trustee may consider  necessary or desirable.  No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor  trustee  under Section 6.11,  and no notice to  Noteholders  of the
appointment  of any  co-trustee  or separate  trustee  shall be  required  under
Section 6.08 hereof.

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

                      (i) all rights,  powers,  duties and obligations conferred
        or imposed upon the Indenture Trustee shall be conferred or imposed upon
        and  exercised or performed by the  Indenture  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
        Indenture  Trustee joining in such act), except to the extent that under
        any law of any  jurisdiction  in which any particular act or acts are to
        be performed the Indenture  Trustee shall be  incompetent or unqualified
        to perform such act or acts, in which event such rights,  powers, duties
        and  obligations  (including the holding of title to the Trust Estate 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 Indenture Trustee;

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

     (iii) the Indenture  Trustee may at any time accept the  resignation  of or
remove any separate trustee or co-trustee.

               (c)Any  notice,  request or other  writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and  co-trustees,  as effectively as if given to each of them.  Every instrument
appointing any separate  trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. 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
Indenture Trustee or separately,  as may be provided therein, subject to all the
provisions of this  Indenture,  specifically  including  every provision of this
Indenture  relating to the conduct of,  affecting the liability of, or affording
protection to, the Indenture Trustee.  Every such instrument shall be filed with
the Indenture Trustee.

               (d)Any separate  trustee or co-trustee may at any time constitute
the  Indenture  Trustee,  its  agent or  attorney-in-fact  with  full  power and

                                       46
<PAGE>

authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture 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 Indenture Trustee,  to the extent permitted by law, without the
appointment of a new or successor trustee.

        Section 6.11 Eligibility;  Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a).  The Indenture  Trustee
shall have a combined  capital and surplus of at least  $50,000,000 as set forth
in its most recent  published  annual  report of condition  and it or its parent
shall have a  long-term  debt rating of A or better by  Moody's.  The  Indenture
Trustee  shall comply with TIA ss.  310(b),  including  the  optional  provision
permitted by the second sentence of TIA ss. 310(b)(9);  provided,  however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures  under which other  securities of the Issuer are  outstanding  if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.

        Section 6.12  Preferential  Collection  of Claims  Against  Issuer.  The
Indenture  Trustee  shall  comply with TIA ss.  311(a),  excluding  any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee that has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

     Section 6.13  Representations and Warranties.  The Indenture Trustee hereby
represents and warrants that:

               (a)The Indenture Trustee is duly organized,  validly existing and
in good standing as a national  banking  association with power and authority to
own its properties and to conduct its business as such  properties are currently
owned and such business is currently conducted.

               (b)The  Indenture  Trustee has the power and authority to execute
and  deliver  this  Indenture  and to carry out its  terms;  and the  execution,
delivery and  performance  of this  Indenture  have been duly  authorized by the
Indenture Trustee by all necessary corporate action.

               (c)The  consummation  of the  transactions  contemplated  by this
Indenture and the  fulfillment of the terms hereof do not conflict with,  result
in any  breach of any of the terms and  provisions  of, or  constitute  (with or
without notice or lapse of time) a default under,  the articles of  organization
or bylaws of the Indenture Trustee or any agreement or other instrument to which
the Indenture Trustee is a party or by which it is bound.

               (d)To  the  Indenture  Trustee's  best  knowledge,  there  are no
Proceedings or investigations pending or threatened before any court, regulatory
body,  administrative  agency  or  other  governmental   instrumentality  having
jurisdiction  over the  Indenture  Trustee or its  properties  (A) asserting the
invalidity of this Indenture,  (B) seeking to prevent the consummation of any of
the transactions contemplated by this Indenture or (C) seeking any determination
or ruling that might  materially  and adversely  affect the  performance  by the
Indenture  Trustee of its obligations  under, or the validity or  enforceability
of, this Indenture.

                                       47
<PAGE>

               (e)The  Indenture  Trustee  does not have  notice of any  adverse
claim (as such terms are used in Section 8-302 of the UCC in effect in the State
of Delaware) with respect to the Mortgage Loans.

     Section 6.14  Directions to Indenture  Trustee.  The  Indenture  Trustee is
hereby directed:

     (a)to  accept the pledge of the  Mortgage  Loans and hold the assets of the
Trust in trust for the Noteholders and the Enhancer;

               (b)to  authenticate  and deliver the Notes  substantially  in the
form prescribed by Exhibit A in accordance with the terms of this Indenture; and

               (c)to take all other  actions as shall be required to be taken by
the terms of this Indenture.

        Section  6.15  Indenture  Trustee  May  Own  Securities.  The  Indenture
Trustee,  in its  individual  or any other  capacity,  may  become  the owner or
pledgee  of  Securities  with  the  same  rights  it  would  have if it were not
Indenture Trustee.

                                   ARTICLE VII

                         Noteholders' Lists and Reports

     Section 7.01 Issuer to Furnish  Indenture  Trustee  Names and  Addresses of
Noteholders.

     The Issuer shall furnish or cause to be furnished to the Indenture  Trustee
(a) not more than five days after each Record Date, a list,  in such form as the
Indenture  Trustee may  reasonably  require,  of the names and  addresses of the
Noteholders as of such Record Date, and (b) at such other times as the Indenture
Trustee and the Enhancer may request in writing, within 30 days after receipt by
the Issuer of any such request,  a list of similar form and content as of a date
not more  than 10 days  prior  to the time  such  list is  furnished;  provided,
however,  that for so long as the Indenture  Trustee is the Note  Registrar,  no
such list need be furnished.

       Section 7.02  Preservation of Information; Communications to Noteholders.

               (a)The Indenture Trustee shall preserve,  in as current a form as
is reasonably practicable,  the names and addresses of the Noteholders contained
in the most  recent  list  furnished  to the  Indenture  Trustee as  provided in
Section  7.01 and the names and  addresses  of the  Noteholders  received by the
Indenture  Trustee in its capacity as Note Registrar.  The Indenture Trustee may
destroy any list  furnished  to it as provided in such Section 7.01 upon receipt
of a new list so furnished.

               (b)Noteholders  may  communicate  pursuant to TIA ss. 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.

               (c)The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).

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<PAGE>

        Section 7.03  Reports by Issuer.
                      -----------------

               (a)The Issuer shall:

                      (i) file with the Indenture Trustee,  within 15 days after
        the Issuer is required to file the same with the  Commission,  copies of
        the annual reports and the information,  documents and other reports (or
        copies of such  portions of any of the foregoing as the  Commission  may
        from time to time by rules and  regulations  prescribe)  that the Issuer
        may be  required to file with the  Commission  pursuant to Section 13 or
        15(d) of the Exchange Act;

                      (ii) file with the Indenture  Trustee and the  Commission,
        in accordance with rules and regulations prescribed from time to time by
        the Commission, such additional information,  documents and reports with
        respect to compliance by the Issuer with the conditions and covenants of
        this  Indenture  as may be required  from time to time by such rules and
        regulations; and

                      (iii) supply to the  Indenture  Trustee (and the Indenture
        Trustee shall transmit by mail to all  Noteholders  described in TIA ss.
        313(c))  such  summaries  of  any  information,  documents  and  reports
        required  to be filed by the Issuer  pursuant to clauses (i) and (ii) of
        this Section 7.03(a) and by rules and  regulations  prescribed from time
        to time by the Commission.

               (b)Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.

        Section  7.04  Reports by  Indenture  Trustee.  If  required  by TIA ss.
313(a), within 60 days after each January 1, beginning with January 1, 2003, the
Indenture Trustee shall make available to each Noteholder as required by TIA ss.
313(c) and to the Enhancer a brief  report  dated as of such date that  complies
with TIA ss.  313(a).  The  Indenture  Trustee  also shall  comply  with TIA ss.
313(b).

        A copy of each  report at the time of its  distribution  to  Noteholders
shall be filed by the Indenture  Trustee with the Commission,  if required,  and
each stock  exchange,  if any,  on which the Term Notes are  listed.  The Issuer
shall notify the Indenture  Trustee if and when the Term Notes are listed on any
stock exchange.

                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

        Section 8.01 Collection of Money. Except as otherwise expressly provided
herein,  the  Indenture  Trustee may demand  payment or  delivery  of, and shall
receive and collect,  directly and without  intervention  or  assistance  of any
fiscal agent or other  intermediary,  all money and other property payable to or
receivable by the Indenture  Trustee  pursuant to this Indenture.  The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture,  if any default occurs

                                       49
<PAGE>

in the making of any payment or  performance  under any  agreement or instrument
that is part of the Trust Estate,  the Indenture Trustee may take such action as
may be  appropriate  to enforce  such  payment  or  performance,  including  the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

        Section 8.02  Trust Accounts.

               (a)On or prior to the Closing  Date,  the Issuer  shall cause the
Indenture  Trustee  to  establish  and  maintain,  in the name of the  Indenture
Trustee,  for the benefit of the Noteholders,  the Certificate  Paying Agent, on
behalf of the Certificateholders,  and the Enhancer, the Note Payment Account as
provided in Section 3.01 of this Indenture and the Reserve Sub-Account.

               (b)All  monies  deposited  from time to time in the Note  Payment
Account pursuant to the Servicing Agreement and all deposits therein pursuant to
this Indenture are for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the  Certificateholders,  and all investments made with such
monies,  including all income or other gain from such  investments,  are for the
benefit of the Servicer as provided in Section 5.01 of the Servicing Agreement.

        On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Note  Payment  Account  to the  Noteholders  in respect of the
Notes   and,   in  its   capacity   as   Certificate   Paying   Agent,   to  the
Certificateholders  from the  Distribution  Account in the order of priority set
forth in Section 3.05 (except as otherwise  provided in Section  5.04(b)) and in
accordance with the Servicing Certificate.

        All  monies  deposited  from  time to time  in the  Reserve  Sub-Account
pursuant  to this  Indenture  are for the  benefit  of the  Noteholders  and the
Enhancer,  and all  investments  made with such monies,  including all income or
other gain from such investments, are for the benefit of the Noteholders.

        The Indenture Trustee shall invest any funds in the Note Payment Account
and the Reserve Sub-Account in Permitted  Investments selected in writing by the
Servicer  maturing no later than the Business Day preceding the next  succeeding
Payment Date (except that any investment in the institution  with which the Note
Payment  Account is maintained may mature on such Payment Date) and shall not be
sold  or  disposed  of  prior  to the  maturity.  In  addition,  such  Permitted
Investments  shall not be purchased  at a price in excess of par. The  Indenture
Trustee shall have no liability  whatsoever for  investment  losses on Permitted
Investments,  if such  investments are made in accordance with the provisions of
this Indenture and the Indenture  Trustee is not the obligor under the Permitted
Investment.

        Section 8.03 Officer's Certificate.  The Indenture Trustee shall receive
at least seven  days'  notice  when  requested  by the Issuer to take any action
pursuant to Section  8.05(a),  accompanied  by copies of any  instruments  to be
executed,  and the Indenture Trustee shall also require,  as a condition to such
action,  an Officer's  Certificate,  in form and substance  satisfactory  to the
Indenture  Trustee,  stating the legal effect of any such action,  outlining the
steps  required  to  complete  the  same,  and  concluding  that all  conditions
precedent to the taking of such action have been complied with.

                                       50
<PAGE>

        Section  8.04  Termination  Upon   Distribution  to  Noteholders.   This
Indenture and the respective  obligations and responsibilities of the Issuer and
the Indenture  Trustee created hereby shall  terminate upon the  distribution to
the   Noteholders,   the   Certificate   Paying   Agent   on   behalf   of   the
Certificateholders  and the  Indenture  Trustee of all  amounts  required  to be
distributed pursuant to Article III; provided,  however,  that in no event shall
the trust created  hereby  continue  beyond 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.

        Section 8.05  Release of Trust Estate.
                      -----------------------

               (a)Subject   to  the   payment   of  its   fees,   expenses   and
indemnification,  the Indenture Trustee may, and when required by the provisions
of this  Indenture or the Servicing  Agreement,  shall,  execute  instruments to
release  property  from the lien of this  Indenture,  or  convey  the  Indenture
Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent  with the provisions of this  Indenture.  No Person relying upon an
instrument  executed  by the  Indenture  Trustee as  provided  in  Article  VIII
hereunder shall be bound to ascertain the Indenture Trustee's authority, inquire
into the satisfaction of any conditions precedent,  or see to the application of
any monies.

               (b)The Indenture  Trustee shall, at such time as (i) there are no
Notes  Outstanding,  (ii) all sums due the  Indenture  Trustee  pursuant to this
Indenture  have been paid and (iii) all sums due the  Enhancer  have been  paid,
release any  remaining  portion of the Trust  Estate that secured the Notes from
the lien of this Indenture.

               (c)The Indenture  Trustee shall release property from the lien of
this  Indenture  pursuant to this  Section  8.05 only upon  receipt of an Issuer
Request  accompanied by an Officers'  Certificate and a letter from the Enhancer
stating that the Enhancer has no objection to such request from the Issuer.

               (d)The  Indenture  Trustee shall, at the request of the Issuer or
the Depositor, surrender the Policy to the Enhancer for cancellation, upon final
payment of principal of and interest on the Notes.

        Section 8.06 Surrender of Notes Upon Final Payment. By acceptance of any
Note,  the  Noteholder  thereof  agrees to surrender  such Note to the Indenture
Trustee  promptly,  prior to such  Noteholder's  receipt  of the  final  payment
thereon.

                                       51
<PAGE>

                                   ARTICLE IX

                             Supplemental Indentures

        Section 9.01  Supplemental Indentures Without Consent of Noteholders.
                      ------------------------------------------------------

               (a)Without the consent of the Noteholders of any Notes,  but with
prior  notice to the  Rating  Agencies  and the  prior  written  consent  of the
Enhancer (which consent shall not be unreasonably withheld),  unless an Enhancer
Default  shall  have  occurred,  the  Issuer  and the  Indenture  Trustee,  when
authorized by an Issuer  Request,  at any time and from time to time,  may enter
into one or more  indentures  supplemental  hereto  (which shall  conform to the
provisions  of the Trust  Indenture Act as in force at the date of the execution
thereof),  in  form  satisfactory  to  the  Indenture  Trustee,  for  any of the
following purposes:

                      (i) to correct or amplify the  description of any property
        at any time subject to the lien of this Indenture,  or better to assure,
        convey and confirm unto the  Indenture  Trustee any property  subject or
        required to be subjected to the lien of this Indenture, or to subject to
        the lien of this Indenture additional property;

                      (ii) to evidence the  succession,  in compliance  with the
        applicable  provisions  hereof, of another Person to the Issuer, and the
        assumption  by any such  successor of the covenants of the Issuer herein
        and in the Notes contained;

               (iii) to add to the  covenants of the Issuer,  for the benefit of
          the  Noteholders  or the Enhancer,  or to surrender any right or power
          herein conferred upon the Issuer;

               (iv) to convey, transfer, assign, mortgage or pledge any property
          to or with the Indenture Trustee;

                      (v) to cure any  ambiguity,  to  correct  any  error or to
        correct  or  supplement  any  provision  herein  or in any  supplemental
        indenture that may be inconsistent with any other provision herein or in
        any supplemental indenture;

                      (vi) to make any other  provisions with respect to matters
        or  questions  arising  under  this  Indenture  or in  any  supplemental
        indenture; provided, that such action shall not materially and adversely
        affect the interests of the Noteholders or the Enhancer (as evidenced by
        an Opinion of Counsel);

                      (vii) to evidence  and provide for the  acceptance  of the
        appointment  hereunder by a successor  trustee with respect to the Notes
        and to add to or change any of the provisions of this Indenture as shall
        be necessary to facilitate the administration of the trusts hereunder by
        more than one trustee, pursuant to the requirements of Article VI; or

                      (viii) to modify,  eliminate or add to the  provisions  of
        this  Indenture  to such  extent as shall be  necessary  to  effect  the
        qualification  of this Indenture  under TIA or under any similar federal
        statute  hereafter  enacted  and to add to  this  Indenture  such  other
        provisions as may be expressly required by TIA;

                                       52
<PAGE>

provided,  however,  that no such  supplemental  indenture shall be entered into
unless the  Indenture  Trustee  shall have received an Opinion of Counsel to the
effect that the execution of such  supplemental  indenture will not give rise to
any material adverse tax consequence to the Noteholders.

        The Indenture  Trustee is hereby  authorized to join in the execution of
any such supplemental  indenture and to make any further appropriate  agreements
and stipulations that may be therein contained.

               (b)The Issuer and the Indenture  Trustee,  when  authorized by an
Issuer Request, may, without the consent of any Noteholder but with prior notice
to the Rating  Agencies and the Enhancer,  enter into an indenture or indentures
supplemental  hereto for the purpose of adding any provisions to, or changing in
any  manner or  eliminating  any of the  provisions  of,  this  Indenture  or of
modifying  in any  manner the rights of the  Noteholders  under this  Indenture;
provided,  however,  that such action  shall not, as  evidenced by an Opinion of
Counsel,  (i)  adversely  affect in any  material  respect the  interests of any
Noteholder  or the  Enhancer or (ii) cause the Issuer to be subject to an entity
level tax.

        Section 9.02  Supplemental  Indentures With Consent of Noteholders.  The
Issuer and the Indenture  Trustee,  when authorized by an Issuer  Request,  may,
with prior  notice to the Rating  Agencies  and with the consent of the Enhancer
and the  Noteholders  of not less than a majority  of the Note  Balances of each
Class of Notes affected thereby,  by Act (as defined in Section 10.03 hereof) of
such Noteholders  delivered to the Issuer and the Indenture Trustee,  enter into
an indenture  or  indentures  supplemental  hereto for the purpose of adding any
provisions  to, or changing in any manner or  eliminating  any of the provisions
of, this  Indenture or of modifying in any manner the rights of the  Noteholders
under this Indenture;  provided,  however,  that no such supplemental  indenture
shall, without the consent of the Noteholder of each Note affected thereby:

               (a)change the date of payment of any  installment of principal of
or interest on any Note, or reduce the principal amount thereof or the Note Rate
thereon,  change the provisions of this Indenture relating to the application of
collections  on, or the  proceeds of the sale of, the Trust Estate to payment of
principal of or interest on the Notes,  or change any place of payment where, or
the coin or currency in which, any Note or the interest  thereon is payable,  or
impair the right to institute suit for the enforcement of the provisions of this
Indenture requiring the application of funds available therefor,  as provided in
Article V, to the  payment  of any such  amount due on the Notes on or after the
respective due dates thereof;

               (b)reduce  the  percentage  of the Note  Balances of any Class of
Notes,  the  consent  of the  Noteholders  of  which  is  required  for any such
supplemental  indenture,  or the consent of the Noteholders of which is required
for any waiver of  compliance  with  certain  provisions  of this  Indenture  or
certain  defaults  hereunder  and  their  consequences   provided  for  in  this
Indenture;

                                       53
<PAGE>

     (c)modify or alter the  provisions of the proviso to the  definition of the
term  "Outstanding"  or modify or alter the  exception in the  definition of the
term "Noteholder";

               (d)reduce the  percentage  of the  aggregate  Note Balance of the
Notes  required to direct the Indenture  Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.04;

               (e)modify  any  provision of this Section 9.02 except to increase
any percentage specified herein or to provide that certain additional provisions
of this  Indenture  or the other  Basic  Documents  cannot be modified or waived
without the consent of the Noteholder of each Note affected thereby;

               (f)modify any of the  provisions of this Indenture in such manner
as to affect  the  calculation  of the  amount of any  payment  of  interest  or
principal due on any Note on any Payment Date  (including the calculation of any
of the individual components of such calculation); or

               (g)permit  the  creation  of any  lien  ranking  prior to or on a
parity  with the lien of this  Indenture  with  respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated  herein,  terminate the
lien of this Indenture on any property at any time subject hereto or deprive the
Noteholder of any Note of the security  provided by the lien of this  Indenture;
and provided further,  that such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer to be subject to an entity level tax.

        The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive  upon the Noteholders of all Notes,  whether  theretofore or
thereafter  authenticated and delivered  hereunder.  The Indenture Trustee shall
not be liable for any such determination made in good faith.

        It shall not be  necessary  for any Act (as  defined  in  Section  10.03
hereof) of Noteholders under this Section 9.02 to approve the particular form of
any proposed  supplemental  indenture,  but it shall be  sufficient  if such Act
shall approve the substance thereof.

        Promptly after the execution by the Issuer and the Indenture  Trustee of
any supplemental  indenture pursuant to this Section 9.02, the Indenture Trustee
shall  mail  to  the  Noteholders  of the  Notes  to  which  such  amendment  or
supplemental  indenture  relates a notice  setting  forth in  general  terms the
substance of such supplemental  indenture.  Any failure of the Indenture Trustee
to mail such  notice,  or any defect  therein,  shall not,  however,  in any way
impair or affect the validity of any such supplemental indenture.

        Section 9.03  Execution of  Supplemental  Indentures.  In executing,  or
permitting  the  additional  trusts  created  by,  any  supplemental   indenture
permitted by this Article IX or the  modification  thereby of the trusts created
by this  Indenture,  the  Indenture  Trustee  shall be entitled to receive  and,
subject to Sections 6.01 and 6.02,  shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental  indenture is
authorized or permitted by this Indenture.  The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture  Trustee's own rights,  duties,  liabilities or immunities  under this
Indenture or otherwise.

                                       54
<PAGE>

        Section 9.04 Effect of Supplemental Indenture. Upon the execution of any
supplemental  indenture pursuant to the provisions hereof,  this Indenture shall
be and shall be deemed to be modified and amended in accordance  therewith  with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations,  duties, liabilities and immunities under this Indenture of
the  Indenture  Trustee,  the Issuer and the  Noteholders  shall  thereafter  be
determined,  exercised  and enforced  hereunder  subject in all respects to such
modifications  and  amendments,  and all the  terms and  conditions  of any such
supplemental  indenture  shall  be and be  deemed  to be part of the  terms  and
conditions of this Indenture for any and all purposes.

        Section 9.05  Conformity  with Trust  Indenture Act. Every  amendment of
this  Indenture  and every  supplemental  indenture  executed  pursuant  to this
Article IX shall conform to the  requirements of TIA as in effect at the time of
such amendment or supplement so long as this  Indenture  shall then be qualified
under TIA.

        Section  9.06  Reference  in Notes  to  Supplemental  Indentures.  Notes
authenticated  and delivered after the execution of any  supplemental  indenture
pursuant  to this  Article IX may,  and if required  by the  Indenture  Trustee,
shall,  bear a notation  in form  approved  by the  Indenture  Trustee as to any
matter  provided  for in  such  supplemental  indenture.  If the  Issuer  or the
Indenture  Trustee shall so determine,  new Notes so modified as to conform,  in
the opinion of the Indenture  Trustee and the Issuer,  to any such  supplemental
indenture  may be  prepared  and  executed by the Issuer and  authenticated  and
delivered by the Indenture Trustee in exchange for Outstanding Notes.

                                    ARTICLE X

                                  Miscellaneous

        Section 10.01 Compliance Certificates and Opinions, etc.
                      -----------------------------------------

               (a)Upon any application or request by the Issuer to the Indenture
Trustee to take any action  under any  provision of this  Indenture,  the Issuer
shall  furnish to the  Indenture  Trustee and to the  Enhancer  (i) an Officer's
Certificate stating that all conditions precedent,  if any, provided for in this
Indenture  relating to the proposed  action have been  complied with and (ii) an
Opinion  of  Counsel  stating  that in the  opinion  of such  counsel  all  such
conditions precedent,  if any, have been complied with, except that, in the case
of any such  application or request as to which the furnishing of such documents
is  specifically  required by any  provision of this  Indenture,  no  additional
certificate or opinion need be furnished.

        Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:

                                       55
<PAGE>

                      (i) a statement that each signatory of such certificate or
        opinion has read or has caused to be read such covenant or condition and
        the definitions herein relating thereto;

                      (ii) a brief  statement  as to the nature and scope of the
        examination  or  investigation  upon which the  statements  or  opinions
        contained in such certificate or opinion are based;

                      (iii) a  statement  that,  in the  opinion  of  each  such
        signatory,  such signatory has made such examination or investigation as
        is necessary to enable such signatory to express an informed  opinion as
        to whether or not such covenant or condition has been complied with;

               (iv) a  statement  as to  whether,  in the  opinion  of each such
          signatory, such condition or covenant has been complied with; and

                      (v) if the  signer  of  such  certificate  or  opinion  is
        required to be Independent,  the statement required by the definition of
        the term "Independent".

               (b)(i) Prior to the deposit of any  Collateral or other  property
or securities  with the  Indenture  Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer  shall,  in addition  to any  obligation  imposed in Section  10.01(a) or
elsewhere  in this  Indenture,  furnish to the  Indenture  Trustee an  Officer's
Certificate  certifying  or stating  the  opinion of each  person  signing  such
certificate  as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.

                      (ii)  Whenever  the Issuer is  required  to furnish to the
        Indenture  Trustee an Officer's  Certificate  certifying  or stating the
        opinion of any signer thereof as to the matters  described in clause (i)
        above,  the  Issuer  shall  also  deliver  to the  Indenture  Trustee an
        Independent Certificate as to the same matters, if the fair value to the
        Issuer  of the  securities  to be so  deposited  and of all  other  such
        securities  made the basis of any such  withdrawal  or release since the
        commencement of the then-current fiscal year of the Issuer, as set forth
        in the  certificates  delivered  pursuant  to clause  (i) above and this
        clause (ii), is 10% or more of the aggregate  Note Balance of the Notes,
        but  such a  certificate  need  not be  furnished  with  respect  to any
        securities so deposited,  if the fair value thereof to the Issuer as set
        forth in the related Officer's  Certificate is less than $25,000 or less
        than one percent of the aggregate Note Balance of the Notes.

                      (iii)  Whenever  any  property  or  securities  are  to be
        released  from the lien of this  Indenture,  the Issuer shall furnish to
        the Indenture Trustee an Officer's Certificate certifying or stating the
        opinion of each person  signing  such  certificate  as to the fair value
        (within 90 days of such release) of the property or securities  proposed
        to be  released  and  stating  that in the  opinion  of such  person the
        proposed  release will not impair the security  under this  Indenture in
        contravention of the provisions hereof.

                                       56
<PAGE>

                      (iv)  Whenever  the Issuer is  required  to furnish to the
        Indenture  Trustee an Officer's  Certificate  certifying  or stating the
        opinion of any  signer  thereof as to the  matters  described  in clause
        (iii) above,  the Issuer shall also furnish to the Indenture  Trustee an
        Independent  Certificate as to the same matters if the fair value of the
        property or securities and of all other property, other than property as
        contemplated by clause (v) below or securities released from the lien of
        this Indenture since the commencement of the then-current calendar year,
        as set forth in the certificates required by clause (iii) above and this
        clause  (iv),  equals 10% or more of the  aggregate  Note Balance of the
        Notes,  but such  certificate  need not be  furnished in the case of any
        release of property or securities if the fair value thereof as set forth
        in the related  Officer's  Certificate is less than $25,000 or less than
        one percent of the aggregate Note Balance of the Notes.

                      (v) Notwithstanding  any provision of this Indenture,  the
        Issuer  may,  without  compliance  with the  requirements  of the  other
        provisions of this Section  10.01,  (A) collect upon,  sell or otherwise
        dispose of the Mortgage Loans as and to the extent permitted or required
        by the Basic Documents or (B) make cash payments out of the Note Payment
        Account  as  and  to the  extent  permitted  or  required  by the  Basic
        Documents,  so long as the Issuer shall deliver to the Indenture Trustee
        every six months, commencing December 31, 2002, an Officer's Certificate
        of the Issuer stating that all the dispositions of Collateral  described
        in clauses  (A) or (B) above that  occurred  during  the  preceding  six
        calendar  months (or such longer  period,  in the case of the first such
        Officer's  Certificate)  were in the  ordinary  course  of the  Issuer's
        business and that the proceeds  thereof were applied in accordance  with
        the Basic Documents.

        Section 10.02 Form of Documents Delivered to Indenture Trustee.
                      ------------------------------------------------

        In any case where  several  matters are required to be certified  by, or
covered by an opinion of, any specified  Person,  it is not  necessary  that all
such  matters  be  certified  by, or covered by the  opinion  of,  only one such
Person,  or that they be so certified or covered by only one  document,  but one
such Person may certify or give an opinion  with respect to some matters and one
or more other such Persons as to other matters,  and any such Person may certify
or give an opinion as to such matters in one or several documents.

        Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which his  certificate  or opinion is based are
erroneous.  Any such certificate of an Authorized  Officer or Opinion of Counsel
may be based,  insofar as it relates to factual  matters,  upon a certificate or
opinion of, or  representations  by, an officer or officers of either  Seller or
the Issuer, stating that the information with respect to such factual matters is
in the possession of either Seller or the Issuer,  unless such counsel knows, or
in the exercise of reasonable  care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.

                                       57
<PAGE>

        Where any  Person  is  required  to make,  give or  execute  two or more
applications,  requests, consents,  certificates,  statements, opinions or other
instruments  under this Indenture,  they may, but need not, be consolidated  and
form one instrument.

        Whenever  in this  Indenture,  in  connection  with any  application  or
certificate or report to the Indenture  Trustee,  it is provided that the Issuer
shall  deliver any document as a condition of the granting of such  application,
or as evidence of the Issuer's  compliance with any term hereof,  it is intended
that the truth and accuracy,  at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and  opinions  stated in such  document  shall in such case be  conditions
precedent to the right of the Issuer to have such application  granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,  be
construed  to affect the  Indenture  Trustee's  right to rely upon the truth and
accuracy of any statement or opinion  contained in any such document as provided
in Article VI.

        Section 10.03 Acts of Noteholders.
                      -------------------

               (a)Any  request,  demand,   authorization,   direction,   notice,
consent,  waiver or other action provided by this Indenture to be given or taken
by  Noteholders  may be embodied in and evidenced by one or more  instruments of
substantially  similar tenor signed by such  Noteholders  in person or by agents
duly appointed in writing;  and except as herein  otherwise  expressly  provided
such action shall become  effective  when such  instrument  or  instruments  are
delivered to the Indenture Trustee,  and, where it is hereby expressly required,
to the Issuer.  Such instrument or instruments  (and the action embodied therein
and  evidenced  thereby)  are herein  sometimes  referred to as the "Act" of the
Noteholders  signing such instrument or  instruments.  Proof of execution of any
such  instrument or of a writing  appointing  any such agent shall be sufficient
for any purpose of this  Indenture and (subject to Section  6.01)  conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section 10.03.

               (b)The fact and date of the  execution  by any person of any such
instrument  or writing  may be proved in any manner that the  Indenture  Trustee
deems sufficient.

               (c)The ownership of Notes shall be proved by the Note Register.

               (d)Any  request,  demand,   authorization,   direction,   notice,
consent,  waiver or other  action by the  Noteholder  of any Note shall bind the
Noteholder  of every Note  issued upon the  registration  thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Issuer in reliance  thereon,  whether or
not notation of such action is made upon such Note.

        Section 10.04 Notices, etc., to Indenture Trustee,  Issuer, Enhancer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of  Noteholders or other  documents  provided or permitted by this
Indenture  shall  be in  writing  and if such  request,  demand,  authorization,
direction,  notice,  consent,  waiver or Act of  Noteholders is to be made upon,
given or furnished to or filed with:

               (a)the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given,  furnished or filed in

                                       58
<PAGE>

writing to or with the Indenture  Trustee at its  Corporate  Trust Office with a
copy to Wells Fargo Bank Minnesota,  N.A.,  9062 Old Annapolis  Road,  Columbia,
Maryland  21045-1951,  Attention:  Corporate Trust Services - GMACM -- 2002-HE3.
The Indenture Trustee shall promptly transmit any notice received by it from the
Noteholders to the Issuer,

               (b)the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed  first-class,
postage  prepaid to the  Issuer  addressed  to:  GMACM  Home  Equity  Loan Trust
2002-HE3,  in care of the  Owner  Trustee,  or at any other  address  previously
furnished in writing to the  Indenture  Trustee by the Issuer.  The Issuer shall
promptly  transmit  any  notice  received  by it  from  the  Noteholders  to the
Indenture Trustee, or

               (c)the  Enhancer by the Issuer,  the Indenture  Trustee or by any
Noteholders  shall be sufficient  for every purpose  hereunder to in writing and
mailed,  first-class postage pre-paid, or personally delivered or telecopied to:
MBIA Insurance Corporation,  113 King Street, Armonk, New York 10504, Attention:
Insured Portfolio  Management - Structured Finance (GMACM Home Equity Loan Trust
2002-HE3),  telecopier  number  (800)  787-1311.  The  Enhancer  shall  promptly
transmit any notice received by it from the Issuer, the Indenture Trustee or the
Noteholders to the Issuer or Indenture Trustee, as the case may be.

        Notices  required to be given to the Rating Agencies by the Issuer,  the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified  mail,  return receipt  requested,  to (i) in the case of
Fitch,  at the following  address:  Fitch Ratings,  One State Street Plaza,  New
York, New York 10004, Attention: Residential Mortgage Group, (ii) in the case of
Moody's,  at  the  following  address:  Moody's  Investors  Service,  Inc.,  ABS
Monitoring  Department,  99 Church Street, New York, New York 10007 and (iii) in
the case of Standard & Poor's, at the following  address:  Standard & Poor's, 26
Broadway,  15th  Floor,  New  York,  New York  10004,  Attention:  Asset  Backed
Surveillance Department;  or, as to each of the foregoing Persons, at such other
address as shall be designated by written notice to the other foregoing Persons.

        Section  10.05  Notices to  Noteholders;  Waiver.  Where this  Indenture
provides  for  notice  to  Noteholders  of  any  event,  such  notice  shall  be
sufficiently  given (unless  otherwise herein expressly  provided) if in writing
and mailed,  first-class,  postage prepaid to each  Noteholder  affected by such
event,  at such Person's  address as it appears on the Note Register,  not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither  the  failure to mail such notice nor any defect in any notice so mailed
to any particular  Noteholder  shall affect the  sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall  conclusively  be presumed to have been duly given  regardless of
whether such notice is in fact actually received.

        Where this Indenture provides for notice in any manner,  such notice may
be waived in writing by any Person  entitled  to  receive  such  notice,  either
before or after the  event,  and such  waiver  shall be the  equivalent  of such
notice.  Waivers  of notice by  Noteholders  shall be filed  with the  Indenture
Trustee,  but such filing shall not be a condition  precedent to the validity of
any action taken in reliance upon such a waiver.

                                       59
<PAGE>

        In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity,  it shall be impractical to mail
notice of any event to  Noteholders  when such  notice is  required  to be given
pursuant  to any  provision  of this  Indenture,  then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.

        Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice  shall not affect any other  rights or  obligations  created
hereunder, and shall not under any circumstance constitute an Event of Default.

        Section 10.06 Alternate Payment and Notice  Provisions.  Notwithstanding
any provision of this Indenture or any of the Notes to the contrary,  the Issuer
may enter  into any  agreement  with any  Noteholder  providing  for a method of
payment,  or  notice  by the  Indenture  Trustee  to  such  Noteholder,  that is
different  from the methods  provided for in this Indenture for such payments or
notices.  The Issuer shall furnish to the Indenture  Trustee a copy of each such
agreement and the Indenture  Trustee shall cause payments to be made and notices
to be given in accordance with such agreements.

        Section 10.07 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this  Indenture by any of the  provisions  of TIA,  such required
provision shall control.

        The  provisions of TIA ss.ss.  310 through 317 that impose duties on any
Person  (including the provisions  automatically  deemed  included herein unless
expressly  excluded by this  Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

        Section  10.08  Effect of  Headings.  The Article  and Section  headings
herein are for convenience only and shall not affect the construction hereof.

        Section 10.09  Successors  and Assigns.  All covenants and agreements in
this  Indenture  and the  Notes by the  Issuer  shall  bind its  successors  and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.

        Section 10.10  Severability.  In case any provision in this Indenture or
in the Notes shall be held  invalid,  illegal or  unenforceable,  the  validity,
legality, and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.

        Section 10.11 Benefits of Indenture. Nothing in this Indenture or in the
Notes,  express or  implied,  shall give to any  Person,  other than the parties
hereto and their successors hereunder,  and the Noteholders,  the Enhancer,  and
any other  party  secured  hereunder,  and any other  Person  with an  ownership
interest in any part of the Trust Estate,  any benefit or any legal or equitable
right, remedy or claim under this Indenture. The Enhancer shall be a third party
beneficiary of this Agreement.

                                       60
<PAGE>

        Section  10.12 Legal  Holidays.  In any case where the date on which any
payment  is due shall not be a Business  Day,  then  (notwithstanding  any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next  succeeding  Business  Day with the same  force  and
effect as if made on the date on which  nominally  due,  and no  interest  shall
accrue for the period from and after any such nominal date.

        Section  10.13  GOVERNING  LAW.  THIS  INDENTURE  SHALL BE  CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW  YORK,  WITHOUT  REFERENCE  TO ITS
CONFLICTS OF LAW  PROVISIONS,  AND THE  OBLIGATIONS,  RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

        Section 10.14 Counterparts. This Indenture may be executed in any number
of  counterparts,  each of which so executed  shall be deemed to be an original,
but all  such  counterparts  shall  together  constitute  but  one and the  same
instrument.

        Section 10.15  Recording of Indenture.  If this  Indenture is subject to
recording in any appropriate public recording  offices,  such recording is to be
effected by the Issuer and at its expense  accompanied  by an Opinion of Counsel
(which counsel shall be reasonably  acceptable to the Indenture  Trustee) to the
effect  that such  recording  is  necessary  either  for the  protection  of the
Noteholders or any other Person secured  hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this Indenture.

        Section 10.16 Issuer Obligation.  No recourse may be taken,  directly or
indirectly,  with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other  writing  delivered in connection  herewith or therewith,  against (i) the
Indenture  Trustee or the Owner  Trustee in its  individual  capacity,  (ii) any
owner of a  beneficial  interest  in the  Issuer  or (iii) any  partner,  owner,
beneficiary,  agent,  officer,  director,  employee  or agent  of the  Indenture
Trustee  or the  Owner  Trustee  in its  individual  capacity,  any  holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture  Trustee or the Owner Trustee in its
individual  capacity,  except as any such Person may have  expressly  agreed (it
being  understood that the Indenture  Trustee and the Owner Trustee have no such
obligations in their respective individual capacities), and except that any such
partner,  owner or beneficiary  shall be fully liable, to the extent provided by
applicable  law,  for  any  unpaid   consideration  for  stock,  unpaid  capital
contribution or failure to pay any installment or call owing to such entity. For
all purposes of this Indenture,  in the performance of any duties or obligations
of the Issuer hereunder,  the Owner Trustee shall be subject to, and entitled to
the  benefits of, the terms and  provisions  of Articles VI, VII and VIII of the
Trust Agreement.

        Section 10.17 No Petition.  The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note, hereby covenant and
agree that they will not at any time  institute  against  the  Depositor  or the
Issuer,  or join in any institution  against the Depositor or the Issuer of, any
bankruptcy, reorganization,  arrangement, insolvency or liquidation proceedings,
or other  proceedings  under any United  States  federal or state  bankruptcy or
similar law in  connection  with any  obligations  relating  to the Notes,  this
Indenture or any of the other Basic Documents.

                                       61
<PAGE>

        Section 10.18  Inspection.  The Issuer agrees that, on reasonable  prior
notice, it shall permit any representative of the Indenture Trustee,  during the
Issuer's normal  business  hours, to examine all the books of account,  records,
reports and other papers of the Issuer,  to make copies and extracts  therefrom,
to cause such books to be audited by Independent  certified public  accountants,
and to discuss the Issuer's  affairs,  finances  and accounts  with the Issuer's
officers,  employees, and Independent certified public accountants,  all at such
reasonable  times and as often as may be  reasonably  requested.  The  Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information  except to the extent  disclosure  may be  required  by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the  extent  that the  Indenture  Trustee  may  reasonably  determine  that such
disclosure is consistent with its obligations hereunder.

                                       62
<PAGE>

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

          GMACM HOME EQUITY LOAN TRUST 2002-HE3, as Issuer

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

                                            By:  /s/ Donald G. MacKelcan
                                                 --------------------------
                                                 Name: Donald G. MacKelcan
                                                 Title: Vice President

                                  WELLS FARGO BANK MINNESOTA, N.A., as Indenture
                                     Trustee

                                            By:  /s/ Peter A. Gobell
                                                 -----------------------------
                                                 Name: Peter A. Gobell
                                                 Title: Vice President

WELLS FARGO BANK MINNESOTA, N.A.
hereby accepts the appointment as Paying
Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section
4.02 hereof.

By:     /s/ Peter A. Gobell
        ------------------------------------
        Name: Peter A. Gobell
        Title: Vice President

Signatures and Seals

                                       63
<PAGE>

STATE OF DELAWARE            )
                                    )       ss.:
COUNTY OF NEW CASTLE  )

        On this 22nd day of August,  2002, before me personally  appeared Donald
G. MacKelcan,  to me known, who being by me duly sworn, did depose and say, that
he/she resides at 1108 Dardell Dr., that he/she is the V.P. of Wilmington  Trust
Company,  the Owner  Trustee,  one of the  corporations  described  in and which
executed the above  instrument;  that he/she knows the seal of said corporation;
that the seal affixed to said  instrument is such corporate seal; that it was so
affixed by order of the Board of Directors of said corporation;  and that he/she
signed his/her name thereto by like order.

/s/ Anita E. Dallago
---------------------------------------------------
               Notary Public

Acknowledgements

                                       64
<PAGE>

STATE OF MARYLAND            )
                                    ) ss.:
COUNTY OF HOWARD             )

        On this ___ day of August,  2002, before me personally appeared Peter A.
Gobell, to me known, who being by me duly sworn, did depose and say, that he/she
resides at Columbia,  MD.; that he/she is the Vice President of Wells Fargo Bank
Minnesota,  N.A., as Indenture Trustee, one of the corporations described in and
which  executed  the  above  instrument;  that  he/she  knows  the  seal of said
corporation;  that the seal affixed to said  instrument is such corporate  seal;
that it was so affixed by order of the Board of Directors  of said  corporation;
and that he/she signed his/her name thereto by like order.

/s/ Lisa C. Carr
---------------------------------------------------
               Notary Public

NOTORIAL SEAL

                                       65
<PAGE>

                                 EXECUTION COPY

                                   APPENDIX A

                                   DEFINITIONS

        Addition  Notice:  With respect to the transfer of  Subsequent  Mortgage
Loans  to the  Issuer  by a  Seller  pursuant  to  Section  2.2 of the  Purchase
Agreement (in  substantially the form set forth in Exhibit 3 to such agreement),
a notice given by the respective  Seller to the Rating  Agencies,  the Indenture
Trustee, the Enhancer and the Owner Trustee, which shall be given not later than
seven  Business Days prior to the related  Subsequent  Transfer Date, of (i) the
Seller's  designation of Subsequent  Mortgage Loans to be sold to the Issuer and
(ii) the aggregate  principal balance as of the Subsequent  Cut-Off Date of such
Subsequent Mortgage Loans.

        Additional  Balance:  With respect to any Mortgage Loan, any future Draw
made by the related  Mortgagor  pursuant to the related Loan Agreement after the
Cut-Off  Date or  Subsequent  Cut-Off  Date,  together  with all money due or to
become due in respect of such Draw; provided,  however, that any Draw during the
Rapid Amortization Period shall be an Excluded Amount,  shall not be acquired by
the Trust and shall not be an Additional Balance.

        Additional  Balance Increase Amount:  Shall mean (a) the excess, if any,
of (i) the aggregate  principal  amount of Additional  Balances  conveyed to the
Trust Estate,  over (ii)  Principal  Collections  and Excess  Spread  applied to
purchase those Additional Balances from the Funding Account and/or the Custodial
Account  minus (b) amounts paid on previous  Payment Dates to the holders of the
Certificates as an Additional Balance Increase Amount.

        Administrative  Agent:  Shall  mean Bank One,  NA,  in its  capacity  as
administrative  agent  under  the Note  Purchase  Agreement,  and any  successor
thereto in such capacity.

               Advance:  An advance of funds made by the Holder of the  Variable
          Pay Revolving Notes in connection with a Targeted Final Payment Date.

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

               Amortization  Periods:  Collectively,  the  Managed  Amortization
          Period and the Rapid Amortization Period.

        Appraised Value: With respect to any Mortgaged Property,  either (x) the
value as generally set forth in an appraisal of such Mortgaged  Property used to
establish compliance with the underwriting criteria then in effect in connection
with  the  later  of the  application  for the  Mortgage  Loan  secured  by such
Mortgaged Property or any subsequent  increase or decrease in the related Credit
Limit, or to reduce or eliminate the amount of any primary  mortgage  insurance,
or (y) if the sales price of such Mortgaged Property is considered in accordance
with the  underwriting  criteria  applicable to the related  Mortgage  Loan, the
lesser of (i) the  appraised  value  referred to in (x) above and (ii) the sales
price of such Mortgaged Property.

                                       1
<PAGE>

        Assignment  of Mortgage:  With respect to any Mortgage,  an  assignment,
notice of transfer or  equivalent  instrument,  in recordable  form,  sufficient
under the laws of the  jurisdiction in which the related  Mortgaged  Property is
located to reflect the conveyance of such Mortgage, which assignment,  notice of
transfer  or  equivalent  instrument  may be in the form of one or more  blanket
assignments  covering  Mortgages secured by Mortgaged  Properties located in the
same jurisdiction.

        Authorized Newspaper:  A newspaper of general circulation in the Borough
of  Manhattan,  The  City of New  York,  printed  in the  English  language  and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays or holidays.

        Authorized Officer: With respect to the Issuer, any officer of the Owner
Trustee who is authorized  to act for the Owner  Trustee in matters  relating to
the Issuer and who is identified on the list of Authorized Officers delivered by
the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).

        Bankruptcy Code:  The Bankruptcy Code of 1978, as amended.

     Base  Specified  Overcollateralization  Amount:  Shall  mean  0.50%  of the
Initial Pool Balance.

        Basic  Documents:  The Trust  Agreement,  the  Indenture,  the  Purchase
Agreement,  the Insurance Agreement,  the Policy, the Servicing  Agreement,  the
Custodial  Agreement,  any Subsequent Transfer Agreement and the other documents
and certificates delivered in connection with any of the above.

        Beneficial  Owner:  With  respect  to any Note,  the  Person  who is the
beneficial  owner of such Note as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository  Participant  or  indirectly  through a  Depository  Participant,  in
accordance with the rules of such Depository).

     Billing Cycle: With respect to any Mortgage Loan and Due Date, the calendar
month preceding such Due Date.

        Book-Entry  Notes:  Beneficial  interests  in the Notes,  ownership  and
transfers  of which shall be made  through  book  entries by the  Depository  as
described in Section 4.06 of the Indenture.

        Business  Day:  Any day other than (i) a Saturday  or a Sunday or (ii) a
day on which  banking  institutions  in the  States of New  York,  Pennsylvania,
Delaware  or the State in which the  Corporate  Trust  Office  are  required  or
authorized by law to be closed.

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

     Capitalized  Interest  Account:  The  account  established  and  maintained
pursuant to of the Pre-Funding  Period, the excess, if any of (i) the sum of (A)
the  amount of  interest  accrued  at the  applicable  Note Rate or Rates on the

                                       2
<PAGE>

respective  Note  Balances  of the  related  Classes  of Notes  for the  related
Interest  Period on the amount on deposit in the  Pre-Funding  Account as of the
close of business on the  preceding  Payment Date (or as of the Closing Date, in
the case of the first  Payment  Date) and (B) the amount of any premium  paid to
the  Enhancer  for the  related  Policy,  over (ii) the  amount of  reinvestment
earnings  since the preceding  Payment Date (or the Closing Date, in the case of
the first Payment Date) in the Pre-Funding Account.

        Certificate  Distribution  Amount:  For any Payment Date, the amount, if
any,  distributable  on the  Certificates  for such  Payment  Date  pursuant  to
Sections 3.05(a)(viii) and (xvi) of the Indenture.

     Certificate of Trust: The Certificate of Trust filed for the Trust pursuant
to Section 3810(a) of the Business Trust Statute.

     Certificate  Paying Agent: The Indenture  Trustee,  as further described in
Section 3.10 of the Trust Agreement.

     Certificate  Percentage Interest:  With respect to any Payment Date and any
Certificate, the Percentage Interest for such Certificate.

     Certificate Register:  The register maintained by the Certificate Registrar
in which  the  Certificate  Registrar  shall  provide  for the  registration  of
Certificates and of transfers and exchanges of Certificates.

     Certificate Registrar: Initially, the Indenture Trustee, in its capacity as
Certificate Registrar.

        Certificateholder:  The Person in whose name a Certificate is registered
in the Certificate Register except that, any Certificate  registered in the name
of the Issuer,  the Owner Trustee or the  Indenture  Trustee or any Affiliate of
the Owner Trustee or the Indenture Trustee shall be deemed not to be outstanding
and the  registered  holder  will  not be  considered  a  Certificateholder  for
purposes  of giving  any  request,  demand,  authorization,  direction,  notice,
consent or waiver under the Indenture or the Trust Agreement;  provided that, in
determining  whether  the  Indenture  Trustee  or the  Owner  Trustee  shall  be
protected in relying upon any such request,  demand,  authorization,  direction,
notice,  consent or waiver,  only Certificates that the Indenture Trustee or the
Owner  Trustee  knows  to  be  so  owned  shall  be so  disregarded.  Owners  of
Certificates   that  have  been  pledged  in  good  faith  may  be  regarded  as
Certificateholders  if  the  pledgee  establishes  to  the  satisfaction  of the
Indenture Trustee or the Owner Trustee,  as the case may be, the pledgee's right
so to act with  respect  to such  Certificates  and that the  pledgee is not the
Issuer,  any other obligor upon the  Certificates  or any Affiliate of the Owner
Trustee or the Indenture Trustee.

        Certificates:  The Certificates issued pursuant to the Trust Agreement.

                                       3
<PAGE>

        Class:  With  respect  to any Note,  all Notes  that bear the same class
designation,  (i.e.,  the Class  A-1 Notes as a group,  the Class A-2 Notes as a
group,  the Class A-3 Notes as a group or each class of Variable  Pay  Revolving
Notes as a group).

        Class A-1 Notes: The Class A-1 GMACM Home Equity Loan-Backed Term Notes,
Series  2002-HE3,  in  substantially  the form set forth in  Exhibit  A-1 to the
Indenture.

        Class A-2 Notes: The Class A-2 GMACM Home Equity Loan-Backed Term Notes,
Series  2002-HE3,  in  substantially  the form set forth in  Exhibit  A-1 to the
Indenture.

        Class A-3 Notes: The Class A-3 GMACM Home Equity Loan-Backed Term Notes,
Series  2002-HE3,  in  substantially  the form set forth in  Exhibit  A-1 to the
Indenture.

        Closing Date: August 28, 2002.
        ------------

     Code:  The  Internal  Revenue Code of 1986,  as amended,  and the rules and
regulations promulgated thereunder.

     Collateral: The meaning specified in the Granting Clause of the Indenture.

     Collection Period:  With respect to any Mortgage Loan and Payment Date, the
calendar month preceding any such Payment Date.

     Collections:   With  respect  to  any  Collection   Period,   all  Interest
Collections and Principal Collections during such Collection Period.

        Combined  Loan-to-Value  Ratio or CLTV:  With  respect to each  Mortgage
Loan, the ratio,  expressed as a percentage,  of the sum of (i) the Credit Limit
and (ii) any  outstanding  principal  balance,  at  origination of such Mortgage
Loan, of all other  mortgage  loans,  if any,  secured by senior or  subordinate
liens on the related  Mortgaged  Property,  to the Appraised Value, or, when not
available, the Stated Value.

        Commission:  The Securities and Exchange Commission.

        Committed  Purchasers:  Any one of the financial  institutions listed on
the  signature   pages  of  the  Note  Purchase   Agreement  under  the  heading
"Commitments", together with their respective successors and assigns.

     Conduit Purchaser: Falcon Asset Securitization  Corporation,  together with
its successors and assigns.

        Corporate  Trust  Office:   With  respect  to  the  Indenture   Trustee,
Certificate Registrar,  Certificate Paying Agent and Paying Agent, the principal
corporate  trust office of the Indenture  Trustee and Note Registrar at which at
any particular  time its corporate trust business shall be  administered,  which
office at the date of the  execution  of this  instrument  is located at (i) for
Note and Certificate transfer purposes: Wells Fargo Center, Sixth and Marquette,
Minneapolis,  Minnesota  55479-0070,  Attention:  Corporate Trust Services-GMACM
Series 2002-HE3 and (ii) for all other purposes, such office shall be located at

                                       4
<PAGE>

9062 Old Annapolis Road,  Columbia,  Maryland 21045-1951,  Attention:  Corporate
Trust  Services-GMACM  Series 2002-HE3).  With respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee at which at any particular
time its corporate  trust  business shall be  administered,  which office at the
date of the execution of this Trust Agreement is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration.

     Credit  Limit:  With respect to any Mortgage  Loan,  the maximum  Principal
Balance permitted under the terms of the related Loan Agreement.

        Custodial Account: The account or accounts created and maintained by the
Servicer  pursuant to Section 3.02(b) of the Servicing  Agreement,  in which the
Servicer  shall deposit or cause to be deposited  certain  amounts in respect of
the Mortgage Loans.

     Custodial  Agreement:  Any Custodial  Agreement  among the  Custodian,  the
Indenture  Trustee,  the Issuer and the Servicer  relating to the custody of the
Mortgage Loans and the Related Documents.

        Custodian:  Escrow Bank USA, an industrial loan corporation  established
under the laws of the State of Utah,  and its  successors  and  assigns,  or any
successor  custodian for the Mortgage Files  appointed by the Indenture  Trustee
and reasonably acceptable to the Enhancer and the Servicer.

        Cut-Off Date:  August 1, 2002.

        Cut-Off Date  Principal  Balance:  With respect to any Initial  Mortgage
Loan or Subsequent Mortgage Loan, the unpaid principal balance thereof as of the
close of business on the last day of the Billing Cycle  immediately prior to the
Cut-Off Date or Subsequent Cut-Off Date, as the case may be.

     Default:  Any  occurrence  which is or with  notice or the lapse of time or
both would become an Event of Default.

        Deficiency  Amount:  With respect to any Payment Date and the Notes,  an
amount  equal to the sum of (a) the  amount  by which  the  aggregate  amount of
accrued  interest on the Notes  (excluding  any Relief Act  Shortfalls  for such
Payment  Date) at the  respective  Note Rates on such  Payment  Date exceeds the
amount  on  deposit  in  the  Note  Payment   Account   available  for  interest
distributions  on the Notes on such  Payment Date and (b)(i) with respect to any
Payment Date that is not the Final Payment  Date,  any  Liquidation  Loss Amount
with respect to the  Mortgage  Loans for such  Payment  Date,  to the extent not
distributed as part of the Principal  Distribution  Amount to the Holders of the
Notes on such Payment Date or deposited into the Funding  Account as part of the
Principal  Distribution  Amount for such  Payment  Date or applied to reduce the
Overcollateralization  Amount on such Payment Date or (ii) on the Final  Payment
Date, the aggregate outstanding balance of the Notes to the extent otherwise not
paid on such date.

     Definitive  Notes:  Any definitive,  fully registered Note, as described in
Section 4.06 of the Indenture.

                                       5
<PAGE>

     Deleted  Loan: A Mortgage  Loan replaced or to be replaced with an Eligible
Substitute Loan.

     Depositor:   Residential   Asset  Mortgage   Products,   Inc.,  a  Delaware
corporation, or its successor in interest.

        Depository: The Depository Trust Company or a successor appointed by the
Indenture  Trustee  with  the  approval  of the  Issuer.  Any  successor  to the
Depository shall be an organization  registered as a "clearing  agency" pursuant
to  Section  17A of the  Exchange  Act and  the  regulations  of the  Commission
thereunder.

     Depository  Participant:  A  Person  for  whom,  from  time  to  time,  the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

        Determination  Date:  With respect to any Payment Date,  the 18th day of
the month in which  such  Payment  Date  occurs or if such day is not a Business
Day, the next succeeding Business Day.

        Distribution  Account: The account or accounts created and maintained by
the Certificate Paying Agent pursuant to Section 3.10(c) of the Trust Agreement.
The Certificate  Paying Agent will make all  distributions  on the  Certificates
from money on deposit in the Distribution Account.

     Draw:  With  respect to any  Mortgage  Loan,  a  borrowing  by the  related
Mortgagor under the related Loan Agreement.

        Draw Period:  With respect to each Mortgage Loan, the period  consisting
of either the first five,  ten or fifteen years after the date of origination of
such  Mortgage  Loan,  during  which the related  Mortgagor is permitted to make
Draws.

     Due Date:  With respect to each  Mortgage  Loan,  the date on which monthly
payments on such Mortgage Loan are due.

        Early  Amortization  Event:  The  occurrence of any one of the following
events:  (i) the Term  Notes are  downgraded  below  "AAA" by  Standard & Poor's
Ratings  Services,  "Aaa" by Moody's Investors  Service,  Inc. or "AAA" by Fitch
Ratings and, within 60 days of the downgrade, the ratings have not been restored
to the  original  ratings;  (ii) within 10 days after a Targeted  Final  Payment
Date,  the  Trust  fails to  receive  an  Advance  and  fails to issue  and sell
additional  Variable Pay  Revolving  Notes;  (iii) an Event of Default under the
Indenture  or an  Enhancer  Default  has  occurred;  or (iv) if,  (a) for  three
consecutive months, the average amount in the Funding Account which has not been
used during a month to purchase Additional Balances or Subsequent Mortgage Loans
is greater  than 30% of such amount  plus the amount  which had been used during
that month to purchase Additional Balances and Subsequent Mortgage Loans, or (b)
for six consecutive  months, the average amount in the Funding Account which has
not been used  during a month to  purchase  Additional  Balances  or  Subsequent
Mortgage Loans is greater than 20% of such amount plus the amount which had been
used during that month to purchase  Additional  Balances and Subsequent Mortgage
Loans.

                                       6
<PAGE>

        Eligible  Account:  An  account  that  is  any  of  the  following:  (i)
maintained  with a depository  institution  the short-term  debt  obligations of
which have been  rated by each  Rating  Agency in its  highest  rating  category
available,  or (ii) an account or accounts in a depository  institution in which
such accounts are fully insured to the limits established by the FDIC,  provided
that any deposits not so insured shall, to the extent  acceptable to each Rating
Agency,  as evidenced in writing,  be  maintained  such that (as evidenced by an
Opinion of Counsel  delivered to the Indenture  Trustee and each Rating  Agency)
the Indenture  Trustee have a claim with respect to the funds in such account or
a perfected  first  security  interest  against any  collateral  (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other  depositors or creditors of the depository  institution  with which
such account is maintained,  or (iii) an account or accounts  maintained  with a
depository  institution  or  trust  company,  as  long  as its  short-term  debt
obligations are rated P-1 by Moody's, A-1+ by Standard & Poor's and F1, if rated
by Fitch (or the equivalent) or better by each Rating Agency,  and its long term
debt  obligations are rated A2 by Moody's,  AA- by Standard & Poor's and AA-, if
rated by Fitch (or the  equivalent) or better by each Rating  Agency,  or (iv) a
segregated trust account or accounts  maintained in the corporate trust division
of a depository institution or trust company,  acting in its fiduciary capacity,
or (v) an account or accounts of a  depository  institution  acceptable  to each
Rating  Agency (as  evidenced  in writing by each Rating  Agency that use of any
such account will not cause a Rating Event (if determined  without regard to the
Policy).

        Eligible  Substitute  Loan: A Mortgage Loan substituted by either Seller
for a Deleted Loan, which must, on the date of such  substitution,  as confirmed
in an Officers'  Certificate  delivered to the  Indenture  Trustee,  (i) have an
outstanding  principal balance,  after deduction of the principal portion of the
monthly  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 outstanding principal balance, after such deduction), not in excess of
the  outstanding  principal  balance  of the  Deleted  Loan  (the  amount of any
shortfall to be deposited by the Seller in the Custodial Account in the month of
substitution)  and a Credit  Limit not in excess of  $550,000;  (ii) comply with
each  representation  and warranty made by GMACM and set forth in Section 3.1(b)
of the Purchase Agreement,  other than clauses (viii), (xiii), (xxiv), (xxv)(B),
(xxvi) and  (xxvii)  thereof,  and comply with each of the  representations  and
warranties made by WG Trust 2001 and set forth in Section 3.1(c)(II),  as of the
date of substitution;  (iii) have a Loan Rate, Net Loan Rate and Gross Margin no
lower than and not more than 1% per annum  higher  than the Loan Rate,  Net Loan
Rate and  Gross  Margin,  respectively,  of the  Deleted  Loan as of the date of
substitution;  (iv) have a CLTV at the time of  substitution no higher than that
of the Deleted Loan at the time of  substitution;  (v) have a remaining  term to
stated  maturity not greater than (and not more than one year less than) that of
the Deleted Loan; and (vi) not be 30 days or more delinquent.

     Enhancer:  MBIA  Insurance  Corporation,   any  successor  thereto  or  any
replacement Enhancer substituted pursuant to the Indenture.

     Enhancer  Default:  Any failure by the Enhancer to make a payment  required
under the Policy in accordance with its terms.

     Enhancer  Optional  Deposit:  Amounts  deposited  by or on  behalf  of  the
Enhancer in the Note Payment Account,  other than Insured Amounts, to be applied
to the Notes.

                                       7
<PAGE>

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

        Event  of  Default:  With  respect  to  the  Indenture,  any  one of the
following  events  (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,  decree or order of any court or any order,  rule or regulation
of any administrative or governmental body):

(a) a default  in the  payment  of the  principal  of,  any  installment  of the
principal of or interest on any Note when the same becomes due and payable,  and
such default shall continue for a period of five days;

(b) there  occurs a default in the  observance  or  performance  in any material
respect of any covenant or agreement of the Issuer made in the Indenture, or any
representation  or  warranty  of the  Issuer  made  in the  Indenture  or in any
certificate  delivered pursuant hereto or in connection herewith proving to have
been  incorrect in any material  respect as of the time when the same shall have
been made that has a material adverse effect on the Noteholders or the Enhancer,
and  such  default  shall  continue  or not be  cured,  or the  circumstance  or
condition  in respect of which such  representation  or warranty  was  incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given,  by registered or certified  mail, to the Issuer by
the Indenture Trustee or to the Issuer and the Indenture Trustee by the Enhancer
or the Noteholders of at least 25% of the aggregate Note Balance of the Notes, a
written notice  specifying such default or incorrect  representation or warranty
and  requiring  it to be remedied  and  stating  that such notice is a notice of
default hereunder;

(c) there  occurs the  filing of a decree or order for relief by a court  having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Trust Estate in an involuntary  case under any  applicable  federal or state
bankruptcy,  insolvency  or other  similar law now or  hereafter  in effect,  or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar  official of the Issuer or for any substantial part of the Trust Estate,
or ordering the  winding-up or  liquidation  of the Issuer's  affairs,  and such
decree  or  order  shall  remain  unstayed  and in  effect  for a  period  of 60
consecutive days;

(d) there occurs the  commencement  by the Issuer of a voluntary  case under any
applicable  federal or state bankruptcy,  insolvency or other similar law now or
hereafter  in effect,  or the consent by the Issuer to the entry of an order for
relief in an  involuntary  case under any such law, or the consent by the Issuer
to the  appointment or taking  possession by a receiver,  liquidator,  assignee,
custodian,  trustee,  sequestrator or similar  official of the Issuer or for any
substantial part of the assets of the Trust Estate,  or the making by the Issuer
of any general  assignment  for the benefit of creditors,  or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of any
action by the Issuer in furtherance of any of the foregoing; or

(e)     the occurrence of an Early Amortization Event.

     Exchange  Act: The  Securities  Exchange Act of 1934,  as amended,  and the
rules and regulations promulgated thereunder.

                                       8
<PAGE>

        Excess Spread:  With respect to any Payment Date and without taking into
account any Insured  Amount,  if any, paid by the Enhancer  under the Policy for
such  Payment  Date,  the excess,  if any, of (i) Interest  Collections  for the
related  Collection  Period  over (ii) the sum of (x) the sum of (A) the premium
allocable to such Payment Date and (B) any unpaid  premium for the Policy,  with
interest  thereon as provided in the  Insurance  Agreement and (y) the aggregate
amount  distributed to the Noteholders as interest on such Payment Date pursuant
to Section 3.05(a)(i) and 3.05(a)(ii) of the Indenture.

        Excess  Spread  Test:  As to any  Payment  Date,  a test  that  will  be
satisfied if the product of (x) (i) the amount of Excess Spread  (reduced by the
aggregate  Liquidation  Loss Amounts with respect to such Payment  Date) on such
Payment Date divided by (ii) the Pool Balance as of the beginning of the related
Collection  Period and (y) 12,  expressed  as a  percentage,  is greater than or
equal to 2.00%

        Excluded  Amount:  For any Payment  Date  during the Rapid  Amortization
Period,  all Draws made to an obligor  under any Mortgage  Loan during the Rapid
Amortization  Period which shall not be transferred to the Trust Estate, and the
portion  of  the  Principal   Collections  and  Interest  Collections  for  each
Collection  Period  allocated  to  such  Excluded  Amount  based  on a pro  rata
allocation between the related Excluded Amount and the Principal Balance of such
Mortgage Loan in proportion to the respective amounts  outstanding as of the end
of the calendar month preceding such Collection Period.

        Expenses:  The meaning specified in Section 7.02 of the Trust Agreement.

     Fannie Mae: Fannie Mae, formerly the Federal National Mortgage Association,
or any successor thereto.

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

        Final Payment Date:  The Payment Date in September 2032.

     Fiscal Year:  The fiscal year of the Trust,  which shall end on December 31
of each year.

        Fitch:  Fitch Ratings, or its successor in interest.

        Foreclosure  Profit:  With respect to a Liquidated  Mortgage  Loan,  the
amount,  if any,  by which (i) the  aggregate  of  Liquidation  Proceeds  net of
Liquidation  Expenses  exceeds  (ii) the  Principal  Balance of such  Liquidated
Mortgage Loan (plus accrued and unpaid  interest  thereon at the applicable Loan
Rate from the date  interest  was last paid  through  the date of receipt of the
final  Liquidation  Proceeds)  immediately  prior to the final  recovery  of the
related Liquidation Proceeds.

     Freddie  Mac:  Freddie  Mac,   formerly  the  Federal  Home  Loan  Mortgage
Corporation, or any successor thereto.

     Funding Account: The account established and maintained pursuant to Section
3.18 of the Servicing Agreement.

                                       9
<PAGE>

        Funding Event: Shall mean that, during the Managed  Amortization Period,
the amount in the Reserve Sub-Account is more than $2,000,000, provided that the
Note Balance of the Variable  Pay  Revolving  Notes has been reduced to zero and
the Overcollateralization  Amount is at least equal to the Overcollateralization
Target Amount.

        GAAP: Generally accepted accounting principles.
        ----

        Grant:  Pledge,  bargain,  sell,  warrant,  alienate,  remise,  release,
convey, assign, transfer,  create, and grant a lien upon and a security interest
in and right of set-off against,  deposit,  set over and confirm pursuant to the
Indenture.  A Grant of the  Collateral  or of any other  agreement or instrument
shall include all rights,  powers and options (but none of the  obligations)  of
the granting party  thereunder,  including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such  collateral or other  agreement or  instrument  and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other  agreements,  to exercise  all rights and  options,  to
bring proceedings in the name of the granting party or otherwise,  and generally
to do and receive  anything that the granting  party is or may be entitled to do
or receive thereunder or with respect thereto.

     Gross Margin:  With respect to any Mortgage  Loan, the percentage set forth
as the "Margin" for such Mortgage Loan on the Mortgage Loan Schedule.

     GMAC:  General  Motors  Acceptance  Corporation,  and  its  successors  and
assigns.

     GMACM: GMAC Mortgage Corporation, and its successors and assigns.

     Indemnified  Party:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.

     Indenture:  The  indenture  dated as of the Closing Date between the Issuer
and the Indenture Trustee.

     Indenture  Trustee:  Wells Fargo Bank Minnesota,  N.A., a national  banking
association,  and its successors and assigns or any successor  indenture trustee
appointed pursuant to the terms of the Indenture.

        Independent: When used with respect to any specified Person, such Person
(i) is in fact  independent of the Issuer,  any other obligor on the Notes,  the
Sellers,  the Depositor and any Affiliate of any of the foregoing Persons,  (ii)
does not have any direct financial  interest or any material indirect  financial
interest in the Issuer,  any such other obligor,  the Sellers,  the Depositor or
any  Affiliate of any of the foregoing  Persons and (iii) is not connected  with
the Issuer, any such other obligor,  the Sellers, the Depositor or any Affiliate
of any of the foregoing Persons as an officer, employee, promoter,  underwriter,
trustee, partner, director or person performing similar functions.

        Independent Certificate: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances  described in, and otherwise complying
with, the applicable requirements of Section 10.01 of the Indenture,  made by an
Independent  appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.

                                       10
<PAGE>

        Index:  With respect to any Mortgage  Loan,  the prime rate from time to
time for the  adjustment  of the Loan Rate set forth as such on the related Loan
Agreement.

        Initial Aggregate Term Note Balance:  $540,206,000.
        -----------------------------------

        Initial Certificate Balance: $0.
        ---------------------------

        Initial Class A-1 Note Balance:  $210,000,000.
        ------------------------------

        Initial Class A-2 Note Balance:  $158,000,000.
        ------------------------------

        Initial Class A-3 Note Balance:  $172,206,000.
        ------------------------------

        Initial  Mortgage Loans: The adjustable rate home equity revolving lines
of credit  initially  transferred  by the Depositor to the Issuer on the Closing
Date, which are listed on the Mortgage Loan Schedule on such date.

        Initial  Pool  Balance:  With  respect  to any date,  the sum of (i) the
aggregate  Principal  Balances of the Initial  Mortgage  Loans as of the Cut-off
Date and (ii) the Original Pre-Funded Amount.

        Initial Variable Pay Revolving Note Balance:  $2,714,603.
        -------------------------------------------

        Insolvency Event: With respect to a specified Person,  (a) the filing of
a decree or order for relief by a court having  jurisdiction  in the premises in
respect of such Person or any substantial part of its property in an involuntary
case under any  applicable  bankruptcy,  insolvency  or other similar law now or
hereafter in effect, or appointing a receiver, liquidator,  assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property, or ordering the winding-up or liquidation of such Person's
affairs,  and such decree or order  shall  remain  unstayed  and in effect for a
period of 60  consecutive  days;  or (b) the  commencement  by such  Person of a
voluntary case under any applicable bankruptcy,  insolvency or other similar law
now or  hereafter  in effect,  or the  consent by such Person to the entry of an
order for relief in an  involuntary  case under any such law,  or the consent by
such  Person  to  the  appointment  of  or  taking  possession  by  a  receiver,
liquidator,  assignee,  custodian, trustee, sequestrator or similar official for
such Person or for any substantial  part of its property,  or the making by such
Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture  Trustee shall have notice)
of its  inability  to pay its debts  generally,  or the adoption by the Board of
Directors  or managing  member of such Person of a resolution  which  authorizes
action by such Person in furtherance of any of the foregoing.

        Insurance  Agreement:  The Insurance  Agreement  dated as of the Closing
Date, among the Servicer, the Sellers, the Depositor,  the Issuer, the Indenture
Trustee,  the Owner  Trustee and the  Enhancer,  including  any  amendments  and
supplements thereto.

                                       11
<PAGE>

        Insurance  Proceeds:  Proceeds  paid  by any  insurer  (other  than  the
Enhancer)  pursuant to any insurance  policy  covering a Mortgage Loan which are
required to be remitted to the Servicer,  or amounts  required to be paid by the
Servicer  pursuant to the next to last sentence of Section 3.04 of the Servicing
Agreement, net of any component thereof (i) covering any expenses incurred by or
on behalf of the Servicer in connection with obtaining such proceeds,  (ii) that
is applied to the restoration or repair of the related Mortgaged Property, (iii)
released to the related  Mortgagor  in  accordance  with the  Servicer's  normal
servicing  procedures  or (iv)  required  to be paid to any holder of a mortgage
senior to such Mortgage Loan.

        Insured Amount:  As defined in the Policy.
        --------------

        Interest  Collections:  With respect to any Payment Date, the sum of all
payments  by or on  behalf of  Mortgagors  and any  other  amounts  constituting
interest (including without limitation such portion of Insurance  Proceeds,  Net
Liquidation  Proceeds and  Repurchase  Prices as is allocable to interest on the
applicable  Mortgage Loan) as is paid by the Sellers or the Servicer  (including
any  optional  servicing  advance) or is  collected  and applied by the Servicer
under the Mortgage Loans, exclusive of the pro rata portion thereof attributable
to any  Excluded  Amounts,  and  reduced by the  Servicing  Fee for the  related
Collection  Period and by any fees  (including  annual  fees) or late charges or
similar  administrative  fees paid by Mortgagors  during the related  Collection
Period.  The terms of the related Loan Agreement  shall determine the portion of
each  payment in respect of such  Mortgage  Loan that  constitutes  principal or
interest.

        Interest  Coverage Amount:  The amount to be paid from proceeds received
from the sale of the Notes for deposit  into the  Capitalized  Interest  Account
pursuant to Section 3.19 of the Servicing  Agreement on the Closing Date,  which
amount  initially  shall be  $222,055.11,  and  thereafter,  shall be the amount
computed in accordance with Section 3.19 of the Servicing Agreement.

        Interest  Period:  With respect to the Notes and any Payment Date (other
than the first Payment Date), the period beginning on the preceding Payment Date
and ending on the day preceding  such Payment Date, and in the case of the first
Payment  Date,  the period  beginning  on the Closing Date and ending on the day
preceding the first Payment Date.

        Interest Rate  Adjustment  Date: With respect to each Mortgage Loan, the
date or dates on which the Loan Rate is adjusted in accordance  with the related
Loan Agreement.

     Interest  Shortfall:  (I) With respect to the Class A-1 Notes and the Class
A-2 Notes and any Payment Date, the sum of:

        (A) an amount of  interest on such Class of Notes  calculated  at a rate
equal to the excess of (i) the lesser of (a) LIBOR plus the  related  margin and
(b) 14.00% over (ii) the Net WAC Rate, plus

     (B) interest on such amount  calculated at a rate equal to the related Note
Rate; and

                                       12
<PAGE>

        (II) With respect to the Class A-3 Notes and the Variable Pay  Revolving
Notes and any Payment Date, the sum of:

        (A) an amount of  interest on such Class of Notes  calculated  at a rate
equal to the excess of (i) LIBOR plus the  related  margin over (ii) the Net WAC
Rate, plus

        (B)  interest on such amount  calculated  at a rate equal to the related
Note Rate.

        Interest  Shortfalls  will not be included  as interest  payments on the
Notes for such Payment Date and such amount will accrue  interest at the related
Note Rate (as  adjusted  from  time to time) and will be paid on future  Payment
Dates only to the extent  funds are  available  therefor as set forth in Section
3.05(a) of the Indenture.

     Issuer or Trust:  The GMACM Home  Equity  Loan Trust  2002-HE3,  a Delaware
business trust, or its successor in interest.

        Issuer Order or Issuer Request: A written order or request signed in the
name of the Issuer by any one of its  Authorized  Officers and  delivered to the
Indenture Trustee.

        LIBOR: As to any Interest Period, (a) for any Interest Period other than
the first Interest  Period,  the rate for United States dollar  deposits for one
month that  appears on the Telerate  Screen Page 3750 as of 11:00 a.m.,  London,
England  time,  on the second LIBOR  Business Day prior to the first day of that
Interest Period or (b) with respect to the first Interest  Period,  the rate for
United States dollar  deposits for one month that appears on the Telerate Screen
Page 3750 as of 11:00 a.m., London,  England time, two LIBOR Business Days prior
to the Closing Date. If such rate does not appear on such page (or 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 Indenture  Trustee after  consultation  with the Servicer),  the
rate will be the Reference  Bank Rate.  If no Reference  Bank Rate is available,
LIBOR will be LIBOR applicable to the preceding Payment Date.

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

        Lien: Any mortgage,  deed of trust, pledge,  conveyance,  hypothecation,
assignment,  participation, deposit arrangement, encumbrance, lien (statutory or
other),  preference,  priority right or interest or other security  agreement or
preferential  arrangement of any kind or nature whatsoever,  including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing  and the filing of any financing  statement  under the UCC (other than
any  such  financing  statement  filed  for  informational   purposes  only)  or
comparable law of any  jurisdiction to evidence any of the foregoing;  provided,
however, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.

        Liquidated Mortgage Loan: With respect to any Payment Date, any Mortgage
Loan in respect of which the Servicer has  determined,  in  accordance  with the
servicing procedures specified in the Servicing Agreement,  as of the end of the
related Collection Period that  substantially all Liquidation  Proceeds which it
reasonably  expects to recover,  if any, with respect to the  disposition of the
related REO Property have been recovered.

                                       13
<PAGE>

        Liquidation Expenses: All out-of-pocket expenses (exclusive of overhead)
incurred by or on behalf of the Servicer in connection  with the  liquidation of
any Mortgage Loan and not recovered under any insurance policy,  including legal
fees  and  expenses,  any  unreimbursed  amount  expended  (including,   without
limitation,  amounts  advanced to correct defaults on any mortgage loan which is
senior to such Mortgage  Loan and amounts  advanced to keep current or pay off a
mortgage loan that is senior to such  Mortgage  Loan)  respecting  such Mortgage
Loan and any  related and  unreimbursed  expenditures  for real estate  property
taxes or for property  restoration,  preservation or insurance  against casualty
loss or damage.

        Liquidation  Loss  Amount:  With  respect  to any  Payment  Date and any
Mortgage  Loan  that  became a  Liquidated  Mortgage  Loan  during  the  related
Collection  Period,  the  unrecovered  portion of the Principal  Balance of such
Mortgage  Loan  and  any  unpaid  accrued  interest  thereon  at the end of such
Collection Period,  after giving effect to the Net Liquidation  Proceeds applied
in reduction of such Principal Balance.

        Liquidation  Proceeds:  Proceeds  (including  Insurance Proceeds but not
including amounts drawn under the Policy) if any received in connection with the
liquidation  of any  Mortgage  Loan or related  REO  Property,  whether  through
trustee's sale, foreclosure sale or otherwise.

        Loan  Agreement:  With respect to each  Mortgage  Loan,  the credit line
agreement,   pursuant  to  which  the  related   Mortgagor  agrees  to  pay  the
indebtedness  evidenced  thereby and secured by the related Mortgage as modified
or amended.

     Loan Rate:  With  respect to any  Mortgage  Loan and any day, the per annum
rate of interest applicable under the related Loan Agreement.

        Lost Note  Affidavit:  With respect to any Mortgage Loan as to which the
original Loan Agreement has been  permanently lost or destroyed and has not been
replaced, an affidavit from the related Seller certifying that the original Loan
Agreement  has been lost,  misplaced or destroyed  (together  with a copy of the
related Loan Agreement, if available).

        Managed  Amortization  Period: The period beginning on the first Payment
Date following the end of the related Revolving Period and ending on the earlier
of (i) the Payment Date occurring in September 2007 and (ii) the occurrence of a
Rapid Amortization Event.

     Maximum Loan Rate:  With respect to each  Mortgage  Loan,  the maximum loan
rate thereon specified in the related Loan Agreement.

     MERS:  Mortgage  Electronic   Registration  Systems,  Inc.,  a  corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

        MERS(R)  System:   The  system  of  recording   transfers  of  Mortgages
electronically maintained by MERS.

     MIN: The Mortgage  Identification Number for Mortgage Loans registered with
MERS on the MERS(R)System.

                                       14
<PAGE>

     Minimum Monthly  Payment:  With respect to any Mortgage Loan and any month,
the minimum amount required to be paid by the related Mortgagor in such month.

        MOM  Loan:  With  respect  to any  Mortgage  Loan,  MERS  acting  as the
mortgagee of such Mortgage  Loan,  solely as nominee for the  originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.

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

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

        Mortgage File:  With respect to each Mortgage Loan:

(i) the original Loan Agreement  endorsed or assigned  without recourse in blank
(which  endorsement  shall contain  either an original  signature or a facsimile
signature  of an  authorized  officer of GMACM) or, with respect to any Mortgage
Loan as to which  the  original  Loan  Agreement  has been  permanently  lost or
destroyed and has not been replaced, a Lost Note Affidavit;

(ii) the original Mortgage, noting the presence of the MIN of the Mortgage Loan,
if the Mortgage is registered  on the MERS(R)  System,  and language  indicating
that the Mortgage  Loan is a MOM Loan if the Mortgage  Loan is a MOM Loan,  with
evidence of recording  thereon,  or, if the  original  Mortgage has not yet been
returned  from the public  recording  office,  a copy of the  original  Mortgage
certified by GMACM that such Mortgage has been sent for  recording,  or a county
certified  copy of such  Mortgage in the event the  recording  office  keeps the
original or if the original is lost;

(iii) unless the Mortgage  Loan is registered  on the MERS(R)  System,  original
assignments  (which  may be  included  in one or  more  blanket  assignments  if
permitted by applicable  law) of the Mortgage in  recordable  form from GMACM to
"Wells  Fargo Bank  Minnesota,  N.A.,  as Indenture  Trustee  under that certain
Indenture  dated as of  August  28,  2002,  for GMACM  Home  Equity  Loan  Trust
2002-HE3,  Mortgage  Loan-Backed  Term  Notes"  c/o the  Servicer  at an address
specified by the Servicer;

(iv)  originals  of  any  intervening  assignments  of  the  Mortgage  from  the
originator  to GMACM (or to MERS,  if the  Mortgage  Loan is  registered  on the
MERS(R)  System,  and which  notes the  presence  of a MIN),  with  evidence  of
recording  thereon,  or, if the original of any such intervening  assignment has
not yet been returned from the public recording  office, a copy of such original
intervening  assignment  certified  by  GMACM  that  such  original  intervening
assignment has been sent for recording; and

(v) a true and correct copy of each assumption,  modification,  consolidation or
substitution agreement, if any, relating to such Mortgage Loan; and

(vi)  any  documents  required  to be added to such  documents  pursuant  to the
Purchase Agreement, the Trust Agreement or the Servicing Agreement.

                                       15
<PAGE>

        It is understood  that the Mortgage File (other than item (i) above) may
be retained in microfilm,  microfiche, optical storage or magnetic media in lieu
of hard copy; provided, that with respect to any Mortgage Loan not registered on
the MERS(R)  System,  the original  assignment  of Mortgage  described in clause
(iii) above shall be retained in the Mortgage File.

        Mortgage Loan Schedule:  The initial  schedule of Initial Mortgage Loans
as of the Cut-Off Date set forth in Exhibit A of the Servicing Agreement, and as
of each Subsequent  Cut-Off Date, any Subsequent  Mortgage Loans, which schedule
sets forth as to each Mortgage Loan (i) the Cut-Off Date Principal Balance, (ii)
the Credit Limit and Gross Margin, (iii) the Maximum Loan Rate, if any, (iv) the
loan number and (v) the lien position of the related Mortgage.

        Mortgage Loans:  At any time, all Initial  Mortgage Loans and Subsequent
Mortgage Loans,  including Additional  Balances,  if any, that have been sold to
the  Issuer  pursuant  to,  in the case of  Initial  Mortgage  Loans,  the Trust
Agreement,  or, in the case of Subsequent  Mortgage Loans, a Subsequent Transfer
Agreement,  together with all monies due or become due thereunder or the Related
Documents, and that remain subject to the terms thereof.

     Mortgaged Property:  The underlying  property,  including real property and
improvements thereon, securing a Mortgage Loan.

        Mortgagor:  The obligor or obligors under a Loan Agreement.

        Net Liquidation Proceeds:  With respect to any Liquidated Mortgage Loan,
Liquidation  Proceeds net of Liquidation  Expenses minus the pro rata portion of
such amount that is  attributable  to any Excluded Amount (but not including the
portion,  if any,  of such amount that  exceeds the  Principal  Balance of, plus
accrued and unpaid  interest on, such Mortgage Loan at the end of the Collection
Period  immediately  preceding the Collection Period in which such Mortgage Loan
became a Liquidated Mortgage Loan).

        Net Loan Rate:  With respect to any Payment Date and any Mortgage  Loan,
the Loan Rate of that  Mortgage  Loan  applicable to the Due Date in the related
Collection  Period,  net  of  the  Servicing  Fee  Rate  and,  beginning  on the
thirteenth Payment Date and thereafter,  0.50% (50 basis points), adjusted to an
effective  rate  reflecting  the methods by which  interest is calculated on the
related Classes of Notes during such Interest Period.

        Net Principal Collections: With respect to any Payment Date, the excess,
if any, of Principal Collections for such Payment Date over the aggregate amount
of Additional Balances created during the related Collection Period, conveyed to
the Issuer.

        Net WAC Rate:  With  respect to any Payment  Date,  (i) a per annum rate
equal to the weighted  average of the Net Loan Rates of the Mortgage Loans as of
the first day of the  month  preceding  the  month in which  such  Payment  Date
occurs,  and weighted on the basis of the respective  Principal Balances of such
Mortgage Loans as of the first day of the related Collection Period,  minus (ii)
the premium rate on the Policy multiplied by a fraction,  the numerator of which
is the sum of the Note Balances for each Class of Notes and the  denominator  of
which is the Pool Balance.

                                       16
<PAGE>

     Net Worth: As of any date of determination,  the net worth of GMACM and its
consolidated subsidiaries, as determined in accordance with GAAP.

        Note Balance: With respect to any Payment Date and any Class of Variable
Pay Revolving  Notes or Term Notes,  as applicable,  the Initial Note Balance of
such Class of Variable Pay Revolving Notes or Term Notes reduced by all payments
of principal on such Class of Variable Pay  Revolving  Notes or Term Notes prior
to such  Payment  Date and  increased,  in the case of any Class of Variable Pay
Revolving  Notes,  by each  Advance paid by the holder of such Class of Variable
Pay Revolving Notes or, in the case of the initial  Variable Pay Revolving Note,
by one or more of the  "Purchasers"  under and as defined  in the Note  Purchase
Agreement.

        Note Owner or Owner:  The Beneficial Owner of a Note.
        -------------------

        Note Payment Account:  The account  established by the Indenture Trustee
pursuant to Section  8.02 of the  Indenture  and Section  5.01 of the  Servicing
Agreement.  Amounts deposited in the Note Payment Account will be distributed by
the Indenture Trustee in accordance with Section 3.05 of the Indenture.

        Note Purchase  Agreement:  The note purchase  agreement  dated as of the
Closing  Date,   among  GMACM,  the  Depositor,   Falcon  Asset   Securitization
Corporation,  the Committed  Purchasers  and the  Administrative  Agent,  or any
similar  agreement  entered  into by the  Depositor  and any  other  Holder of a
Variable Pay Revolving Note.

        Note Rate: As to the Notes, the following rates:
        ---------

               Class A-1 Notes:  a floating rate equal to the least of (i) LIBOR
        plus 0.11% per annum (or, for any Interest Period  commencing  after the
        first Payment Date on which the  aggregate  Note Balance of the Notes is
        less than 10% of the Note  Balance as of the  Closing  Date,  LIBOR plus
        0.50% per annum),  (ii) the  related  Net WAC Rate and (iii)  14.00% per
        annum;

               Class A-2 Notes:  a floating rate equal to the least of (i) LIBOR
        plus 0.15% per annum (or, for any Interest Period  commencing  after the
        first Payment Date on which the aggregate  Note Balance is less than 10%
        of the Note  Balance  of the Notes as of the  Closing  Date,  LIBOR plus
        0.50% per annum),  (ii) the  related  Net WAC Rate and (iii)  14.00% per
        annum.

               Class A-3 Notes: a floating rate equal to the lesser of (i) LIBOR
        plus 0.28% per annum (or, for any Interest Period  commencing  after the
        first Payment Date on which the aggregate  Note Balance is less than 10%
        of the Note  Balance  of the Notes as of the  Closing  Date,  LIBOR plus
        0.50% per annum), and (ii) the related Net WAC Rate.

               Variable Pay Revolving Notes: a floating rate equal to the lesser
        of (i)  LIBOR  plus  0.27%  per  annum  (or,  for  any  Interest  Period
        commencing  after the first  Payment  Date on which the  aggregate  Note
        Balance  is less  than 10% of the Note  Balance  of the  Notes as of the
        Closing Date, LIBOR plus 0.50% per annum),  and (ii) the related Net WAC
        Rate.

                                       17
<PAGE>

               The  margin  for the Class A-1 Notes and the Class A-2 Notes will
        increase  to 0.25% per annum,  respectively,  for each  Interest  Period
        beginning  after  the  date  on  which a Early  Amortization  Event  has
        occurred.

     Note Register:  The register  maintained by the Note Registrar in which the
Note Registrar shall provide for the  registration of Notes and of transfers and
exchanges of Notes.

      Note Registrar:  The Indenture Trustee, in its capacity as Note Registrar.

        Noteholder  or Holder:  The Person in whose name a Note is registered in
the  Note  Register,  except  that,  any  Note  registered  in the  name  of the
Depositor,  the Issuer or the Indenture  Trustee or any Affiliate of any of them
shall be deemed not to be  outstanding  and the  registered  holder  will not be
considered   a  Noteholder   for   purposes  of  giving  any  request,   demand,
authorization,  direction,  notice, consent or waiver under the Indenture or the
Trust Agreement;  provided,  that in determining  whether the Indenture  Trustee
shall be  protected  in relying upon any such  request,  demand,  authorization,
direction,  notice,  consent or waiver, only Notes that the Indenture Trustee or
the Owner Trustee knows to be so owned shall be so disregarded.  Owners of Notes
that have been  pledged  in good faith may be  regarded  as  Noteholders  if the
pledgee thereof  establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee such pledgee's right so to act with respect to such Notes and that
such pledgee is not the Issuer,  any other obligor on the Notes or any Affiliate
of any of the foregoing Persons.

        Notes: The Variable Pay Revolving Notes and the Term Notes.
        -----

        Officer's  Certificate:  With  respect to the  Servicer,  a  certificate
signed by the President,  Managing Director,  a Director, a Vice President or an
Assistant  Vice  President,  of the  Servicer  and  delivered  to the  Indenture
Trustee.  With respect to the Issuer,  a  certificate  signed by any  Authorized
Officer of the  Issuer,  under the  circumstances  described  in, and  otherwise
complying  with, the applicable  requirements of Section 10.01 of the Indenture,
and  delivered  to  the  Indenture  Trustee.  Unless  otherwise  specified,  any
reference in the Indenture to an Officer's  Certificate shall be to an Officer's
Certificate of any Authorized Officer of the Issuer.

        Opinion  of  Counsel:  A  written  opinion  of  counsel  of a  law  firm
reasonably  acceptable to the recipient thereof.  Any Opinion of Counsel for the
Servicer  may be  provided by in-house  counsel for the  Servicer if  reasonably
acceptable.

        Original  Pre-Funded  Amount:  The amount deposited from the proceeds of
the sale of the  Securities  into the  Pre-Funding  Account on the Closing Date,
which amount is $135,729,524.02.

     Outstanding:  With respect to the Notes,  as of the date of  determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:

               (i)  Notes  theretofore   cancelled  by  the  Note  Registrar  or
          delivered to the Indenture Trustee for cancellation; and

               (ii) Notes in  exchange  for or in lieu of which other Notes have
        been  executed,  authenticated  and delivered  pursuant to the Indenture
        unless proof satisfactory to the Indenture Trustee is presented that any
        such Notes are held by a holder in due course;

                                       18
<PAGE>

provided,  however,  that for purposes of effectuating  the Enhancer's  right of
subrogation  as set forth in Section 4.12 of the Indenture  only, all Notes that
have been paid  with  funds  provided  under  the  Policy  shall be deemed to be
Outstanding until the Enhancer has been reimbursed with respect thereto.

        Overcollateralization  Amount:  With  respect to any Payment  Date,  the
amount (but not less than zero), if any, by which (a) the sum of the outstanding
Principal  Balance of the Mortgage Loans as of the close of business on the last
day of the related Collection  Period,  together with the property of the Issuer
(including the Pre-Funded Amount (excluding any investment earnings thereon) and
amounts on deposit in the Funding  Account  (excluding any  investment  earnings
thereon)), exceeds (b) the aggregate Note Balance of the Notes.

        Overcollateralization  Target Amount:  Shall mean,  with respect to each
Payment Date (I) prior to the Stepdown  Date,  an amount equal to the sum of (i)
the Base Specified  Overcollateralization  Amount and (ii) 100% of the aggregate
Principal  Balance of  Mortgage  Loans  that are 180 days or more  contractually
delinquent,  as of the last day of the related  Collection  Period or (II) on or
after the  Stepdown  Date,  an amount  equal to the  greatest  of (i) the amount
described  in  clause  (I),  (ii) the sum of (a) the  product  of 2, the  Target
Percentage  and the Pool  Balance as of the last day of the  related  Collection
Period and (b) 100% of the aggregate  Principal  Balance of Mortgage  Loans that
are 180 days or more contractually delinquent, as of the last day of the related
Collection  Period  and (iii)  0.25% of the sum of (a) the  aggregate  Principal
Balances  of the  Initial  Mortgage  Loans  as of the  Cut-Off  Date and (b) the
Original Pre-Funded Amount; provided,  however, if the Excess Spread Test is not
satisfied,  the  Overcollateralization  Target  Amount shall be no less than the
Overcollateralization Target Amount as of the previous Payment Date.

     Owner  Trust:  GMACM  Home  Equity  Loan  Trust  2002-HE3,  created  by the
Certificate of Trust pursuant to the Trust Agreement.

        Owner Trustee:  Wilmington Trust Company, not in its individual capacity
but solely as owner  trustee,  and its  successors  and assigns or any successor
Owner Trustee appointed pursuant to the terms of the Trust Agreement.

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

     Paying Agent:  Any paying agent or co-paying  agent  appointed  pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

     Payment Date: The 25th day of each month,  or if such day is not a Business
Day, then the next Business Day.

        Percentage  Interest:  With  respect to any Note and Payment  Date,  the
percentage  obtained by dividing the Note Balance of such Note by the  aggregate
Note  Balance  of all Notes  prior to such  Payment  Date.  With  respect to any
Certificate and any Payment Date, the Percentage  Interest stated on the face of
such Certificate.

                                       19
<PAGE>

        Permitted Investments:  One or more of the following:

        (i)  obligations  of or  guaranteed  as to principal and interest by the
United States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States;

        (ii) repurchase  agreements on obligations specified in clause (i) above
maturing not more than one month from the date of acquisition thereof; provided,
that  the  unsecured  short-term  debt  obligations  of the  party  agreeing  to
repurchase  such  obligations are at the time rated by each Rating Agency in its
highest short-term rating category available;

        (iii) federal funds,  certificates  of deposit,  demand  deposits,  time
deposits and bankers' acceptances (which shall each have an original maturity of
not more  than 90 days and,  in the case of  bankers'  acceptances,  shall in no
event have an original maturity of more than 365 days or a remaining maturity of
more than 30 days)  denominated in United States dollars of any U.S.  depository
institution or trust company incorporated under the laws of the United States or
any state thereof or of any domestic branch of a foreign depository  institution
or  trust  company;  provided,  that the  short-term  debt  obligations  of such
depository  institution  or trust  company  (or,  if the only  Rating  Agency is
Standard & Poor's,  in the case of the  principal  depository  institution  in a
depository  institution  holding  company,  debt  obligations  of the depository
institution  holding company) at the date of acquisition thereof have been rated
by each Rating Agency in its highest short-term rating category  available;  and
provided further, that if the only Rating Agency is Standard & Poor's and if the
depository or trust company is a principal  subsidiary of a bank holding company
and the debt  obligations  of such  subsidiary  are not  separately  rated,  the
applicable  rating  shall  be that of the bank  holding  company;  and  provided
further,  that if the only Rating  Agency is Standard & Poor's and the  original
maturity of such short-term  debt  obligations of a domestic branch of a foreign
depository  institution  or trust company shall exceed 30 days,  the  short-term
rating of such institution shall be A-1+;

        (iv) commercial paper (having  original  maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state  thereof  which on the date of  acquisition  has been rated by each Rating
Agency in its highest short-term rating category available;  provided, that such
commercial paper shall have a remaining maturity of not more than 30 days;

        (v) a  money  market  fund or a  qualified  investment  fund  (including
without  limitation,  any such  fund  for  which  the  Indenture  Trustee  or an
Affiliate of the  Indenture  Trustee  acts as an advisor or a manager)  rated by
each  Rating  Agency  in one of its  two  highest  long-term  rating  categories
available (if so rated by such Rating Agency); and

        (vi) other  obligations or securities that are acceptable to each Rating
Agency as a Permitted  Investment  hereunder  and will not cause a Rating Event,
and which are acceptable to the Enhancer, as evidenced in writing;

provided,  however,  that no  instrument  shall be a Permitted  Investment if it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive 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

                                       20
<PAGE>

to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.   References  herein  to  the  highest  long-term  rating  category
available debt shall mean AAA in the case of Standard & Poor's,  Aaa in the case
of  Moody's  and AAA in the case of  Fitch,  if rated by Fitch,  and  references
herein to the highest short-term rating category available shall mean A-1 in the
case of  Standard  & Poor's,  P-1 in the case of  Moody's  and F1 in the case of
Fitch, if rated by Fitch.

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

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

     Plan Assets:  The meaning specified in Section 2510.3-101 of the Department
of Labor Regulations and as described in Section 3.05 of the Trust Agreement.

     Policy: The Note Guaranty Insurance Policy #38897,  dated as of the Closing
Date, issued by the Enhancer.

     Policy Draw Amount: With respect to any Payment Date, the Insured Amount.

     Pool Balance:  With respect to any date, the aggregate Principal Balance of
all  Mortgage  Loans as of such date and  (during  the  Pre-Funding  Period) the
Pre-Funded Amount.

        Pre-Funded Amount: With respect to any date of determination  during the
Pre-Funding Period, the amount on deposit in the Pre-Funding Account.

        Pre-Funding  Account: The account established and maintained pursuant to
Section 3.17 of the Servicing Agreement.

        Pre-Funding  Period: The period commencing on the Closing Date until the
earliest  of (i) the date on which the  amount  on  deposit  in the  Pre-Funding
Account is less than $50,000,  (ii) November 26, 2002 or (iii) the occurrence of
a Rapid Amortization Event.

        Predecessor  Note:  With  respect  to  any  Note,  every  previous  Note
evidencing  all or a portion  of the same debt as that  evidenced  by such Note;
and, for the purpose of this definition,  any Note  authenticated  and delivered
under Section 4.03 of the Indenture in lieu of a mutilated,  lost,  destroyed or
stolen Note shall be deemed to evidence the same debt as such  mutilated,  lost,
destroyed or stolen Note.

        Principal  Balance:  With  respect to any  Mortgage  Loan,  other than a
Liquidated  Mortgage Loan, and as of any day, the related Cut-Off Date Principal
Balance,  plus (i) any  Additional  Balances  in respect of such  Mortgage  Loan
conveyed  to the Trust,  minus (ii) all  collections  credited as  principal  in
respect of any such Mortgage Loan in accordance  with the related Loan Agreement

                                       21
<PAGE>

(except any such  collections  that are  allocable to any  Excluded  Amount) and
applied in  reduction of the  Principal  Balance  thereof.  For purposes of this
definition,  a  Liquidated  Mortgage  Loan  shall be deemed to have a  Principal
Balance equal to the Principal  Balance of the related Mortgage Loan immediately
prior to the final recovery of substantially  all related  Liquidation  Proceeds
and a Principal Balance of zero thereafter.

     Principal  Collections:  With respect to any Payment Date, the aggregate of
the following amounts:

        (i) the total  amount of  payments  made by or on behalf of the  related
Mortgagor,  received and applied as payments of principal on such  Mortgage Loan
during the related Collection Period, as reported by the Servicer or the related
Subservicer;

        (ii) any  Liquidation  Proceeds  allocable  as a recovery  of  principal
received in connection  with such  Mortgage  Loan during the related  Collection
Period;

        (iii) if such Mortgage Loan was  repurchased by a Seller pursuant to the
Purchase Agreement during the related  Collection Period,  100% of the Principal
Balance  thereof as of the date of such purchase and if any Eligible  Substitute
Loan is substituted for a Deleted Loan, the Substitution Adjustment Amount; and

        (iv) any other  amounts  received  as  payments  on or  proceeds of such
Mortgage Loan during the Collection  Period,  to the extent applied in reduction
of the Principal Balance thereof;

provided,  that Principal  Collections shall be reduced by any amounts withdrawn
from the  Custodial  Account  pursuant to clauses (c),  (i), (j), (l) and (m) of
Section 3.03 of the  Servicing  Agreement,  and shall not include any portion of
such amounts attributable to any Excluded Amount in respect of any Mortgage Loan
that are allocable to principal of such Mortgage Loan and not otherwise excluded
from the amounts specified in (i) through (iv) above.

        Principal  Distribution  Amount:  For any  Payment  Date (i)  during the
Revolving Period, the amount, if any,  transferred from the Pre-Funding  Account
to the Note  Payment  Account  pursuant  to  Section  3.17(b)  of the  Servicing
Agreement,  and the amount, if any,  transferred from the Funding Account to the
Note Payment Amount pursuant to Section 3.18(c)(ii) of the Servicing  Agreement,
(ii) during the Managed Amortization  Period, Net Principal  Collections for the
Mortgage  Loans,   (iii)  during  the  Rapid  Amortization   Period,   Principal
Collections for the Mortgage Loans, (iv) after an Early Amortization  Event, any
amount in the Reserve Sub-Account,  and (v) on any Payment Date, from the Excess
Spread, to the extent available or, to the extent not available,  from a draw on
the Policy (but only to the extent the Overcollateralization Amount is zero), an
amount equal to the aggregate of the Liquidation Loss Amounts,  if any, for such
Payment Date.

     Proceeding:  Any  suit  in  equity,  action  at law or  other  judicial  or
administrative proceeding.

     Program Guide:  The GMACM Home Equity  Servicing  Guidelines,  as in effect
from time to time.

                                       22
<PAGE>

     Prospectus  Supplement:  The prospectus  supplement  dated August 28, 2002,
relating to the Notes.

     Purchase  Agreement:  The mortgage loan purchase  agreement dated as of the
Closing Date,  among the Sellers,  the  Purchaser,  the Issuer and the Indenture
Trustee.

     Purchase  Price:  The amounts  specified in Section  2.3(a) of the Purchase
Agreement.

     Purchaser:  Residential Asset Mortgage  Products,  Inc., as purchaser under
the Purchase Agreement.

        Rapid Amortization Event:  Any one of the following events:

(a) the  failure  on the part of a Seller  (i) to make any  payment  or  deposit
required to be made under the Purchase Agreement within five Business Days after
the date such  payment or deposit is required to be made;  or (ii) to observe or
perform in any material  respect any other covenants or agreements of the Seller
set forth in the Purchase  Agreement,  which failure continues  unremedied for a
period of 60 days after written notice and such failure materially and adversely
affects the interests of the Securityholders or the Enhancer; provided, however,
that a Rapid  Amortization  Event  shall not be deemed to have  occurred if such
Seller  has  repurchased  or caused to be  repurchased  or  substituted  for the
affected  Mortgage Loan during such period (or within an additional 60 days with
the consent of the Indenture  Trustee and the  Enhancer) in accordance  with the
provisions of the Indenture;

(b) if any representation or warranty made by a Seller in the Purchase Agreement
proves  to have  been  incorrect  in any  material  respect  when made and which
continues to be  incorrect in any material  respect for a period of 45 days with
respect to any  representation  or warranty of the Seller made in Section 3.1(a)
or 3.1(c)(I),  as applicable,  of the Purchase Agreement or 90 days with respect
to any  representation  or warranty  made in Section  3.1(b) or  3.1(c)(II),  as
applicable,  of the Purchase  Agreement  after written notice and as a result of
which the interests of the  Securityholders  or the Enhancer are  materially and
adversely affected; provided, however, that a Rapid Amortization Event shall not
be  deemed  to have  occurred  if the  Seller  has  repurchased  or caused to be
repurchased or substituted for the affected Mortgage Loan during such period (or
within an additional  60 days with the consent of the Indenture  Trustee and the
Enhancer) in accordance with the provisions of the Indenture;

(c) the  entry  against  a Seller  of a decree  or order by a court or agency or
supervisory  authority having  jurisdiction  under Title 11 of the United States
Code or any other applicable  federal or state  bankruptcy,  insolvency or other
similar  law,  or  if  a  receiver,   assignee  or  trustee  in   bankruptcy  or
reorganization,  liquidator,  sequestrator  or similar  official shall have been
appointed  for or taken  possession  of the  Servicer or its  property,  and the
continuance  of any such decree or order  unstayed and in effect for a period of
60 consecutive days;

(d) either Seller shall voluntarily  submit to Proceedings under Title 11 of the
United  States  Code  or any  other  applicable  federal  or  state  bankruptcy,
insolvency  or other  similar law  relating to the Seller or the Issuer or of or
relating  to all or  substantially  all of its  property;  or the  Seller or the
Issuer shall admit in writing its  inability to pay its debts  generally as they
become due, file a petition to take  advantage of any  applicable  insolvency or
reorganization  statute,  make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations;

                                       23
<PAGE>

(e) the Issuer  shall  become  subject to  regulation  by the  Commission  as an
investment  company within the meaning of the Investment Company Act of 1940, as
amended;

(f) a  Servicing  Default  shall  occur and be  unremedied  under the  Servicing
Agreement and a qualified successor Servicer shall not have been appointed;

(g) the  occurrence  of a draw on the Policy and the failure by the  Servicer to
reimburse  the  Enhancer  for any amount  owed to the  Enhancer  pursuant to the
Insurance  Agreement on account of the draw, which failure continues  unremedied
for a period of 90 days after written notice to the Servicer;

(h) the Issuer (or a portion  thereof) is  determined  to be a taxable  mortgage
pool  or  an  association  (or  a  publicly-traded  partnership)  taxable  as  a
corporation or a taxable mortgage pool for federal income tax purposes; or

(i) an event of default under the Insurance  Agreement  (except for a default by
the  Enhancer,  unless  such  Enhancer  cannot be  replaced  without  additional
expense).

       In the case of any event  described in (a), (b), (f), (g) or (i), a Rapid
Amortization  Event  shall  be  deemed  to have  occurred  only  if,  after  any
applicable grace period described in such clauses, any of the Indenture Trustee,
the Enhancer or, with the consent of the  Enhancer,  Securityholders  evidencing
not less than 51% of the aggregate  Securities Balance, by written notice to the
Sellers, the Servicer, the Depositor and the Owner Trustee (and to the Indenture
Trustee, if given by the Enhancer or the Securityholders),  declare that a Rapid
Amortization  Event has occurred as of the date of such  notice.  In the case of
any event described in clauses (c), (d), (e) or (h), a Rapid  Amortization Event
shall be deemed to have occurred  without any notice or other action on the part
of the Indenture Trustee,  the Securityholders or the Enhancer  immediately upon
the occurrence of such event; provided, that any Rapid Amortization Event may be
waived and deemed of no effect with the written consent of the Enhancer and each
Rating Agency, subject to the satisfaction of any conditions to such waiver.

        Rapid  Amortization  Period:  The period beginning on the earlier of (i)
the first Payment Date following the end of the Managed  Amortization Period and
(ii)  the  occurrence  of a  Rapid  Amortization  Event,  and  ending  upon  the
termination of the Issuer.

        Rating Agency: Each of Moody's, Standard & Poor's, Fitch or, if any such
organization or a successor  thereto is no longer in existence,  such nationally
recognized   statistical  rating  organization,   or  other  comparable  Person,
designated by the Depositor,  notice of which  designation shall be given to the
Indenture Trustee.  References herein to the highest short term unsecured rating
category of a Rating  Agency  shall mean A-1 or better in the case of Standard &
Poor's,  P-1 or  better in the case of  Moody's  and F1 or better in the case of
Fitch;  and in the case of any other Rating Agency,  shall mean such  equivalent
ratings.  References herein to the highest long-term rating category of a Rating
Agency  shall mean "AAA" in the case of Standard & Poor's,  "Aaa" in the case of
Moody's  and  "AAA" in the case of Fitch;  and in the case of any  other  Rating
Agency, shall mean such equivalent rating.

                                       24
<PAGE>

     Rating Event: The qualification, reduction or withdrawal by a Rating Agency
of its then-current rating of the Notes.

        Record  Date:  With  respect to the Notes and any Payment  Date,  unless
Notes are no longer  held in  book-entry  form,  the  close of  business  on the
Business  Day  immediately  preceding  such Payment Date and if the Notes are no
longer held in  book-entry  form,  the last  Business Day of the calendar  month
preceding the month of such Payment Date.

        Recovery Fee: A customary fee  calculated  based on additional  recovery
amounts  charged for the collection of such additional  recovery  amounts on any
Mortgage  Loan  after the date  that  such  Mortgage  Loan  became a  Liquidated
Mortgage Loan.

        Reference Bank Rate:  With respect to any Interest  Period,  as follows:
the arithmetic mean (rounded upwards, if necessary, to the nearest one sixteenth
of one 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, England
time,  on the second LIBOR  Business Day prior to the first day of such Interest
Period to prime banks in the London  interbank  market in amounts  approximately
equal to the sum of the outstanding Note Balance of the Notes; provided, that at
least two  Reference  Banks  provide such rate. If fewer than two such rates are
provided,  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  Indenture
Trustee after consultation with the Servicer and the Enhancer, as of 11:00 a.m.,
New York 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 Note
Balance of the Notes. If no quotations can be obtained,  the Reference Bank Rate
will be the Reference Bank Rate applicable to the preceding Interest Period.

     Reference  Banks:  Shall mean  three  major  banks in the London  interbank
market selected by the Indenture Trustee after consultation with the Servicer.

     Related  Documents:  With  respect to each  Mortgage  Loan,  the  documents
contained in the Mortgage File.

        Relief  Act  Shortfalls:  With  respect  to any  Payment  Date,  for any
Mortgage  Loan as to which there has been a reduction  in the amount of interest
collectible  thereon  for the  related  Collection  Period  as a  result  of the
application  of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
or any similar state legislation or regulations, the shortfall, if any, equal to
(i) one month's  interest on the Principal  Balance of such Mortgage Loan at the
applicable Loan Rate,  over (ii) the interest  collectible on such Mortgage Loan
during such Collection Period.

     Representative:  Banc One Capital Markets,  Inc., as  representative of the
Underwriters.

        Repurchase  Event:  With  respect  to any  Mortgage  Loan,  either (i) a
discovery that, as of the Closing Date with respect to an Initial  Mortgage Loan
or the related Subsequent  Transfer Date with respect to any Subsequent Mortgage
Loan,  the  related  Mortgage  was not a valid  lien  on the  related  Mortgaged
Property  subject  only to (A) the lien of any prior  mortgage  indicated on the
Mortgage Loan Schedule,  (B) the lien of real property taxes and assessments not
yet due and payable, (C) covenants, conditions, and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such
Mortgage and such other permissible title exceptions as are customarily accepted
for similar  loans and (D) other matters to which like  properties  are commonly
subject that do not materially  adversely  affect the value,  use,  enjoyment or
marketability  of the related  Mortgaged  Property  or (ii) with  respect to any
Mortgage Loan as to which either Seller  delivers an affidavit  certifying  that
the original Loan Agreement has been lost or destroyed,  a subsequent default on
such  Mortgage  Loan if the  enforcement  thereof or of the related  Mortgage is
materially  and  adversely  affected  by  the  absence  of  such  original  Loan
Agreement.

        Repurchase  Price:  With  respect to any  Mortgage  Loan  required to be
repurchased  on any date pursuant to the Purchase  Agreement or purchased by the
Servicer pursuant to the Servicing Agreement,  an amount equal to the sum of (i)
100% of the Principal Balance thereof (without reduction for any amounts charged
off) and (ii) unpaid  accrued  interest at the Loan Rate (or with respect to the
last day of the month in the month of repurchase, the Loan Rate will be the Loan
Rate in effect as of the  second to last day in such  month) on the  outstanding
Principal  Balance  thereof from the Due Date to which interest was last paid by
the  related  Mortgagor  to the first day of the  month  following  the month of
purchase.  No portion of any Repurchase  Price shall be included in any Excluded
Amount for any Payment Date during the Rapid Amortization Period.

                                       25
<PAGE>

        Required  Insurance  Policy:  With  respect to any  Mortgage  Loan,  any
insurance  policy which is required to be maintained from time to time under the
Servicing  Agreement  or the related  Subservicing  Agreement in respect of such
Mortgage Loan.

        Required  Ratings:  Shall mean,  at any time with respect to any Person,
that either (a) the  short-term  unsecured debt of such Person is rated at least
two of the following ratings:  "A-1" by Standard & Poor's,  "P-1" by Moody's and
"F1" by Fitch or (b) the  long-term  unsecured  debt of such  Person is rated at
least two of the following  ratings:  "A" by Standard & Poor's,  "A2" by Moody's
and "A" by Fitch.

        Reserve   Sub-Account:   A  sub-account   within  the  Funding   Account
established and maintained pursuant to Section 3.20 of the Servicing Agreement.

        Responsible Officer:  With respect to the Indenture Trustee, any officer
of the Indenture Trustee with direct  responsibility  for the  administration of
the Trust  Agreement and also,  with respect to a particular  matter,  any other
officer to whom such matter is referred  because of such officer's  knowledge of
and familiarity with the particular subject.

        Revolving Period: The period beginning on the Closing Date and ending on
the  earlier of (i) the  Payment  Date  occurring  in  February  2004,  (ii) the
occurrence  of an event  described  in clause  (iv) of the  definition  of Early
Amortization Event and (iii) the occurrence of a Rapid Amortization Event.

        Rolling Six-Month Annualized  Liquidation Loss Amounts:  With respect to
any  Determination  Date,  the product  (expressed as a  percentage)  of (i) the
aggregate  Liquidation  Loss Amounts as of the end of each of the six Collection
Periods  (reduced by the  aggregate  Subsequent  Net  Recovery  Amounts for such
Collection Periods) immediately preceding such Determination Date divided by the
Initial Pool Balance and (ii) two (2).

        Secretary of State:  The Secretary of State of the State of Delaware.
        ------------------

                                       26
<PAGE>

     Securities  Act: The Securities Act of 1933, as amended,  and the rules and
regulations promulgated thereunder.

     Securities Balance: The Note Balance or Certificate Balance, as the context
may require.

        Security:  Any Certificate or a Note, as the context may require.

        Securityholder:  Any Noteholder or Certificateholder.

        Seller  or  Sellers:   GMAC   Mortgage   Corporation,   a   Pennsylvania
corporation, and its successors and assigns and Walnut Grove Mortgage Loan Trust
2001-A, a Delaware business trust, and its successors and assigns.

     Servicer: GMAC Mortgage Corporation,  a Pennsylvania  corporation,  and its
successors and assigns.

     Servicing  Agreement:  The servicing agreement dated as of the Closing Date
among the Servicer, the Issuer and the Indenture Trustee.

     Servicing Certificate:  A certificate completed and executed by a Servicing
Officer  on  behalf of the  Servicer  in  accordance  with  Section  4.01 of the
Servicing Agreement.

        Servicing Default:  Any one of the following events:

(i) any failure by the Servicer to deposit in the Custodial Account, the Funding
Account, the Reserve  Sub-Account,  the Note Payment Account or the Distribution
Account  any  deposit  required  to be made  under  the  terms of the  Servicing
Agreement that continues unremedied for a period of five Business Days after the
date upon  which  written  notice of such  failure  shall have been given to the
Servicer by the Issuer or the Indenture Trustee, or to the Servicer,  the Issuer
and the Indenture Trustee by the Enhancer;

(ii) any failure on the part of the  Servicer  duly to observe or perform in any
material  respect any other covenants or agreements of the Servicer set forth in
the  Securities  or in the Servicing  Agreement,  which  failure,  in each case,
materially  and adversely  affects the interests of the  Securityholders  or the
Enhancer,  and which failure continues  unremedied for a period of 45 days after
the date on which  written  notice  of such  failure,  requiring  the same to be
remedied,  and  stating  that such  notice is a "Notice  of  Default"  under the
Servicing Agreement,  shall have been given to the Servicer by the Issuer or the
Indenture Trustee,  or to the Servicer,  the Issuer and the Indenture Trustee by
the Enhancer;

(iii) the entry  against the  Servicer of a decree or order by a court or agency
or supervisory authority having jurisdiction under Title 11 of the United States
Code or any other applicable  federal or state  bankruptcy,  insolvency or other
similar  law,  or  if  a  receiver,   assignee  or  trustee  in   bankruptcy  or
reorganization,  liquidator,  sequestrator  or similar  official shall have been
appointed  for or taken  possession  of the  Servicer or its  property,  and the
continuance  of any such decree or order  unstayed and in effect for a period of
60 consecutive days;

                                       27
<PAGE>

(iv) the Servicer shall voluntarily  submit to Proceedings under Title 11 of the
United  States  Code  or any  other  applicable  federal  or  state  bankruptcy,
insolvency  or other  similar law  relating to the Servicer or of or relating to
all or substantially all of its property; or the Servicer shall admit in writing
its inability to pay its debts  generally as they become due, file a petition to
take advantage of any applicable  insolvency or reorganization  statute, make an
assignment  for the benefit of its creditors or voluntarily  suspend  payment of
its obligations;

(v) a Rapid Amortization Event occurs on account of the circumstances  specified
in  clause  (g) of the  definition  of Rapid  Amortization  Event,  which  event
continues beyond the 90 day grace period set forth in such clause (g);

(vi) the Servicer's Tangible Net Worth at any time is less than $100,000,000 and
GMAC fails to own,  directly or indirectly,  at least 51% of the common stock of
the Servicer; or

(vii) the Rolling Six-Month  Annualized  Liquidation Loss Amount with respect to
the Mortgage Loans exceeds 1.50%.

        Servicing  Fee:  With  respect to any Mortgage  Loan and any  Collection
Period,  the product of (i) the  Servicing  Fee Rate  divided by 12 and (ii) the
related Principal Balance as of the first day of such Collection Period.

        Servicing Fee Rate:  0.50% per annum.
        ------------------

        Servicing  Officer:   Any  officer  of  the  Servicer  involved  in,  or
responsible  for, the  administration  and servicing of the Mortgage Loans whose
name and specimen  signature appear on a list of servicing officers furnished to
the Indenture  Trustee  (with a copy to the  Enhancer) by the Servicer,  as such
list may be amended from time to time.

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

        Stated Value: With respect to any Mortgage Loan, the stated value of the
related Mortgaged  Property  determined in accordance with the Program Guide and
given by the related Mortgagor in his or her application.

        Stepdown  Date: The later of (i) the Payment Date in March 2005 and (ii)
the Payment Date on which the Pool Balance (after applying  payments received in
the related  Collection  Period) as of such Payment Date is less than 50% of the
Initial Pool Balance.

     Subsequent Cut-Off Date: With respect to any Subsequent  Mortgage Loan, the
date specified in the related Subsequent Transfer Agreement.

        Subsequent  Cut-Off  Date  Principal   Balance:   With  respect  to  any
Subsequent  Mortgage  Loan,  the  Principal  Balance  thereof as of the close of
business  on the  last day of the  Collection  Period  immediately  prior to the
related Subsequent Cut-Off Date.

                                       28
<PAGE>

        Subsequent  Mortgage Loan: An adjustable rate home equity revolving line
of credit sold by a Seller to the Issuer pursuant to Section 2.2 of the Purchase
Agreement,  such  Mortgage  Loan being  identified on the Mortgage Loan Schedule
attached  to the related  Subsequent  Transfer  Agreement,  as set forth in such
Subsequent Transfer Agreement.

     Subsequent Net Recovery Amounts: Amounts collected on a Mortgage Loan after
the ortgage Loan becomes a Liquidated Mortgage Loan, net of any Recovery Fee.

        Subsequent Transfer Agreement:  Each Subsequent Transfer Agreement dated
as of a  Subsequent  Transfer  Date  executed by the  respective  Seller and the
Issuer  substantially  in the form of Exhibit 2 to the  Purchase  Agreement,  by
which the related Subsequent Mortgage Loans are sold to the Issuer.

     Subsequent   Transfer  Date:  With  respect  to  each  Subsequent  Transfer
Agreement,  the date on which the related Subsequent  Mortgage Loans are sold to
the Issuer.

     Subservicer:  Each Person that enters into a  Subservicing  Agreement  as a
subservicer of Mortgage Loans.

        Subservicing  Agreement:  The written  contract between the Servicer and
any Subservicer  relating to servicing and  administration  of certain  Mortgage
Loans as provided in Section 3.01 of the Servicing Agreement.

        Substitution  Adjustment Amount: With respect to any Eligible Substitute
Loan and any Deleted Loan, the amount, if any, as determined by the Servicer, by
which the aggregate  principal balance of all such Eligible  Substitute Loans as
of the date of substitution is less than the aggregate  Principal Balance of all
such Deleted Loans (after  application  of the principal  portion of the Monthly
Payments  due in the month of  substitution  that are to be  distributed  to the
Securityholders in the month of substitution).

        Tangible Net Worth:  Net Worth,  less the sum of the following  (without
duplication):  (a) any other assets of GMACM and its  consolidated  subsidiaries
that would be treated as intangibles under GAAP including,  without  limitation,
any  write-up of assets  (other than  adjustments  to market value to the extent
required  under GAAP with  respect to excess  servicing,  residual  interests in
offerings  of  asset-backed  securities  and  asset-backed  securities  that are
interest-only   securities),   good-will,   research  and   development   costs,
trade-marks,  trade names, copyrights, patents and unamortized debt discount and
expenses and (b) loans or other extensions of credit to officers of GMACM or its
consolidated  subsidiaries other than mortgage loans made to such Persons in the
ordinary course of business.

        Targeted Final Payment Date: Shall mean (i) for the Class A-1 Notes, the
Payment  Date  occurring  in February  2004,  (ii) for the Class A-2 Notes,  the
Payment Date  occurring in August 2005 and for the Class A-3 Notes,  the Payment
Date occurring in August 2007.

        Target Percentage:  Shall mean 0.50%.
        -----------------

                                       29
<PAGE>

        Tax Matters Partner: GMACM, as the Servicer, for so long as the Servicer
holds all or any portion of the Certificates;  if any other Person holds 100% of
the Certificates, such Person; and otherwise as provided in the Code.

        Telerate  Screen Page 3750: The display page so designated on the Bridge
Telerate  Capital Markets Report (or such other page as may replace page 3750 on
such service for the purpose of  displaying  London  interbank  offered rates of
major banks,  or, if such service is no longer  offered,  such other service for
displaying London interbank offered rates or comparable rates as may be selected
by the Indenture Trustee after consultation with the Servicer.

     Term  Notes:  The  Class A-1  Notes,  the Class A-2 Notes and the Class A-3
Notes.

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

        Transfer Date:  The Payment Date on which the Servicer,  upon receipt of
written  notice and  direction  from the Issuer,  shall cause the  retransfer of
Mortgage Loans from the Trust Estate to the Issuer,  pursuant to Section 3.15(c)
of the Servicing Agreement.

        Transfer  Notice Date: The fifth Business Day prior to the Transfer Date
for which the Servicer shall give the Indenture Trustee, the Rating Agencies and
the Enhancer a notice of the proposed retransfer of Mortgage Loans,  pursuant to
Section 3.15(c) of the Servicing Agreement.

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

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

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

     Trust Agreement:  The trust agreement dated as of the Closing Date, between
the Owner Trustee and the Depositor.

     Trust  Estate:  The  meaning  specified  in  the  Granting  Clause  of  the
Indenture.

        Trust  Indenture Act or TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.

     UCC: The Uniform  Commercial  Code,  as in effect from time to time,  as in
effect in any specified jurisdiction.

     Underwriters:  Each of Banc One Capital Markets,  Inc., Bear, Stearns & Co.
Inc. and GMAC Commercial Holding Capital Markets Corp.

                                       30
<PAGE>

        Underwriting  Agreement:  The  underwriting  agreement  dated August 26,
2002, between GMACM, the Depositor, the Representative, as representative of the
underwriters set forth in the Underwriting Agreement and GMAC Commercial Holding
Capital Markets Corp.

        Uniform Single  Attestation  Program for Mortgage  Bankers:  The Uniform
Single  Attestation  Program for Mortgage Bankers,  as published by the Mortgage
Bankers  Association  of America and  effective  with respect to fiscal  periods
ending on or after December 15, 1995.

       Unpaid Principal Amount:  As defined in Section 3.05(a) of the Indenture.

        Variable Pay Revolving Note: The GMACM Home Equity Loan-Backed  Variable
Pay Revolving  Notes,  Series 2002-HE3,  in substantially  the form set forth in
Exhibit A-2 to the Indenture.

     WG Trust 2001: Walnut Grove Mortgage Loan Trust 2001-A, a Delaware business
trust.

                                       31
<PAGE>

                                 EXECUTION COPY

                                   APPENDIX A

                                   DEFINITIONS

               Accrued Certificate  Interest:  With respect to each Payment Date
and the REMIC I or REMIC II Regular  Interests or the REMIC III Regular Interest
SB-IO,  the  Uncertificated  Accrued Interest for such Regular  Interests.  With
respect to the Class SB-I  Certificates,  interest  accrued  during the  related
Interest  Period at the  Certificate  Rate for such  Certificate  on the related
Notional Amount for such Payment Date.

               Additional  Balance:  With respect to any HELOC,  any future Draw
made by the related  Mortgagor  pursuant to the related Loan Agreement after the
Cut-off Date; provided,  however, that if an Amortization Event occurs, then any
Draw after such Amortization  Event shall not be acquired by the Trust and shall
not be an Additional Balance.

               Additional  Balance  Differential:  With  respect to any  Payment
Date, unless and until an Amortization Event occurs, (x) up to and including the
Payment Date occurring in the calendar  month during which the Revolving  Period
ends,  the amount,  if any, by which  Additional  Balances  resulting from Draws
under  the  HELOCs  during  the  related   Collection  Period  exceed  Principal
Collections  during  such  Collection  Period  and (y)  after the  Payment  Date
occurring in the calendar  month during  which the  Revolving  Period ends,  the
aggregate amount of Additional Balances conveyed to the Trust during the related
Collection Period.

               Additional  Certificate  Security  Balance:  With  respect to the
issuance of Capped Funding Notes  pursuant to Section  4.01(d) of the Indenture,
the  amount,  if any,  required  in  accordance  with the  Opinion of Counsel in
connection therewith to be added to the Security Balances of the Certificates in
accordance with Section 3.12 of the Trust Agreement.  In addition,  with respect
to any Payment Date described in the second  sentence of Section  3.12(a) of the
Trust Agreement, the "Additional Certificate Security Balance" shall include the
amount of the excess described in such sentence.

               Adjusted  Mortgage Rate: With respect to any Home Equity Loan and
any date of determination,  the Loan Rate borne by the related Home Equity Loan,
less the rate at which the related Subservicing Fee accrues.

     Adverse REMIC Event: As defined in Section 11.01(f) of the Indenture.

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

               Aggregate  Additional Balance  Differential:  With respect to any
Payment  Date and any  Variable  Funding  Note,  the sum of  Additional  Balance
Differentials  that have been added to the  Security  Balance  of such  Variable
Funding Note prior to such Payment Date.

                                       1
<PAGE>

     Aggregate Security Balance: With respect to any Payment Date, the aggregate
of the Security Balances of all Securities or specified Classes of Securities as
of such date.

     Amortization Event: Any one of the following events:

               (a) the failure on the part of the Seller (i) to make any payment
        or deposit required to be made under the Purchase  Agreement within five
        Business  Days after the date such  payment or deposit is required to be
        made;  or (ii) to observe or perform in any  material  respect any other
        covenants  or  agreements  of the  Seller  set  forth  in  the  Purchase
        Agreement,  which failure  continues  unremedied for a period of 60 days
        after written notice and such failure  materially and adversely  affects
        the interests of the Securityholders or the Credit Enhancer;

               (b) if any  representation  or warranty made by the Seller in the
        Purchase Agreement proves to have been incorrect in any material respect
        when made and which  continues to be  incorrect in any material  respect
        for a period of 45 days with respect to any  representation  or warranty
        of the Seller made in Section  3.1(a) of the  Purchase  Agreement  or 90
        days with  respect to any  representation  or  warranty  made in Section
        3.1(b) or 3.1(c) of the Purchase Agreement after written notice and as a
        result of which  the  interests  of the  Securityholders  or the  Credit
        Enhancer are materially and adversely affected;  provided, however, that
        an  Amortization  Event  shall not be deemed to occur if the  Seller has
        repurchased or caused to be  repurchased or substituted  for the related
        Home Equity Loan or all Home Equity Loans,  if  applicable,  during such
        period  (or  within  an  additional  60 days  with  the  consent  of the
        Indenture  Trustee  and the  Credit  Enhancer)  in  accordance  with the
        provisions of the Indenture;

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

               (d)  the  Seller  or  the  Issuer  shall   voluntarily   go  into
        liquidation,  consent to the  appointment  of a  conservator,  receiver,
        liquidator or similar person in any  insolvency,  readjustment  of debt,
        marshalling  of assets  and  liabilities  or similar  proceedings  of or
        relating  to  the  Seller  or the  Issuer  or of or  relating  to all or
        substantially  all of its  property,  or a  decree  or order of a court,
        agency or supervisory  authority having jurisdiction in the premises for
        the appointment of a conservator, receiver, liquidator or similar person
        in any  insolvency,  readjustment  of debt,  marshalling  of assets  and
        liabilities or similar proceedings, or for the winding-up or liquidation
        of its affairs, shall have been entered against the Seller or the Issuer
        and such  decree or order  shall have  remained  in force  undischarged,
        unbonded  or  unstayed  for a period  of 60 days;  or the  Seller or the
        Issuer shall admit in writing its  inability to pay its debts  generally
        as they become due, file a petition to take  advantage of any applicable
        insolvency or reorganization statute, make an assignment for the benefit
        of its creditors or voluntarily suspend payment of its obligations;

                                       2
<PAGE>

               (e) the Issuer becomes subject to regulation by the Commission as
        an investment  company within the meaning of the Investment  Company Act
        of 1940, as amended;

               (f) a Servicing  Default  relating to the Master  Servicer occurs
          under the Servicing Agreement and the Master Servicer is the Seller;

               (g) the  aggregate of all draws under the Group II Policy  (other
        than draws with respect to the  Undercollateralization  Amount)  exceeds
        1.0% of the Cut-off Date Loan Balance of the Group II Loans; or

               (h) the Issuer is  determined to be an  association  taxable as a
          corporation for federal income tax purposes.

               In the case of any event  described  in (a),  (b), (f) or (g), an
Amortization Event will be deemed to have occurred only if, after any applicable
grace period described in such clauses, any of the Indenture Trustee, the Credit
Enhancer or, with the consent of the Credit Enhancer, Securityholders evidencing
not less  than 51% of the  Security  Balance  of each of the Term  Notes and the
Certificates,  by  written  notice  to the  Seller,  the  Master  Servicer,  the
Depositor and the Owner Trustee (and to the Indenture  Trustee,  if given by the
Credit Enhancer or the Securityholders),  declare that an Amortization Event has
occurred as of the date of such  notice.  In the case of any event  described in
clauses  (c),  (d),  (e) or (h),  an  Amortization  Event will be deemed to have
occurred  without  any  notice  or other  action  on the  part of the  Indenture
Trustee,  the Noteholders or the Credit Enhancer immediately upon the occurrence
of such event; provided, that any Amortization Event may be waived and deemed of
no effect  with the  written  consent of the  Credit  Enhancer  and each  Rating
Agency, subject to the satisfaction of any conditions to such waiver.

               Appraised Value: As to any Mortgaged  Property,  the value of the
related  Mortgaged  Property  determined by the appraisal,  sales price for such
Mortgaged  Property or  alternative  valuation  method,  including a statistical
valuation or the Stated Value, used in the origination of such Home Equity Loan,
which  may have been  obtained  at an  earlier  time but in no case more than 24
months  prior  to  origination;  provided  that if such  Home  Equity  Loan  was
originated  simultaneously with or not more than 12 months after the origination
of a mortgage  loan secured by a senior lien on the related  Mortgaged  Property
which  senior  lien  was   originated  in  a  purchase  or  cash-out   refinance
transaction,  the Appraised Value shall be the lesser of (i) the appraised value
of such  Mortgaged  Property  based upon the  appraisal  made at the time of the
origination of such senior  mortgage,  and (ii) the sales price of the Mortgaged
Property at such time of origination.

               Assignment  of  Mortgage:   With  respect  to  any  Mortgage,  an
assignment,  notice of transfer or equivalent  instrument,  in recordable  form,
sufficient  under the laws of the  jurisdiction  in which the related  Mortgaged
Property is located to reflect the conveyance of the Mortgage, which assignment,
notice of transfer or  equivalent  instrument  may be in the form of one or more
blanket assignments  covering Mortgages secured by Mortgaged  Properties located
in the same jurisdiction.

                                       3
<PAGE>

               Authorized  Newspaper:  A newspaper of general circulation in the
Borough of Manhattan,  The City of New York, printed in the English language and
customarily  published  on  each  Business  Day,  whether  or not  published  on
Saturdays, Sundays or holidays.

               Authorized  Officer:  With respect to the Issuer,  any officer of
the Owner  Trustee  who is  authorized  to act for the Owner  Trustee in matters
relating to the Issuer and who is identified on the list of Authorized  Officers
delivered by the Owner Trustee to the Indenture  Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter).

               Bankruptcy Code:  The Bankruptcy Code of 1978, as amended.

               Bankruptcy  Loss:  With  respect  to  any  Home  Equity  Loan,  a
Deficient Valuation or a Debt Service Reduction; provided, however, that neither
a Deficient  Valuation nor a Debt Service Reduction shall be deemed a Bankruptcy
Loss hereunder so long as the Master Servicer has notified the Indenture Trustee
in writing that the Master Servicer is diligently pursuing any remedies that may
exist in connection with the  representations  and warranties made regarding the
related  Home Equity Loan and either (A) the related  Home Equity Loan is not in
default with regard to payments due  thereunder  or (B)  delinquent  payments of
principal  and  interest  under the related Home Equity Loan and any premiums on
any applicable  primary hazard  insurance policy and any related escrow payments
in respect of such Home Equity Loan are being advanced on a current basis by the
Master  Servicer or a  Subservicer,  in either case without giving effect to any
Debt Service Reduction.

               Bankruptcy Loss Amount:  With respect to the Group I Loans, as of
any date of determination,  the Bankruptcy Loss Amount shall equal $128,595 less
the sum of any  Liquidation  Loss Amounts on the Group I Loans due to Bankruptcy
Losses up to such date of determination.  With respect to the Group II Loans, as
of any date of  determination,  the Bankruptcy  Loss Amount shall equal $118,179
less the sum of any  Liquidation  Loss  Amounts  on the  Group  II Loans  due to
Bankruptcy Losses up to such date of determination.

               Basic Documents: The Trust Agreement, the Indenture, the Purchase
Agreement, the Insurance Agreement, the Group I Policy, the Group II Policy, the
Servicing  Agreement,  the  Custodial  Agreement  and the  other  documents  and
certificates delivered in connection with any of the above.

               Basis Risk Shortfall: With respect to either the Class A-II Notes
or the Variable  Funding Notes,  on any Payment Date an amount by which interest
that would have  accrued on such Notes at the  applicable  Note Rate  during the
related  Interest  Period  (without  application  of the  Group II Net WAC Rate)
exceeds  interest  accrued  thereon  at the  Group II Net WAC Rate.  Basis  Risk
Shortfalls  will not be included in the  Interest  Distribution  Amount for such
Notes  for such  Payment  Date and  such  amount  will  accrue  interest  at the
applicable  Note Rate (as adjusted from time to time) and will be paid on future
Payment  Dates only to the extent funds are  available  therefor as set forth in
Section 3.05(a) of the Indenture.

               Beneficial  Owner:  With respect to any Term Note, the Person who
is the beneficial owner of such Note as reflected on the books of the Depository
or on the  books  of a  Person  maintaining  an  account  with  such  Depository
(directly  as a  Depository  Participant  or  indirectly  through  a  Depository
Participant, in accordance with the rules of such Depository).

                                       4
<PAGE>

               Billing Cycle: With respect to any Home Equity Loan and Due Date,
          the calendar month preceding such Due Date.

               Book-Entry Custodian: The custodian appointed pursuant to Section
4.06 of the Indenture.

               Book-Entry Notes:  Beneficial  interests in the Notes,  ownership
and  transfers of which shall be made through book entries by the  Depository as
described in Section 4.06 of the Indenture.

               Business  Day:  Any day other than (i) a Saturday  or a Sunday or
(ii) a day on which banking institutions in the States of New York,  California,
Minnesota, Illinois or Delaware are required or authorized by law to be closed.

               Calendar Quarter:  A Calendar Quarter shall consist of one of the
following  time periods in any given year:  January 1 through  March 31, April 1
through June 30, July 1 through September 30, and October 1 through December 31.

     Capped Funding Note:  Any Capped Funding Note issued in connection  with an
exchange pursuant to Section 4.01(c) or 4.01(d) of the Indenture.

               Cash Liquidation: As to any defaulted Home Equity Loan other than
a Home Equity Loan as to which an REO Acquisition  occurred,  a determination by
the Master  Servicer  that it has received all Insurance  Proceeds,  Liquidation
Proceeds  and  other  payments  or cash  recoveries  which the  Master  Servicer
reasonably and in good faith expects to be finally  recoverable  with respect to
such Home Equity Loan.

               Certificate Distribution Account: The account or accounts created
and maintained by the  Certificate  Paying Agent pursuant to Section  3.10(c) of
the Trust Agreement. The Certificate Paying Agent will make all distributions on
the Certificates from money on deposit in the Certificate Distribution Account.

               Certificate Distribution Amount: For any Payment Date, the amount
remaining in the Payment Account following distributions pursuant to clauses (i)
through (x) of Section  3.05(a)(I) of the Indenture and following  distributions
pursuant to clauses (i) through (x) of Section 3.05(a)(II) of the Indenture.

     Certificate of Trust: The Certificate of Trust filed for the Trust pursuant
to Section 3810(a) of the Statutory Trust Statute.

     Certificate  Paying  Agent:  The meaning  specified  in Section 3.10 of the
Trust Agreement.

                                       5
<PAGE>

               Certificate  Percentage  Interest:  With  respect to any  Payment
Date,  the  Certificate  Percentage  Interest  as  stated  on the  face  of such
Certificate,  which  percentage may be  recalculated  in accordance with Section
3.12 of the Trust Agreement.

               Certificate  Principal  Balance:  As of any  Payment  Date,  with
respect  to any Group II  Certificate,  an amount  equal to the then  applicable
Certificate  Percentage Interest of such Certificate  multiplied by the Group II
Overcollateralization  Amount.  As of any Payment Date with respect to any Class
SB-I  Certificate,  $319.57 as reduced by payments  deemed made on prior Payment
Dates in reduction of the Class  Principal  Balance of the Class SB-PO REMIC III
Regular  Interest  pursuant to the  provisions  of Section  5.02(g) of the Trust
Agreement. As of any Payment Date with respect to any Class R Certificate, $0.

               Certificate  Rate: With respect to the Class SB-I Certificates or
the REMIC III  Regular  Interest  SB-IO and any Payment  Date,  a rate per annum
equal to the percentage equivalent of a fraction,  the numerator of which is the
sum of the amounts  calculated  pursuant to clauses (i) through (iv) below,  and
the  denominator  of which is the  aggregate  principal  balance of the REMIC II
Regular  Interests  relating to Loan Group I. For  purposes of  calculating  the
Certificate Rate for the Class SB-I Certificates,  the numerator is equal to the
sum of the following components:

               (i) the REMIC II  Remittance  Rate for Class LT1 REMIC II Regular
               Interest  minus the Loan Group I SB-IO Marker Rate,  applied to a
               notional amount equal to the Class Principal Balance of the Class
               LT1 REMIC II Regular Interest;

               (ii) the  REMIC II  Remittance  Rate for the  Class  LT2 REMIC II
               Regular  Interest  minus  the  Loan  Group I SB-IO  Marker  Rate,
               applied to a notional amount equal to the Class Principal Balance
               of Class LT2 REMIC II Regular Interest; and

               (iii)  the  REMIC II  Remittance  Rate for the Class LT4 REMIC II
               Regular  Interest minus twice the Loan Group I SB-IO Marker Rate,
               applied to a notional amount equal to the Class Principal Balance
               of Class LT4 REMIC II Regular Interest.

     Certificate Register:  The register maintained by the Certificate Registrar
in which  the  Certificate  Registrar  shall  provide  for the  registration  of
Certificates and of transfers and exchanges of Certificates.

     Certificate Registrar: Initially, the Indenture Trustee, in its capacity as
Certificate Registrar.

               Certificateholder:  The  Person in whose  name a  Certificate  is
registered in the Certificate  Register except that, any Certificate  registered
in the name of the Issuer,  the Owner  Trustee or the  Indenture  Trustee or any
Affiliate  of any  of  them  shall  be  deemed  not to be  outstanding  and  the
registered  holder will not be  considered a  Certificateholder  or a holder for
purposes  of giving  any  request,  demand,  authorization,  direction,  notice,
consent or waiver under the Indenture or the Trust  Agreement  provided that, in
determining  whether  the  Indenture  Trustee  or the  Owner  Trustee  shall  be
protected in relying upon any such request,  demand,  authorization,  direction,
notice,  consent or waiver,  only Certificates that the Indenture Trustee or the

                                       6
<PAGE>

Owner  Trustee  knows  to  be  so  owned  shall  be so  disregarded.  Owners  of
Certificates  that have been pledged in good faith may be regarded as Holders if
the pledgee  establishes  to the  satisfaction  of the Indenture  Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.

     Certificates: The Group I Certificates and the Group II Certificates.

     Class:  Collectively,  all of the Notes or  Certificates  bearing  the same
designation.

               Class A-I-IO Notes: The Class A-I-IO Home Equity Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-IO  Notional  Amount:  With respect to the Class A-I-IO
Notes  and any  Payment  Date,  the  lesser of (a) the  Class  A-I-IO  Scheduled
Notional Balance for such Payment Date and (b) the aggregate  principal  balance
of the Group I Loans, as of the beginning of the related Collection Period.

               Class  A-I-IO  Scheduled  Notional  Balance:  With respect to any
Payment Date, the amount with respect to that Payment Date set forth on Schedule
I to the Indenture.

               Class A-I-1 Notes:  The Class A-I-1 Home Equity  Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-2 Notes:  The Class A-I-2 Home Equity  Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-3 Notes:  The Class A-I-3 Home Equity  Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-4 Notes:  The Class A-I-4 Home Equity  Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-5 Notes:  The Class A-I-5 Home Equity  Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-6 Notes:  The Class A-I-6 Home Equity  Loan-Backed Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class A-I-6 Lockout  Distribution  Amount:  For any Payment Date,
the product of (i) the Class A-I-6 Lockout  Percentage for such Payment Date and
(ii) the Class A-I-6 Pro Rata  Distribution  Amount for such Payment Date. In no
event  shall the Class  A-I-6  Lockout  Distribution  Amount for a Payment  Date
exceed the Principal  Collection  Distribution  Amount for the Class I Notes for
that Payment Date.

     Class A-I-6  Lockout  Percentage:  For each Payment  Date,  the  applicable
percentage set forth below:

                                       7
<PAGE>

 --------------------------------------------------- --------------------
 PAYMENT DATES                                       LOCKOUT PERCENTAGE

 PAYMENT DATES
 --------------------------------------------------- --------------------
 --------------------------------------------------- --------------------
 October 2002 through and including September 2005   0%
 --------------------------------------------------- --------------------
 --------------------------------------------------- --------------------
 October 2005 through and including September 2007   45%
 --------------------------------------------------- --------------------
 --------------------------------------------------- --------------------
 October 2007 through and including September 2008   80%
 --------------------------------------------------- --------------------
 --------------------------------------------------- --------------------
 October 2008 through and including September 2009   100%
 --------------------------------------------------- --------------------
 --------------------------------------------------- --------------------
 October 2009 and thereafter                         300%
 --------------------------------------------------- --------------------

               Class A-I-6 Pro Rata Distribution  Amount:  For any Payment Date,
an amount equal to the product of (x) a fraction,  the numerator of which is the
Security Balance of the Class A-I-6 Notes immediately prior to that Payment Date
and the  denominator of which is the aggregate  Security  Balance of the Class I
Notes, other than the Class A-I-IO Notes, immediately prior to that Payment Date
and (y) the Principal  Collection  Distribution Amount for the Class I Notes for
that Payment Date.

               Class A-II  Notes:  The Class A-II Home Equity  Loan-Backed  Term
Notes,  Series 2002-HS3,  in substantially  the form set forth in Exhibit A-1 to
the Indenture.

               Class I Notes:  The Class A-I-1 Notes, the Class A-I-2 Notes, the
Class A-I-3 Notes, the Class A-I-4 Notes, the Class A-I-5 Notes, the Class A-I-6
Notes and the Class A-I-IO Notes.

               Class LT Principal  Reduction Amounts:  For any Payment Date, the
amounts by which the principal  balances of the Class LT1,  Class LT2, Class LT3
and Class LT4 REMIC II Regular  Interests  respectively  will be reduced on such
Payment Date by the allocation of Liquidation  Loss Amounts and the distribution
of principal, determined as follows:

For purposes of the  succeeding  formulas the  following  symbols shall have the
meanings set forth below:

        Y1     = the Class  Principal  Balance of the Class LT1 REMIC II Regular
               Interest  after  the  allocation  of  REMIC II  Liquidation  Loss
               Amounts and making of distributions on the prior Payment Date.

        Y2     = the Class  Principal  Balance of the Class LT2 REMIC II Regular
               Interest  after  the  allocation  of  REMIC II  Liquidation  Loss
               Amounts and making of distributions on the prior Payment Date.

        Y3     = the Class  Principal  Balance of the Class LT3 REMIC II Regular
               Interest  after  the  allocation  of  REMIC II  Liquidation  Loss
               Amounts and making of distributions on the prior Payment Date.

        Y4     = the Class  Principal  Balance of the Class LT4 REMIC II Regular
               Interest  after  the  allocation  of  REMIC II  Liquidation  Loss
               Amounts and making of  distributions  on the prior  Payment  Date
               (note: Y4 = Y3 + Y6 ).

                                       8
<PAGE>

        (DELTA)Y1 = the Class LT1 Principal Reduction Amount.

        (DELTA)Y2 = the Class LT2 Principal Reduction Amount.

        (DELTA)Y3 = the Class LT3 Principal Reduction Amount.

        (DELTA)Y4 = the Class LT4 Principal Reduction Amount.

        P0     = the aggregate  principal  balance of the Class LT1,  Class LT2,
               Class  LT3  and  Class  LT4  REMIC  II  Regular  Interests  after
               distributions  and the allocation of Liquidation  Loss Amounts on
               the prior Payment Date.

            =  the aggregate principal balance of the Group I Loans after giving
               effect to principal  payments  distributed and  Liquidation  Loss
               Amounts allocated on the prior Payment Date.

        P1     = the aggregate  principal  balance of the Class LT1,  Class LT2,
               Class  LT3  and  Class  LT4  REMIC  II  Regular  Interests  after
               distributions  and the allocation of Liquidation  Loss Amounts to
               be made on such Payment Date.

            =  the aggregate principal balance of the Group I Loans after giving
               effect to principal  payments  distributed and  Liquidation  Loss
               Amounts allocated on such Payment Date.

        (DELTA)P = P0 - P1 = the  aggregate of the Class LT1,  Class LT2,  Class
               LT3 and Class LT4, Principal Reduction Amounts.

              =the sum of (I) the  aggregate  of the  Liquidation  Loss  Amounts
               attributable  to Loan Group I for such Payment Date and allocated
               to  principal  by the  definition  of REMIC II  Liquidation  Loss
               Amounts,  (II) the  portion  of  Principal  Collections  for such
               Payment  Date  attributable  to the  Group I Loans  and (III) the
               principal  portion of amounts  advanced  for such Payment Date in
               respect of the Group I Loans.

        R0     = the Group I Net WAC Rate  (stated  as a  monthly  rate) for the
               Group I Loans  after  giving  effect to amounts  distributed  and
               Liquidation Loss Amounts allocated on the prior Payment Date.

        R1     = the Group I Net WAC Rate  (stated  as a  monthly  rate) for the
               Group I Loans after  giving  effect to amounts to be  distributed
               and  Liquidation  Loss  Amounts to be  allocated  on such Payment
               Date.

          (alpha)= (Y2 + Y3)/P0.  The  initial  value of (alpha) on the  Closing
               Date for use on the first Payment Date shall be 0.0001.

        (gamma)0 = the interest  accruing on the Class I Notes in respect of the
               Interest  Period related to such Payment Date (without  reduction
               by the interest portion of Liquidation  Loss Amounts,  Prepayment
               Interest  Shortfalls or Relief Act  Shortfalls  allocated to such
               Notes).

                                       9
<PAGE>

        (gamma)1 = the interest  accruing on the Class I Notes in respect of the
               Interest  Period  related  to the next  succeeding  Payment  Date
               (without  reduction by the interest  portion of Liquidation  Loss
               Amounts,  Prepayment Interest Shortfalls or Relief Act Shortfalls
               allocated to such Notes).

Then, based on the foregoing definitions:

        (DELTA)Y1 =   (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4;

        (DELTA)Y2 =   ((alpha)/2){((gamma) 0R1 - (gamma)1R0)/R0R1};

        (DELTA)Y3 =   (alpha)(DELTA)P - (DELTA)Y2; and

        (DELTA)Y4 =   (DELTA)Y3

     if  both  (DELTA)Y2  and  (DELTA)Y3,  as so  determined,  are  non-negative
numbers. Otherwise:

        (1)    If (DELTA)Y2, as so determined, is negative, then

        (DELTA)Y2 = 0;

        (DELTA)Y3 = {2(alpha)(DELTA)PY2R1R0 - (alpha)2P0((gamma)0R1 -
(gamma)1R0)}/{2(alpha)Y2R1R0 - (alpha)((gamma)0R1 - (gamma)1R0)};

        (DELTA)Y4 = (DELTA)Y3; and

        (DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.

        (2)    If (DELTA)Y3, as so determined, is negative, then

        (DELTA)Y3 = 0;

        (DELTA)Y2 = {(alpha)2P0((gamma)0R1 - (gamma)1R0)} -
               2(alpha)(DELTA)PY2R1R0}/(2(alpha)Y2R1R0- 2(alpha)(DELTA)PR1R0 +
               (alpha)((gamma)0R1 - (gamma)1R0)};

        (DELTA)Y4 = (DELTA)Y3; and

        (DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.

               Class I-LT1 Principal  Distribution Amount: For any Payment Date,
the  excess,  if any,  of the Class I-LT1  Principal  Reduction  Amount for such
Payment Date over the principal  Liquidation Loss Amounts allocated to the Class
I-LT1 REMIC I Regular Interest on such Payment Date.

               Class I-LT2 Principal  Distribution Amount: For any Payment Date,
the  excess,  if any,  of the Class I-LT2  Principal  Reduction  Amount for such
Payment Date over the principal  Liquidation Loss Amounts allocated to the Class
I-LT2 REMIC I Regular Interest on such Payment Date.

                                       10
<PAGE>

               Class I-LT3 Principal  Distribution Amount: For any Payment Date,
the  excess,  if any,  of the Class I-LT3  Principal  Reduction  Amount for such
Payment Date over the principal  Liquidation Loss Amounts allocated to the Class
I-LT3 REMIC I Regular Interest on such Payment Date.

               Class I-LT4 Principal  Distribution Amount: For any Payment Date,
the  excess,  if any,  of the Class I-LT4  Principal  Reduction  Amount for such
Payment Date over the principal  Liquidation Loss Amounts allocated to the Class
I-LT4 REMIC I Regular Interest on such Payment Date.

               Class  I-LTB1  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO1.

               Class  I-LTB2  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO2.

               Class  I-LTB3  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO3.

               Class  I-LTB4  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO4.

               Class  I-LTB5  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO5.

               Class I-LTB6 REMIC I Regular Interest LTB6: A regular interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO6.

                                       11
<PAGE>

               Class  I-LTB7  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO7.

               Class  I-LTB8  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO8.

               Class  I-LTB9  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO9.

               Class I-LTB10  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO10.

               Class I-LTB11  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO11.

               Class I-LTB12  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO12.

               Class I-LTB13  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO13.

               Class I-LTB14  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO14.

                                       12
<PAGE>

               Class I LTB15  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO15.

               Class I-LTB16  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO16.

               Class I-LTB17  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO17.

               Class I-LTB18  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO18.

               Class I-LTB19  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO19.

               Class I-LTB20  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO20.

               Class I-LTB21  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO21.

               Class I-LTB22  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO22.

                                       13
<PAGE>

               Class I-LTB23  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO23.

               Class I-LTB24  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO24.

               Class I-LTB25  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO25.

               Class I-LTB26  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO26.

               Class I-LTB27  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO27.

               Class I-LTB28  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO28.

               Class I-LTB29  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO29.

               Class I-LTB30  REMIC I Regular  Interest:  A regular  interest in
REMIC I that is held as an asset  of REMIC  II,  that has an  initial  principal
balance  equal to the  related  Uncertificated  Principal  Balance,  that  bears
interest at the related REMIC I Remittance  Rate,  and that has such other terms
as are  described  herein.  Such  REMIC I Regular  Interest  shall be treated as
related to REMIC II Regular Interest LTA-IO30.

                                       14
<PAGE>

     Class II Notes: The Class A-II Notes and the Variable Funding Notes.

               Class  Principal  Balance:  For each  Class  of  REMIC I  Regular
Interests,  the Initial Balance thereof (as set forth in the definition of REMIC
I Regular  Interests)  as  reduced  on each  successive  Payment  Date  first by
Liquidation Loss Amounts allocated to the principal thereof by the definition of
REMIC I Liquidation Loss Amounts and second by principal  deemed  distributed in
respect  thereof on such Payment Date  pursuant to Section  5.01(e) of the Trust
Agreement.  For each Class of REMIC II Regular  Interests,  the Initial  Balance
thereof  (as set  forth in the  definition  of REMIC II  Regular  Interests)  as
reduced on each  successive  Payment  Date  first by  Liquidation  Loss  Amounts
allocated to the principal  thereof by the  definition  of REMIC II  Liquidation
Loss Amounts and second by principal  deemed  distributed in respect  thereof on
such Payment Date pursuant to Section  5.01(f) of the Trust  Agreement.  For the
REMIC III Regular  Interest SB-PO,  the Initial Balance thereof (as set forth in
the  definition of REMIC III Regular  Interests)  as reduced on each  successive
Payment  Date first by  Liquidation  Loss  Amounts  allocated  to the  principal
thereof by the  definition of REMIC III  Liquidation  Loss Amounts and second by
principal deemed distributed in respect thereof on such Payment Date pursuant to
Section  5.01(g) of the Trust  Agreement.  For each  Class of REMIC III  Regular
Interests,  the Class Principal Balance of the related Class of Notes or for the
Class SB-I Certificates,  the Certificate  Principal Balance.  For each Class of
Notes,  the  initial  Security  Balance  thereof as  reduced on each  successive
Payment Date by principal  distributed  in respect  thereof on such Payment Date
pursuant to Section 3.05 of the Indenture.

               Class R Certificates:  The Class R-I Certificates, the Class R-II
Certificates and the Class R-III Certificates, each as substantially in the form
set forth in Exhibit I to the Trust Agreement.

     Class SB  Certificates:  The Class SB-I  Certificates  and the Class  SB-II
Certificates.

               Class SB-I  Certificates:  The Class SB-I Home Equity Loan-Backed
Certificates,  Series  2002-HS3,  substantially  in the form of Exhibit A to the
Trust Agreement.

               Class SB-II Certificates: The Class SB-II Home Equity Loan-Backed
Certificates,  Series  2002-HS3,  substantially  in the form of Exhibit A to the
Trust Agreement.

               Class SB-I  Distribution  Amount: On any Payment Date, the sum of
the amounts  deemed  distributed  in respect of the REMIC III Regular  Interests
SB-IO and SB-PO  pursuant  to Sections  5.01(f)  and (g) of the Trust  Agreement
reduced by the amounts required to be paid pursuant to clauses (vii) through (x)
of Section 3.05(a)(I) of the Indenture.

               Closing Date:  September 27, 2002.

     Code:  The  Internal  Revenue Code of 1986,  as amended,  and the rules and
regulations promulgated thereunder.

     Collateral: The meaning specified in the Granting Clause of the Indenture.

                                       15
<PAGE>

     Collection  Period:  With  respect to any Home  Equity Loan and any Payment
Date, the calendar month preceding any such Payment Date.

               Combined  Loan-to-Value  Ratio: With respect to any HELOC and any
date, the percentage equivalent of a fraction, the numerator of which is the sum
of (i) the Credit  Limit and (ii) the  outstanding  principal  balance as of the
date of the  origination of such HELOC (or any subsequent  date as of which such
outstanding  principal  balance may be determined in connection with an increase
or decrease in the Credit Limit,  to reduce the amount of primary  insurance for
such HELOC or to approve a subordinate lien) and of all other mortgage loans, if
any,  that are  secured by liens on the  Mortgaged  Property  that are senior or
subordinate to the Mortgage and the  denominator of which is the Appraised Value
of the related  Mortgaged  Property.  With respect to any HEL and any date,  the
percentage  equivalent  of a fraction,  the numerator of which is the sum of (i)
the initial  principal  balance of such HEL and (ii) the  outstanding  principal
balance as of the date of  origination  of such HEL,  and of all other  mortgage
loans,  if any,  that are secured by liens on the  Mortgaged  Property  that are
senior  or  subordinate  to the  Mortgage  and the  denominator  of which is the
Appraised Value of the related Mortgaged Property.

               Commission:  The Securities and Exchange Commission.

               Corporate  Trust Office:  With respect to the Indenture  Trustee,
Certificate Registrar,  Certificate Paying Agent and Paying Agent, the principal
corporate  trust office of the Indenture  Trustee and Note Registrar at which at
any particular  time its corporate trust business shall be  administered,  which
office at the date of the  execution of this  instrument  is located at 450 West
33rd Street,  14th Floor,  New York,  New York 10001,  Attention:  Institutional
Trust  Services/Structured   Finance.  For  purposes  of  Section  4.15  of  the
Indenture,  however,  such term shall mean the Indenture  Trustee's agent, Chase
Manhattan Trust Company,  National  Association,  located at 1650 Market Street,
Suite  5210,  Philadelphia,  Pennsylvania  19103,  or such  other  office as the
Indenture  Trustee  shall  designate.  With  respect to the Owner  Trustee,  the
principal corporate trust office of the Owner Trustee at which at any particular
time its corporate  trust  business shall be  administered,  which office at the
date of the execution of this Trust Agreement is located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration.

               Credit Enhancer: FGIC, or any successor thereto.

               Credit Enhancer  Default:  If the Credit Enhancer fails to make a
payment  required  under the Group I Policy or the Group II Policy in accordance
with its terms.

               Credit Enhancer  Premium Rate: The rate equal to 0.14% per annum,
in the case of the Group I Policy, and 0.13% per annum, in the case of the Group
II Policy.

     Credit Limit: With respect to any HELOC, the maximum Loan Balance permitted
under the terms of the related Loan Agreement.

     Credit  Limit  Increase:  As  defined  in  Section  3.01  of the  Servicing
Agreement.

               Credit Score: With respect to any Home Equity Loan, the numerical
designation  obtained  from  credit  reports  provided  by any credit  reporting
organization  used to assess a  borrower's  credit-worthiness  and the  relative
degree of risk a borrower  represents  to a lender,  as determined in accordance
with the applicable underwriting criteria.

                                       16
<PAGE>

     Curtailment:  Any Principal  Prepayment  made by a Mortgagor which is not a
Principal Prepayment in full.

               Custodial Account: The account or accounts created and maintained
by the Master Servicer  pursuant to Section 3.02(b) of the Servicing  Agreement,
in which the Master  Servicer  shall  deposit or cause to be  deposited  certain
amounts in respect of the Home Equity Loans.

               Custodial Agreement: Any Custodial Agreement among the Custodian,
the  Indenture  Trustee,  the  Issuer and the Master  Servicer  relating  to the
custody of the Home Equity Loans and the Related Documents.

     Custodian:  Wells  Fargo  Bank  Minnesota,  N.A.,  and its  successors  and
assigns.

               Cut-off Date:  September 1, 2002.

               Cut-off Date Loan Balance:  With respect to any Home Equity Loan,
the unpaid principal balance thereof as of the close of business on the last day
of the Billing Cycle immediately prior to the Cut-off Date.

               Debt Service  Reduction:  With respect to any Home Equity Loan, a
reduction  in the  scheduled  payment  for such Home  Equity  Loan by a court of
competent  jurisdiction  in a proceeding  under the Bankruptcy Code that becomes
final and  non-appealable,  except  such a  reduction  constituting  a Deficient
Valuation or any reduction that results in a permanent forgiveness of principal.

     Default:  Any  occurrence  which is or with  notice or the lapse of time or
both would become an Event of Default.

               Deficient  Valuation:  With  respect to any Home Equity  Loan,  a
valuation by a court of competent  jurisdiction of the Mortgaged  Property in an
amount less than the then  outstanding  indebtedness  under the Home Equity Loan
and any senior lien on the Mortgaged Property, or any reduction in the amount of
principal to be paid in connection with any scheduled payment that constitutes a
permanent forgiveness of principal,  which valuation or reduction results from a
proceeding under the Bankruptcy Code that becomes final and non-appealable.

     Definitive Notes: The meaning specified in Section 4.06 of the Indenture.

     Deleted  Loan:  A Home  Equity  Loan  replaced  or to be  replaced  with an
Eligible Substitute Loan.

               Delinquent:  As used herein,  a Home Equity Loan is considered to
be: "30 to 59 days" or "30 or more days"  delinquent  when a payment  due on any
due date  remains  unpaid  as of the  close of  business  on the next  following
monthly due date. Since the determination as to whether a Home Equity Loan falls
into these  categories  is made as of the close of business on the last business

                                       17
<PAGE>

day of each month,  a Home  Equity  Loan with a payment due on  September 1 that
remained  unpaid as of the close of  business  on  September  30 would  still be
considered current as of September 30. If that payment remained unpaid as of the
close of business  on October 31, the Home Equity Loan would then be  considered
30-59  days  delinquent.  Delinquency  information  as of the  Cut-off  Date  is
determined  and  prepared as of the close of business on the last  business  day
immediately prior to the Cut-off Date.

     Depositor:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, or its successor in interest.

               Depository or Depository  Agency: The Depository Trust Company or
a  successor  appointed  by the  Indenture  Trustee  with  the  approval  of the
Depositor.  Any successor to the Depository shall be an organization  registered
as a  "clearing  agency"  pursuant to Section  17A of the  Exchange  Act and the
regulations of the Securities and Exchange Commission thereunder.

     Depository  Participant:  A  Person  for  whom,  from  time  to  time,  the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

               Determination  Date:  With respect to any Payment Date,  the 20th
day of the  month in which  such  Payment  Date  occurs  or if such day is not a
Business Day, the next succeeding Business Day.

               Disqualified   Organization:   Any  organization   defined  as  a
"disqualified  organization"  under Section  860E(e)(5) of the Code,  and if not
otherwise  included,  any of the following:  (i) the United States, any State or
political  subdivision  thereof,  any  possession of the United  States,  or any
agency or instrumentality of any of the foregoing (other than an instrumentality
which is a corporation if all of its  activities are subject to tax and,  except
for Freddie  Mac, a majority of its board of  directors  is not selected by such
governmental unit), (ii) a foreign government,  any international  organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives  described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated  business taxable income),  (iv)
rural electric and telephone  cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) any "electing large  partnership," as defined in Section 775(a) of
the Code and (vi) any other Person so designated by the Owner Trustee based upon
an Opinion of Counsel  that the  holding of an  Ownership  Interest in a Class R
Certificate  by such Person may cause the Trust  Estate or any Person  having an
Ownership  Interest  in any  Class of Notes or  Certificates  (other  than  such
Person) to incur a liability  for any  federal  tax imposed  under the Code that
would not otherwise be imposed but for the Transfer of an Ownership  Interest in
a Class R Certificate  to such Person.  The terms "United  States",  "State" and
"international  organization"  shall have the meanings set forth in Section 7701
of the Code or successor provisions.

               Dissolution  Draw:  Following  an  Event of  Liquidation,  on the
Business Day following the date on which the proceeds of the sale or liquidation
of the Trust Estate are to be distributed to the Securityholders, the amount, if
any,  by which  the  aggregate  amount  available  for  distribution  to Class I
Noteholders  or Class  A-II  Noteholders  is less  than the sum of (1) an amount

                                       18
<PAGE>

equal to all accrued and unpaid  interest on the Class I Notes or the Class A-II
Notes,  as  applicable,  through such Payment Date and (2) 100% of the aggregate
Security  Balance of the Class I Notes or the Class A-II Notes,  as  applicable,
outstanding immediately prior to such Payment Date.

     Dissolution Payment Date:  Following an Event of Liquidation,  the Business
Day following the date on which the proceeds of the sale of the Trust Estate are
paid to Securityholders.

     Draw: With respect to any HELOC, a borrowing by the related Mortgagor under
the related Loan Agreement.

               Draw Period: With respect to each HELOC, the period consisting of
either the first five,  ten or fifteen  years after the date of  origination  of
such HELOC, during which the related Mortgagor is permitted to make Draws.

               Due Date:  With respect to any Home Equity  Loan,  the day of the
month the Minimum  Monthly  Payment or fixed monthly payment is due as set forth
in the related Mortgage Note.

               Eligible  Account:  An account that is any of the following:  (i)
maintained  with a depository  institution  the short-term  debt  obligations of
which have been  rated by each  Rating  Agency in its  highest  rating  category
available,  or (ii) an account or accounts in a depository  institution in which
such accounts are fully insured to the limits established by the FDIC,  provided
that any deposits not so insured shall, to the extent  acceptable to each Rating
Agency,  as evidenced in writing,  be  maintained  such that (as evidenced by an
Opinion of Counsel  delivered to the Indenture  Trustee and each Rating  Agency)
the Indenture  Trustee have a claim with respect to the funds in such account or
a perfected  first  security  interest  against any  collateral  (which shall be
limited to Permitted Investments) securing such funds that is superior to claims
of any other  depositors or creditors of the depository  institution  with which
such  account  is  maintained,  or (iii) in the case of the  Custodial  Account,
either  (A) a trust  account  or  accounts  maintained  at the  corporate  trust
department of the Indenture Trustee or (B) an account or accounts  maintained at
the corporate trust  department of the Indenture  Trustee,  as long as its short
term debt  obligations are rated P-1 by Moody's and A-1 by Standard & Poor's (or
the  equivalent)  or  better  by each  Rating  Agency  and its  long  term  debt
obligations  are rated A by Standard & Poor's (or the  equivalent)  or better by
each Rating Agency, or (iv) in the case of the Custodial Account and the Payment
Account, a trust account or accounts  maintained in the corporate trust division
of the  Indenture  Trustee,  or (v)  an  account  or  accounts  of a  depository
institution  acceptable  to each Rating  Agency (as evidenced in writing by each
Rating  Agency  that use of any such  account  as the  Custodial  Account or the
Payment  Account will not reduce the rating assigned to any of the Securities by
such Rating Agency (if determined  without  regard to the related  Policy) below
the lower of the  then-current  rating or the rating assigned to such Securities
(if determined  without regard to the related  Policy) as of the Closing Date by
such Rating Agency).

               Eligible  Substitute  Loan: A Home Equity Loan substituted by the
Seller  for a Deleted  Loan which  must,  on the date of such  substitution,  as
confirmed in an Officer's  Certificate  delivered to the Indenture Trustee,  (i)

                                       19
<PAGE>

have an outstanding principal balance,  after deduction of the principal portion
of the  monthly  payment due in the month of  substitution  (or in the case of a
substitution  of more than one Home Equity Loan for a Deleted  Home Equity Loan,
an aggregate outstanding principal balance, after such deduction), not in excess
of the  outstanding  principal  balance of the  Deleted  Loan (the amount of any
shortfall to be deposited by the Seller in the Custodial Account in the month of
substitution);  (ii) comply with each  representation  and warranty set forth in
Section  3.1(b) of the  Purchase  Agreement  (other than clauses  (xiv),  (xvi),
(xvii), (xviii), (xxvi), (xxvii),  (xxviii) and (xxxi) thereof), if such Deleted
Loan is a Group I Loan, or Section 3.1(c) (other than clauses (xiii), (xxiv)(B),
(xxv)(B), (xxvi), (xxvii), (xxxiv) and (xxxvi) thereof), if such Deleted Loan is
a Group II Loan,  as of the date of  substitution;  (iii) have a Loan Rate,  Net
Loan Rate and Gross  Margin (if  applicable)  no lower than and not more than 1%
per  annum  higher  than the Loan  Rate,  Net Loan  Rate and  Gross  Margin  (if
applicable),  respectively,  of the Deleted Loan as of the date of substitution;
(iv) have a Combined  Loan-to-Value  Ratio at the time of substitution no higher
than that of the Deleted Loan at the time of substitution;  (v) have a remaining
term to stated  maturity not greater than (and not more than one year less than)
that of the Deleted Loan and (vi) not be 30 days or more delinquent.

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

               Event of Default:  With respect to the Indenture,  any one of the
following  events  (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment,  decree or order of any court or any order,  rule or regulation
of any administrative or governmental body):

               (i) a default in the payment of any interest on any Note when the
        same becomes due and  payable,  and such  default  shall  continue for a
        period of five days; or

               (ii)  a  default  in  the  payment  of  the  principal  of or any
        installment  of the  principal of any Note when the same becomes due and
        payable, and such default shall continue for a period of five days; or

               (iii) there occurs a default in the  observance or performance of
        any covenant or agreement  of the Issuer made in the  Indenture,  or any
        representation or warranty of the Issuer made in the Indenture or in any
        certificate or other writing delivered  pursuant hereto or in connection
        herewith  proving to have been  incorrect in any material  respect as of
        the time when the same shall have been made which has a material adverse
        effect on  Securityholders,  and such default  shall  continue or not be
        cured,  or the  circumstance  or  condition  in  respect  of which  such
        representation  or warranty was incorrect shall not have been eliminated
        or otherwise  cured, for a period of 30 days after there shall have been
        given,  by registered or certified  mail, to the Issuer by the Indenture
        Trustee or to the Issuer and the Indenture  Trustee by the Holders of at
        least 25% of the outstanding Security Balance of the Notes or the Credit
        Enhancer,   a  written  notice  specifying  such  default  or  incorrect
        representation  or warranty and  requiring it to be remedied and stating
        that such notice is a notice of default hereunder; or

               (iv) there occurs the filing of a decree or order for relief by a
        court  having  jurisdiction  in the premises in respect of the Issuer or
        any  substantial  part of the Trust Estate in an involuntary  case under
        any applicable federal or state bankruptcy,  insolvency or other similar

                                       20
<PAGE>

        law now or hereafter in effect,  or  appointing a receiver,  liquidator,
        assignee,  custodian,  trustee,  sequestrator or similar official of the
        Issuer or for any substantial part of the Trust Estate,  or ordering the
        winding-up or  liquidation of the Issuer's  affairs,  and such decree or
        order shall remain unstayed and in effect for a period of 60 consecutive
        days; or

               (v) there  occurs the  commencement  by the Issuer of a voluntary
        case under any  applicable  federal or state  bankruptcy,  insolvency or
        other  similar  law now or  hereafter  in effect,  or the consent by the
        Issuer to the entry of an order for relief in an involuntary  case under
        any such law, or the consent by the Issuer to the  appointment or taking
        possession  by a receiver,  liquidator,  assignee,  custodian,  trustee,
        sequestrator  or similar  official of the Issuer or for any  substantial
        part of the assets of the Trust  Estate,  or the making by the Issuer of
        any general  assignment for the benefit of creditors,  or the failure by
        the Issuer  generally  to pay its debts as such debts become due, or the
        taking  of  any  action  by  the  Issuer  in  furtherance  of any of the
        foregoing.

               Event of  Liquidation:  Following  the  occurrence of an Event of
Default under the Indenture,  the  determination  by the Indenture  Trustee,  as
evidenced by a written notice  provided to the Owner Trustee,  the Depositor and
the Credit Enhancer, that all conditions precedent to the sale or liquidation of
the Trust Estate pursuant to Section 5.04 of the Indenture have been satisfied.

     Event of Servicer Termination:  With respect to the Servicing Agreement,  a
Servicing Default as defined in Section 7.01 of the Servicing Agreement.

               Excess  Loss  Amount:  With  respect to the Group I Loans and any
Payment Date,  the sum of (i) the excess,  if any, of the aggregate  Liquidation
Loss Amounts on the Group I Loans  (other than as described in clauses  (ii)-(v)
hereof) for the related  Collection Period and all preceding  Collection Periods
(other than as  described in clauses  (ii)-(v)  hereof) over the amount equal to
11.25% of the Cut-off Date Loan  Balance of the Group I Loans,  (ii) any Special
Hazard  Losses on the Group I Loans in excess of the Special  Hazard Amount with
respect  to the Group I Loans,  (iii)  any Fraud  Losses on the Group I Loans in
excess of the Fraud Loss  Amount  with  respect  to the Group I Loans,  (iv) any
Bankruptcy  Losses on the Group I Loans in excess of the Bankruptcy  Loss Amount
with  respect  to the  Group I Loans,  and (v) any  losses  on the Group I Loans
caused by or resulting from an Extraordinary Event.

               With respect to the Group II Loans and any Payment Date,  the sum
of (i) the excess,  if any, of the  aggregate  Liquidation  Loss  Amounts on the
Group II Loans  (other than as  described  in clauses  (ii)-(v)  hereof) for the
related  Collection Period and all preceding  Collection  Periods (other than as
described  in clauses  (ii)-(v)  hereof)  over the amount equal to 11.25% of the
Cut-off Date Loan Balance of the Group I Loans,  (ii) any Special  Hazard Losses
on the Group II Loans in excess of the Special Hazard Amount with respect to the
Group II Loans,  (iii)  any Fraud  Losses on the Group II Loans in excess of the
Fraud Loss Amount with respect to the Group II Loans, (iv) any Bankruptcy Losses
on the Group II Loans in excess of the  Bankruptcy  Loss Amount with  respect to
the  Group II  Loans,  and (v) any  losses  on the  Group II Loans  caused by or
resulting from an Extraordinary Event.

                                       21
<PAGE>

     Exchange  Act: The  Securities  Exchange Act of 1934,  as amended,  and the
rules and regulations promulgated thereunder.

               Excluded Amount:  For any Payment Date on or after the occurrence
of an Amortization  Event, the portion of the balance with respect to each HELOC
attributable to all Draws not  transferred to the Trust,  and the portion of the
Principal  Collections  (other than Net Liquidation  Proceeds to the extent that
the Excluded  Amount of Liquidation  Proceeds is not included in Net Liquidation
Proceeds) and Interest  Collections thereon for each Collection Period allocated
to such  Excluded  Amount  based on a pro rata  allocation  between  the related
Excluded  Amount and the Loan Balance in  proportion to the  respective  amounts
outstanding  as of the  end of the  calendar  month  preceding  such  Collection
Period.

     Expenses: The meaning specified in Section 7.02 of the Trust Agreement.

               Extraordinary Event: Any of the following conditions with respect
to a  Mortgaged  Property  or, in the case of clause  (a), a Home  Equity  Loan,
causing or resulting in a loss which causes the  liquidation of the related Home
Equity Loan:

               (a)  losses  that  are of a type  that  would be  covered  by the
        fidelity bond and the errors and omissions  insurance policy required to
        be maintained  pursuant to Section 3.13 of the  Servicing  Agreement but
        are in excess of the coverage maintained thereunder;

               (b)  nuclear   reaction  or  nuclear   radiation  or  radioactive
        contamination,  all whether controlled or uncontrolled, and whether such
        loss be direct  or  indirect,  proximate  or remote or be in whole or in
        part caused by,  contributed  to or aggravated by a peril covered by the
        definition of the term "Special Hazard Loss";

               (c) hostile or warlike action in time of peace or war,  including
        action in hindering, combating or defending against an actual, impending
        or expected attack:

                    1.  by any  government  or  sovereign  power,  de jure or de
               facto, or by any authority  maintaining or using military,  naval
               or air forces; or

                    2. by military, naval or air forces; or

                    3. by an agent of any such government,  power,  authority or
               forces;

               (d) any weapon of war  employing  atomic  fission or  radioactive
          force whether in time of peace or war; or

               (e) insurrection, rebellion, revolution, civil war, usurped power
        or action taken by  governmental  authority in  hindering,  combating or
        defending  against  such an  occurrence,  seizure or  destruction  under
        quarantine  or  customs  regulations,   confiscation  by  order  of  any
        government  or  public  authority;  or risks of  contraband  or  illegal
        transportation or trade.

     Fannie Mae: Fannie Mae, formerly the Federal National Mortgage Association,
or any successor thereto.

                                       22
<PAGE>

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

     FGIC: Financial Guaranty Insurance Company.

               Final Scheduled  Payment Date: With respect to the Class I Notes,
the  Payment  Date in August  2032 and with  respect to the Class II Notes,  the
Payment Date in August 2032.

               Foreclosure  Profit:  With  respect to a  Liquidated  Home Equity
Loan, the amount, if any, by which (i) the aggregate of Liquidation Proceeds net
of Liquidation  Expenses exceeds (ii) the related Loan Balance (plus accrued and
unpaid  interest  thereon at the applicable Loan Rate from the date interest was
last paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated  Home  Equity  Loan  immediately  prior to the final  recovery of its
Liquidation Proceeds.

               Fraud Loss Amount:  With respect to the Group I Loans,  as of any
date of determination  after the Cut-off Date, the Fraud Loss Amount shall equal
(X) prior to the first  anniversary of the Cut-off Date an amount equal to 5.00%
of the  aggregate  principal  balance  of the  Group I Loans  as of the  date of
determination minus the aggregate of any Liquidation Loss Amounts on the Group I
Loans due to Fraud Losses up to such date of  determination;  (Y) from the first
to the second  anniversary of the Cut-off Date, an amount equal to the lesser of
(1) 3.00% of the aggregate principal balance of the Group I Loans as of the date
of  determination  and (2) the Fraud Loss Amount as of the first  anniversary of
the Cut-off  Date minus the  aggregate  of any  Liquidation  Loss Amounts on the
Group I Loans due to Fraud  Losses  since the first  anniversary  of the Cut-off
Date up to such  date of  determination;  and (Z) from the  second  to the fifth
anniversary  of the Cut-off  Date, an amount equal to the lesser of (1) 2.00% of
the of the  aggregate  principal  balance of the Group I Loans as of the date of
determination and (2) the Fraud Loss Amount as of the second  anniversary of the
Cut-off Date minus the aggregate of any Liquidation  Loss Amounts on the Group I
Loans due to Fraud Losses since the second anniversary of the Cut-off Date up to
such date of determination.

               With  respect  to  the  Group  II  Loans,   as  of  any  date  of
determination  after the Cut-off  Date,  the Fraud Loss  Amount  shall equal (X)
prior to the first  anniversary  of the Cut-off Date an amount equal to 5.00% of
the  aggregate  Credit Limits of the Group II Loans as of the Cut-off Date minus
the aggregate of any Liquidation Loss Amounts on the Group II Loans due to Fraud
Losses  up to such  date of  determination;  (Y)  from the  first to the  second
anniversary  of the Cut-off  Date,  an amount equal to (1) the lesser of (a) the
Fraud Loss  Amount  with  respect to the Group II Loans,  as of the most  recent
anniversary  of the Cut-off  Date and (b) 3.00% of the  aggregate  of the Credit
Limits of the Group II Loans as of the most  recent  anniversary  of the Cut-off
Date minus (2) the  aggregate  of any  Liquidation  Loss Amounts on the Group II
Loans due to Fraud Losses since the most recent  anniversary of the Cut-off Date
up to  such  date of  determination;  and  (Z)  from  the  second  to the  fifth
anniversary  of the Cut-off  Date,  an amount equal to (1) the lesser of (a) the
Fraud Loss Amount as of the most recent  anniversary of the Cut-off Date and (b)
2.00% of the aggregate of the Credit Limits of the Group II Loans as of the most
recent  anniversary  of  the  Cut-off  Date  minus  (2)  the  aggregate  of  any
Liquidation  Loss  Amounts on the Group II Loans due to Fraud  Losses  since the
most recent anniversary of the Cut-off Date up to such date of determination. On
and after the fifth  anniversary  of the Cut-off  Date with respect to both Loan
Groups, the Fraud Loss Amount shall be zero.

                                       23
<PAGE>

     Fraud  Losses:  Any  Liquidation  Loss Amount on any Home Equity Loan as to
which there was fraud in the origination of such Home Equity Loan.

     Freddie  Mac:  Freddie  Mac,   formerly  the  Federal  Home  Loan  Mortgage
Corporation, or any successor thereto.

               Grant: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer,  create, and grant a lien upon and a security interest
in and right of set-off against,  deposit,  set over and confirm pursuant to the
Indenture.  A Grant of the  Collateral  or of any other  agreement or instrument
shall include all rights,  powers and options (but none of the  obligations)  of
the granting party  thereunder,  including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such  collateral or other  agreement or  instrument  and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other  agreements,  to exercise  all rights and  options,  to
bring proceedings in the name of the granting party or otherwise,  and generally
to do and receive  anything that the granting  party is or may be entitled to do
or receive thereunder or with respect thereto.

     Gross Margin:  With respect to any HELOC,  the  percentage set forth as the
"Margin" for such HELOC on the Home Equity Loan Schedule.

     Group  I  Certificates:   The  Class  SB-I  Certificates,   the  Class  R-I
Certificates, Class R-II Certificates and the Class R-III Certificates.

               Group I Credit  Enhancement Draw Amount: An amount, if any, equal
to (1) on any Payment Date other than the Dissolution  Payment Date or the Final
Scheduled Payment Date for the Class I Notes, the sum of (a) the amount by which
accrued  interest  on the Class I Notes,  at the  applicable  Note Rates on such
Payment Date exceeds the amount on deposit in the Payment Account  available for
interest  payments on the Class I Notes on such Payment Date  (exclusive  of any
Prepayment Interest Shortfalls and any Relief Act Shortfalls), (b) the amount by
which any Liquidation Loss Distribution Amount with respect to the Class I Notes
exceeds  the sum of (x) the amount on deposit in the Payment  Account  available
for payments with respect to Liquidation Loss Distribution  Amounts on the Class
I Notes on such  Payment Date and (y) the Group I  Overcollateralization  Amount
for such  Payment  Date  (calculated  without  giving  effect to any  reductions
relating to such Liquidation Loss Distribution  Amounts) and (c) any Excess Loss
Amount with respect to the Class I Notes;  (2) with  respect to the  Dissolution
Payment Date, the amount of the  Dissolution  Draw relating to the Class I Notes
payable to the Holders of the Class I Notes  following the sale,  liquidation or
other disposition of the assets of the Owner Trust Estate in connection with the
liquidation  of the Trust Estate as permitted  under the Indenture  following an
Event of Default  thereunder and (3) with respect to the Final Scheduled Payment
Date for the Class I Notes,  the amount by which the  Security  Balances  on the
Class I Notes,  and any accrued and unpaid  interest  thereon  (exclusive of any
Prepayment  Interest Shortfalls and any Relief Act Shortfalls) to the extent not
previously  paid,  exceeds the  payments  otherwise  available to be made to the
Holders thereof on the Final Scheduled Payment Date.

                                       24
<PAGE>

     Group I Excess  Spread:  With  respect to any Payment Date and Loan Group I
and without taking into account any Group I Credit  Enhancement  Draw Amount for
such Payment  Date,  the P&I  Collections  on the Group I Loans for such Payment
Date remaining  after  application of clauses (i), (ii),  (iv), (v) and (vii) of
Section 3.05(a)(I) of the Indenture.

               Group I Excess  Spread  Percentage:  With  respect to any Payment
Date and Loan Group I, the percentage equivalent of a fraction (A) the numerator
of which is the product of (1) the Group I Excess  Spread for such  Payment Date
and (2) 12, and (B) the denominator of which is the Pool Balance of Loan Group I
as of the beginning of the related Collection Period, expressed as a percentage.

               Group I Loans:  The HELs in Loan Group I.

               Group I Net WAC Rate:  With  respect to any Payment  Date,  a per
annum  rate equal to the  weighted  average of the Net Loan Rates of the Group I
Loans applicable for the Collection  Period for such Payment Date occurs,  minus
(2) the Note Rate for the Class A-I-IO Notes for such Payment Date multiplied by
a fraction,  the  numerator  of which is (x) the Class  A-I-IO  Notional  Amount
immediately  prior to such Payment Date, and the denominator of which is (y) the
aggregate  principal  balance  of the  Group I Loans as of the  first day of the
month  preceding the month in which such Payment Date occurs,  but in all events
such per annum rate shall not be less than 0.00% per annum.  With respect to the
Class A-I-1 Notes,  the Group I Net WAC Rate is further  adjusted by multiplying
the Group I Net WAC Rate by a  fraction,  the  numerator  of which is 30 and the
denominator  of which  is the  actual  number  of days in the  related  Interest
Period.

               Group I Overcollateralization Amount: With respect to the Class I
Notes, and any Payment Date, the amount by which the Pool Balance of the Group I
Loans after applying payments received in the related  Collection Period exceeds
the aggregate  Security Balance of the Class I Notes on such Payment Date (after
application of Principal  Collections  for such date and any payments in respect
to   Liquidation   Loss   Amounts).   On  each   Payment   Date,   the  Group  I
Overcollateralization Amount available to cover Liquidation Loss Amounts on such
Payment  Date,  if any,  shall be deemed to be reduced by an amount equal to any
Liquidation  Loss Amounts  (other than any Excess Loss Amounts) for such Payment
Date on the Group I Loans,  except to the  extent  that  such  Liquidation  Loss
Amounts  were covered on such  Payment  Date by P&I  Collections  on the Group I
Loans pursuant to Section 3.05(a)(I) of the Indenture, or P&I Collections on the
Group II Loans pursuant to Section 3.05(a)(II) of the Indenture.

               Group I Overcollateralization  Floor: An amount equal to 0.50% of
the aggregate  principal balance of the Group I Loans as of the Cut-off Date, or
$1,125,002.

               Group I  Overcollateralization  Increase Amount:  With respect to
the Class I Notes and (a) the first two Payment  Dates,  $0, and (b) any Payment
Date after the first two Payment Dates, an amount equal to the lesser of (i) P&I
Collections  on the Group I Loans  remaining  after  application  of clauses (i)
through (v) of Section  3.05(a)(I) of the Indenture and (ii) the excess, if any,
of (x) the Group I Required  Overcollateralization  Amount for that Payment Date
over (y) the Group I Overcollateralization Amount for that Payment Date.

                                       25
<PAGE>

               Group I Policy: The Financial  Guarantee  Insurance Policy number
02030023,  dated as of  September  27,  2002,  issued  by FGIC to the  Indenture
Trustee, with respect to the Class I Notes.

               Group I Required  Overcollateralization  Amount:  With respect to
any Payment Date prior to the Group I Stepdown  Date,  1.50% of the Pool Balance
of the Group I Loans as of the Cut-off Date. With respect to any Payment Date on
or after the Group I  Stepdown  Date,  the  lesser  of (a) the  initial  Group I
Required  Overcollateralization Amount and (b) 3.00% of the Pool Balance for the
Group  I  Loans  after   application  of  Interest   Collections  and  Principal
Collections received during the related Collection Period, but not less than the
Group I Overcollateralization  Floor; provided, however, that if, on any Payment
Date after the Group I Stepdown  Date,  the Group I Rolling  Three Month  Excess
Spread Percentage is less than 2.00%, the Group I Required Overcollateralization
Amount shall remain fixed at its then current  level,  until the Payment Date on
which the Group I Rolling Three Month Excess Spread  Percentage  again equals or
exceeds 2.00%.

               The Group I Required  Overcollateralization Amount may be reduced
with the prior written  consent of the Credit  Enhancer and notice to the Rating
Agencies, but without the consent of the Holders of the Notes.

               Group I  Rolling  Three  Month  Excess  Spread  Percentage:  With
respect to any Payment Date and the Group I Loans, the arithmetic average of the
Group I Excess Spread Percentages  determined for such Payment Date and for each
of the two preceding  Payment  Dates.  For purposes of  calculating  the Group I
Excess Spread  Percentage  for the current  Payment  Date,  the Group I Required
Overcollateralization  Amount shall be determined  without regard to the proviso
set forth in such definition.

               Group I Stepdown Date: The later of (a) the Payment Date in April
2005 and (b) the  Payment  Date on which the Pool  Balance  of the Group I Loans
after applying payments  received in the related  Collection Period is less than
or equal to 50% of the Pool Balance of the Group I Loans as of the Cut-off Date.

               Group I Step-up  Date:  With  respect  to the Group I Loans,  the
Payment  Date on which the  aggregate  Loan  Balance of the Group I Loans (after
application of payments received during the related  Collection  Period) is less
than 10% of the initial Pool Balance of the Group I Loans.

               Group II Certificates: The Class SB-II Certificates.

               Group II Credit Enhancement Draw Amount: An amount, if any, equal
to (1) on any Payment Date other than the Insured Undercollateralization Payment
Date, the Dissolution  Payment Date or the Final Scheduled  Payment Date for the
Class II Notes, the sum of (a) the amount by which accrued interest on the Class
II Notes,  at the applicable  Note Rates on such Payment Date exceeds the amount
on deposit in the Payment Account  available for interest  payments on the Class
II Notes on such Payment Date  (exclusive of any Basis Risk  Shortfalls  and any
Relief  Act   Shortfalls),   (b)  the  amount  by  which  any  Liquidation  Loss

                                       26
<PAGE>

Distribution  Amount with  respect to the Class II Notes  exceeds the sum of (x)
the amount on deposit in the Payment Account available for payments with respect
to Liquidation Loss  Distribution  Amounts on the Class II Notes on such Payment
Date and (y) the Group II  Overcollateralization  Amount for such  Payment  Date
(calculated without giving effect to any reductions relating to such Liquidation
Loss  Distribution  Amounts)  and (c) any Excess Loss Amount with respect to the
Class II Notes; (2) with respect to the Insured  Undercollateralization  Payment
Date,  the amount,  if any, by which the Security  Balance of the Class II Notes
exceeds  the  Pool  Balance  of the  Group II  Loans,  as of the last day of the
related  Collection  Period (after giving effect to the application of principal
payments on such Insured  Undercollateralization Payment Date); (3) with respect
to the Dissolution  Payment Date, the amount of the Dissolution Draw relating to
the Class II Notes  payable to the Holders of the Class II Notes  following  the
sale,  liquidation or other  disposition of the assets of the Owner Trust Estate
in connection  with the  liquidation of the Trust Estate as permitted  under the
Indenture  following an Event of Default  thereunder and (4) with respect to the
Final  Scheduled  Payment  Date for the Class II Notes,  the amount by which the
Security  Balances on the Class II Notes,  and any  accrued and unpaid  interest
thereon  (exclusive of any Basis Risk  Shortfalls and any Relief Act Shortfalls)
to the extent not previously paid, exceeds the payments  otherwise  available to
be made to the Holders thereof on the Final Scheduled Payment Date.

     Group II Excess Spread:  With respect to any Payment Date and Loan Group II
and without taking into account any Group II Credit  Enhancement Draw Amount for
such Payment Date,  the P&I  Collections  on the Group II Loans for such Payment
Date remaining  after  application of clauses (i), (ii),  (iv), (v) and (vii) of
Section 3.05(a)(II) of the Indenture.

               Group II Excess  Spread  Percentage:  With respect to any Payment
Date  and Loan  Group  II,  the  percentage  equivalent  of a  fraction  (A) the
numerator  of which is the  product  of (1) the Group II Excess  Spread for such
Payment Date and (2) 12, and (B) the denominator of which is the Pool Balance of
Loan Group II as of the beginning of the related Collection Period, expressed as
a percentage.

               Group II Loans:  The HELOCs in Loan Group II.

               Group II Net WAC Rate:  With  respect to any Payment  Date, a per
annum rate equal to the  weighted  average of the Net Loan Rates of the Group II
Loans  as of the  beginning  of  the  related  Collection  Period,  adjusted  by
multiplying  the Group II Net WAC Rate by a fraction,  the numerator of which is
30 and the  denominator  of which is the  actual  number of days in the  related
Interest Period.

               Group II Overcollateralization  Amount: With respect to the Class
II Notes,  and any  Payment  Date,  the amount by which the Pool  Balance of the
Group II Loans after applying payments received in the related Collection Period
exceeds the  aggregate  Security  Balance of the Class II Notes on such  Payment
Date (in each case, after application of Net Principal  Collections or Principal
Collections,  as the case may be, for such date and  acquisition by the Trust of
Additional  Balances  on such  Payment  Date  and any  payments  in  respect  of
Liquidation   Loss   Amounts).    On   each   Payment   Date,   the   Group   II
Overcollateralization Amount available to cover Liquidation Loss Amounts on such

                                       27
<PAGE>

Payment  Date,  if any,  shall be deemed to be reduced by an amount equal to any
Liquidation  Loss Amounts  (other than any Excess Loss Amounts) for such Payment
Date on the Group II Loans,  except to the  extent  that such  Liquidation  Loss
Amounts were covered on such  Payment  Date by P&I  Collections  on the Group II
Loans pursuant to Section  3.05(a)(II) of the Indenture,  or P&I  Collections on
the Group I Loans pursuant to Section 3.05(a)(I) of the Indenture.

               Group II Overcollateralization Floor: An amount equal to 0.50% of
the aggregate  principal  balances of the Group II Loans as of the Cut-off Date,
or $1,025,000.

               Group II  Overcollateralization  Increase Amount: With respect to
any Payment  Date and the Class II Notes,  an amount  equal to the lesser of (i)
P&I Collections on the Group II Loans remaining after application of clauses (i)
through (v) of Section 3.05(a)(II) of the Indenture and (ii) the excess, if any,
of (x) the Group II Required  Overcollateralization Amount for that Payment Date
over (y) the Group II Overcollateralization Amount for that Payment Date.

               Group II Policy: The Financial  Guarantee Insurance Policy number
02030024,  dated as of  September  27,  2002,  issued  by FGIC to the  Indenture
Trustee, with respect to the Class II Notes.

               Group II Required  Overcollateralization  Amount: With respect to
any Payment Date prior to the Group II Stepdown Date,  1.00% of the Pool Balance
of the Group II Loans as of the Cut-off  Date.  With respect to any Payment Date
on or after the Group II Stepdown  Date,  the lesser of (a) the initial Group II
Required  Overcollateralization Amount and (b) 2.00% of the Pool Balance for the
Group  II  Loans  after  application  of  Interest   Collections  and  Principal
Collections  received during the related Collection Period but not less than the
Group II Overcollateralization  Floor; provided, however, that if on any Payment
Date after the Group II Stepdown  Date,  the Group II Rolling Three Month Excess
Spread    Percentage    is   less   than   2.25%,    the   Group   II   Required
Overcollateralization Amount shall remain fixed at its then current level, until
the  Payment  Date on which the  Group II  Rolling  Three  Month  Excess  Spread
Percentage again equals or exceeds 2.25%.

               The Group II Required Overcollateralization Amount may be reduced
with the prior written  consent of the Credit  Enhancer and notice to the Rating
Agencies, but without the consent of the Holders of the Notes.

               Group II Rolling  Three  Month  Excess  Spread  Percentage:  With
respect to any Payment Date and the Group II Loans,  the  arithmetic  average of
the Group II Excess Spread Percentages  determined for such Payment Date and for
each of the two preceding  Payment Dates.  For purposes of calculating the Group
II Excess Spread  Percentage for the current Payment Date, the Group II Required
Overcollateralization  Amount shall be determined  without regard to the proviso
set forth in such definition.

               Group II  Stepdown  Date:  The later of (a) the  Payment  Date in
September  2004 and (b) the Payment  Date on which the Pool Balance of the Group
II Loans after applying  payments  received in the related  Collection Period is
less than 50% of the Pool Balance of the Group II Loans as of the Cut-off Date.

                                       28
<PAGE>

     HEL: Each closed-end,  fixed rate home equity mortgage loan,  together with
the Related Documents, included in the Trust Estate.

               HELOC: Each adjustable-rate, home equity revolving line of credit
loan,  including  Additional  Balances,   if  any,  together  with  the  Related
Documents, included in the Trust Estate.

               Holder:  Any of the Noteholders or Certificateholders.

               Home Equity Loans:  Collectively, the HELs and HELOCs.

               Home Equity Loan  Schedule:  The initial  schedule of Home Equity
Loans as of the Cut-off Date set forth in Exhibit A of the Servicing  Agreement,
which  schedule sets forth as to each Home Equity Loan (as  applicable)  (i) the
Cut-off Date Loan Balance  ("Principal  Bal"), (ii) the Credit Limit,  (iii) the
Gross Margin ("Margin"), (iv) the Maximum Rate ("Ceiling"), if any, (v) the lien
position of the related  Mortgaged  Property,  (vi) the Depositor's  Home Equity
Loan identifying  number,  (vii) the Subservicer's  Home Equity Loan identifying
number  (viii) the city,  state and zip code of the Mortgaged  Property,  (ix) a
code indicating whether the Mortgaged  Property is owner-occupied,  (x) the type
of residential dwelling  constituting the Mortgaged Property,  (xi) the original
number of months to maturity,  (xii) the remaining  number of months to maturity
from the  Cut-off  Date,  (xiii) as to any  first  lien Home  Equity  Loan,  the
Loan-to-Value  Ratio at origination  and as to any second lien Home Equity Loan,
the Combined  Loan-to-Value Ratio at origination of such second lien Home Equity
Loan,  (xiv) the Loan Rate in effect as of the  Cut-off  Date,  (xv) the  stated
maturity date, (xvi) the prior encumbrance principal balance (denoted as "Senior
Lien" on the Home  Equity  Loan  Schedule),  if any,  (xvii) the  Credit  Score,
(xviii)  the  Mortgagor's  debt-to-income  ratio,  (xix) a code  indicating  the
product type, (xx) a code indicating the purpose of the Home Equity Loan,  (xxi)
the  Mortgage  Note date,  (xxii) the teaser  expiration  date,  and (xxiii) the
Appraised Value.

     Indemnified  Party:  The  meaning  specified  in Section  7.02 of the Trust
Agreement.

     Indenture: The indenture, dated as of the Closing Date, between the Issuer,
as debtor, and the Indenture Trustee, as indenture trustee.

     Indenture  Trustee:  JPMorgan Chase Bank, and its successors and assigns or
any  successor  indenture  trustee  appointed  pursuant  to  the  terms  of  the
Indenture.

               Independent:  When used with respect to any specified Person, the
Person (i) is in fact independent of the Issuer, any other obligor on the Notes,
the Seller,  the Depositor  and any  Affiliate of any of the foregoing  Persons,
(ii)  does not have any  direct  financial  interest  or any  material  indirect
financial  interest  in the Issuer,  any such other  obligor,  the  Seller,  the
Depositor  or any  Affiliate  of any of the  foregoing  Persons and (iii) is not
connected with the Issuer, any such other obligor,  the Seller, the Depositor or
any Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

                                       29
<PAGE>

               Independent Certificate: A certificate or opinion to be delivered
to the  Indenture  Trustee under the  circumstances  described in, and otherwise
complying  with, the applicable  requirements of Section 10.01 of the Indenture,
made by an  Independent  appraiser or other expert  appointed by an Issuer Order
and approved by the Indenture  Trustee in the exercise of reasonable  care,  and
such opinion or certificate  shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

     Index:  With respect to any HELOC, the prime rate from time to time for the
adjustment of the Loan Rate set forth as such on the related Loan Agreement.

               Initial Certificates:  The Home Equity Loan-Backed  Certificates,
Series  2002-HS3,   issued  on  the  Closing  Date,  each  evidencing  undivided
beneficial interests in the Issuer and executed by the Owner Trustee.

               Initial Class A-I-1 Security Balance:  $83,000,000.
               ------------------------------------

               Initial Class A-I-2 Security Balance:  $35,000,000.
               ------------------------------------

               Initial Class A-I-3 Security Balance:  $37,000,000.
               ------------------------------------

               Initial Class A-I-4 Security Balance:  $37,000,000.
               ------------------------------------

               Initial Class A-I-5 Security Balance:  $10,500,000.
               ------------------------------------

               Initial Class A-I-6 Security Balance:  $22,500,000.
               ------------------------------------

               Initial Class A-I-IO Security Balance:  $0.
               -------------------------------------

               Initial Class A-II Security Balance:  $207,500,000.
               -----------------------------------

               Initial   Security   Balance:   With   respect  to  the   Initial
Certificates,  $0.00,  the Term  Notes,  as listed  above for each Class and the
Variable Funding Notes, $0.00.

               Insolvency  Event:  With respect to a specified  Person,  (a) the
filing of a decree or order for  relief by a court  having  jurisdiction  in the
premises in respect of such Person or any substantial part of its property in an
involuntary  case under any applicable  bankruptcy,  insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,  assignee,
custodian,  trustee, sequestrator or similar official for such Person or for any
substantial  part of its property,  or ordering the winding-up or liquidation of
such  Person's  affairs,  and such decree or order shall remain  unstayed and in
effect for a period of 60  consecutive  days;  or (b) the  commencement  by such
Person of a voluntary case under any applicable bankruptcy,  insolvency or other
similar  law now or  hereafter  in effect,  or the consent by such Person to the
entry of an order for relief in an  involuntary  case under any such law, or the
consent by such Person to the appointment of or taking possession by a receiver,
liquidator,  assignee,  custodian, trustee, sequestrator or similar official for
such Person or for any substantial  part of its property,  or the making by such

                                       30
<PAGE>

Person of any general assignment for the benefit of creditors, or the failure by
such Person generally to pay its debts as such debts become due or the admission
by such Person in writing (as to which the Indenture  Trustee shall have notice)
of its  inability  to pay its debts  generally,  or the adoption by the Board of
Directors  or managing  member of such Person of a resolution  which  authorizes
action by such Person in furtherance of any of the foregoing.

               Insurance Agreement: The Insurance and Indemnity Agreement, dated
as of the Closing Date,  among the Master Servicer,  the Seller,  the Depositor,
the  Issuer,  the  Indenture  Trustee  and the Credit  Enhancer,  including  any
amendments and supplements thereto.

               Insurance Proceeds:  Proceeds paid by any insurer (other than the
Credit  Enhancer)  pursuant to any insurance  policy covering a Home Equity Loan
which are required to be remitted to the Master Servicer, or amounts required to
be paid by the Master Servicer  pursuant to the next to last sentence of Section
3.04(a) of the Servicing  Agreement,  net of any component  thereof (i) covering
any expenses  incurred by or on behalf of the Master Servicer in connection with
obtaining  such proceeds,  (ii) that is applied to the  restoration or repair of
the related  Mortgaged  Property,  (iii) released to the Mortgagor in accordance
with the Master  Servicer's  normal servicing  procedures or (iv) required to be
paid to any holder of a mortgage senior to such Home Equity Loan.

               Insured  Undercollateralization Payment Date: The earliest of (i)
the ninth  Payment  Date or (ii) the  Payment  Date  immediately  following  the
purchase of the Group II Loans or Class II Notes by the Master Servicer pursuant
to Section 8.08 of the Servicing Agreement .

               Interest  Collections:  With  respect to any Payment Date and the
Group I Loans,  the sum of all  payments by or on behalf of  Mortgagors  and any
other amounts  constituting  interest (including without limitation such portion
of Insurance  Proceeds,  Net  Liquidation  Proceeds and Repurchase  Prices as is
allocable to interest on the  applicable  Group I Loan) as is paid by the Seller
or the Master  Servicer or is collected by the Master Servicer under the Group I
Loans,  reduced by the Servicing  Fees with respect to the Group I Loans for the
related  Collection  Period, by any fees (including annual fees) or late charges
or similar  administrative fees paid by Mortgagors during the related Collection
Period  with  respect  to the  Group I  Loans.  The  terms of the  related  Loan
Agreement shall determine the portion of each payment in respect of such Group I
Loan that constitutes principal or interest.

               With respect to any Payment Date and the Group II Loans,  the sum
of all payments by or on behalf of Mortgagors and any other amounts constituting
interest (including without limitation such portion of Insurance  Proceeds,  Net
Liquidation  Proceeds and  Repurchase  Prices as is allocable to interest on the
applicable  Group II Loan) as is paid by the Seller or the Master Servicer or is
collected by the Master Servicer under the Group II Loans  (exclusive of the pro
rata portion thereof  attributable  to any Excluded  Amounts not conveyed to the
Trust  following an Amortization  Event),  reduced by the Servicing Fees for the
related  Collection  Period  and by any  fees  (including  annual  fees) or late
charges or similar  administrative  fees paid by  Mortgagors  during the related
Collection  Period with respect to the Group II Loans.  The terms of the related
Loan  Agreement  shall  determine the portion of each payment in respect of such
Group II Loan that constitutes principal or interest.

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<PAGE>

               Interest  Distribution  Amount:  With  respect  to any  Class  or
Classes  of Class I Notes or Class II Notes,  and any  Payment  Date,  an amount
equal to interest accrued during the related Interest Period on those Classes of
Notes on their respective  Security Balance or Notional Amount immediately prior
to that Payment Date, at the related Note Rate, or Note Rates,  minus the amount
of any Relief Act  Shortfalls on the Home Equity Loans in the related Loan Group
during the related  Collection Period allocated to those Classes,  and minus, in
the case of the Class I Notes, any Prepayment Interest Shortfalls on the Group I
Loans during the related Collection Period allocated to such Classes.

               Interest  Period:  With  respect to the Class I Notes (other than
the Class A-I-1 Notes) and any Payment Date,  the calendar  month  preceding the
month in which such Payment Date occurs. The Interest Period for the Class A-I-1
Notes and the Class A-II Notes shall be, with  respect to any Payment Date other
than the first Payment Date, the period beginning on the preceding  Payment Date
and ending on the day preceding  such Payment Date, and in the case of the first
Payment  Date,  the period  beginning  on the Closing Date and ending on the day
preceding the first Payment Date.

               Interest Rate Adjustment  Date:  With respect to each HELOC,  the
date or dates on which the Loan Rate is adjusted in accordance  with the related
Loan Agreement.

     Interim  Certification:  The  meaning  specified  in Section  2.1(c) of the
Purchase Agreement.

     Issuer or Trust: The Home Equity Loan Trust 2002-HS3,  a Delaware statutory
trust, or its successor in interest.

     Issuer Request: A written order or request signed in the name of the Issuer
by any one of its Authorized Officers and delivered to the Indenture Trustee.

               LIBOR:  For any  Interest  Period  other than the first  Interest
Period,  the rate for United States dollar  deposits for one month which appears
on the Telerate Screen Page 3750 as of 11:00 A.M., London,  England time, on the
second LIBOR Business Day prior to the first day of such Interest  Period.  With
respect to the first Interest Period, the rate for United States dollar deposits
for one month which  appears on the Telerate  Screen Page 3750 as of 11:00 A.M.,
London, England time, two LIBOR Business Days prior to the Closing Date. 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
Indenture  Trustee after  consultation  with the Master  Servicer and the Credit
Enhancer),  the rate will be the Reference Bank Rate. If no such  quotations can
be  obtained  and no  Reference  Bank  Rate is  available,  LIBOR  will be LIBOR
applicable to the preceding Payment Date.

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

               Lien:   Any  mortgage,   deed  of  trust,   pledge,   conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other),  preference,  priority right or interest or other security
agreement  or  preferential  arrangement  of  any  kind  or  nature  whatsoever,

                                       32
<PAGE>

including,  without  limitation,  any conditional  sale or other title retention
agreement,  any financing lease having substantially the same economic effect as
any of the  foregoing and the filing of any  financing  statement  under the UCC
(other than any such financing statement filed for informational  purposes only)
or  comparable  law of  any  jurisdiction  to  evidence  any  of the  foregoing;
provided, however, that any assignment pursuant to Section 6.02 of the Servicing
Agreement shall not be deemed to constitute a Lien.

               Liquidated  Home Equity Loan:  With respect to any Payment  Date,
any Home Equity Loan in respect of which the Master Servicer has determined,  in
accordance with the servicing  procedures  specified in the Servicing Agreement,
as  of  the  end  of  the  related  Collection  Period  that  substantially  all
Liquidation  Proceeds  which it  reasonably  expects to  recover,  if any,  with
respect to the  disposition of the related Home Equity Loan have been recovered.
The  Master  Servicer  will  treat  any  Group I Loan  that is 180  days or more
Delinquent as having been finally liquidated.

               Liquidation  Expenses:   Out-of-pocket   expenses  (exclusive  of
overhead)  which  are  incurred  by or on  behalf  of  the  Master  Servicer  in
connection  with the liquidation of any Home Equity Loan and not recovered under
any insurance policy,  such expenses including,  without limitation,  legal fees
and expenses,  any unreimbursed amount expended (including,  without limitation,
amounts  advanced to correct  defaults on any  mortgage  loan which is senior to
such Home Equity Loan and amounts advanced to keep current or pay off a mortgage
loan that is senior to such Home Equity Loan) respecting the related Home Equity
Loan and any  related and  unreimbursed  expenditures  for real estate  property
taxes or for property  restoration,  preservation or insurance  against casualty
loss or damage.

               Liquidation  Loss  Amounts:  With respect to any Payment Date and
any Home  Equity  Loan that  became a  Liquidated  Home  Equity  Loan during the
related Collection  Period, the unrecovered  portion of the related Loan Balance
thereof at the end of such  Collection  Period,  after giving  effect to the Net
Liquidation  Proceeds applied in reduction of the Loan Balance.  If a Bankruptcy
Loss has  occurred  with  respect  to any Home  Equity  Loan,  the amount of the
Bankruptcy Loss will be treated as a Liquidation Loss Amount.

               Liquidation Loss Distribution Amount: With respect to the Group I
Loans and any Payment Date,  the aggregate of (A) 100% of the  Liquidation  Loss
Amounts (other than any Excess Loss Amounts)  incurred with respect to the Group
I Loans during the related Collection Period, plus (B) any such Liquidation Loss
Amounts (other than any Excess Loss Amounts)  remaining  undistributed  from any
preceding  Payment Date,  provided that any Liquidation Loss Amount described in
this clause (B) shall not be distributed to the extent that the Liquidation Loss
Amount  was paid on the  Class I Notes by means of a draw on the Group I Policy,
from  collections  on the Home  Equity  Loans in the other  Loan  Group,  or was
reflected in the reduction of the Group I Overcollateralization Amount.

               With  respect  to the Group II Loans and any  Payment  Date,  the
aggregate of (A) 100% of the  Liquidation  Loss  Amounts  (other than any Excess
Loss  Amounts)  incurred  with  respect to the Group II Loans during the related
Collection  Period,  plus (B) any such  Liquidation Loss Amounts (other than any
Excess Loss Amounts)  remaining  undistributed  from any preceding Payment Date,

                                       33
<PAGE>

provided that any Liquidation Loss Amount described in this clause (B) shall not
be  distributed to the extent that the  Liquidation  Loss Amount was paid on the
Class II Notes by means of a draw on the Group II Policy,  from  collections  on
the Home Equity Loans in the other Loan Group, or was reflected in the reduction
of the Group II Overcollateralization Amount.

               Liquidation Proceeds:  Proceeds (including Insurance Proceeds but
not including amounts drawn under the Group I Policy and Group II Policy) if any
received in connection  with the  liquidation of any Home Equity Loan or related
REO, whether through trustee's sale, foreclosure sale or otherwise.

               Loan Agreement: With respect to any HEL, the promissory note, or,
with respect to any HELOC,  the credit line account  agreement,  executed by the
related Mortgagor and any amendment or modification thereof.

               Loan Balance: With respect to any HEL, other than a HEL which has
become a  Liquidated  Home Equity Loan,  and as of any day, the related  Cut-off
Date Loan Balance minus all collections  credited as principal in respect of any
such HEL in accordance  with the related Loan Agreement and applied in reduction
of the Loan Balance thereof. With respect to any HELOC, other than a HELOC which
has become a Liquidated Home Equity Loan, and as of any day, the related Cut-off
Date Loan  Balance,  plus (i) any  Additional  Balances in respect of such HELOC
conveyed  to the Trust,  minus (ii) all  collections  credited as  principal  in
respect of any such HELOC in accordance with the related Loan Agreement  (except
for any such  collections that are allocable to any Excluded Amount) and applied
in reduction of the Loan Balance  thereof.  For purposes of this  definition,  a
Liquidated  Home Equity Loan shall be deemed to have a Loan Balance equal to the
Loan Balance of the related HEL or HELOC immediately prior to the final recovery
of  substantially  all related  Liquidation  Proceeds and a Loan Balance of zero
thereafter.

     Loan Rate:  With respect to any Home Equity Loan and any day, the per annum
rate of interest applicable under the related Loan Agreement.

               Loan Group:  Loan Group I or Loan Group II.

               Loan  Group I:  The  HELs  identified  on the  Home  Equity  Loan
Schedule as being assigned to Loan Group I and which correspond with the Class I
Notes.

               Loan Group I SB-IO Marker Rate: Two times the weighted average of
the REMIC II  Remittance  Rates for the Class LT2 REMIC II Regular  Interest and
the Class LT3 REMIC II  Regular  Interest  weighted  by their  respective  Class
Principal Balances.

               Loan Group II:  The HELOCs  identified  on the Home  Equity  Loan
Schedule as being assigned to Loan Group II and which  correspond with the Class
II Notes.

               Lost Note  Affidavit:  With respect to any Home Equity Loan as to
which the original Loan Agreement has been permanently lost or destroyed and has
not been replaced,  an affidavit  from the Seller or the related  Program Seller
certifying  that the  original  Loan  Agreement  has  been  lost,  misplaced  or
destroyed (together with a copy of the related Loan Agreement).

                                       34
<PAGE>

     Master Servicer:  Residential Funding Corporation,  a Delaware corporation,
and its successors and assigns.

               Master  Servicing  Fee:  With respect to any Home Equity Loan and
any Collection  Period, the product of (i) the Master Servicing Fee Rate divided
by 12 and (ii) the related Loan  Balance as of the first day of such  Collection
Period.

     Master  Servicing Fee Rate: With respect to any Home Equity Loan, 0.08% per
annum.

               Maturity  Date:  With  respect  to each Class of Class I Notes of
regular interest or  Uncertificated  Regular Interest issued by each of REMIC I,
REMIC II and REMIC III, the latest possible  maturity date,  solely for purposes
of  Section  1.860G-1(a)(4)(iii)  of the  Treasury  Regulations,  by  which  the
Security  Balance  of each such  Class of Class I Notes  representing  a regular
interest  in the Trust Fund  would be  reduced to zero,  which is, for each such
regular  interest other than the Class A-I-IO Notes,  August 25, 2032,  which is
the second Payment Date following the latest  maturity date of any Group I Loan,
and which is for the Class A-I-IO Notes, March 25, 2005.

               Maximum  Rate:  With  respect to each HELOC with respect to which
the related Loan  Agreement  provides for a lifetime  rate cap, the maximum Loan
Rate  permitted  over the  life of such  HELOC  under  the  terms  of such  Loan
Agreement,  as set forth on the Home Equity Loan  Schedule and  initially as set
forth on Exhibit A to the Servicing Agreement.

               Maximum Variable Funding Balance: The maximum Security Balance of
the Variable  Funding  Notes,  which shall be an amount equal to  $56,098,402 or
such  greater  amount  as may be  permitted  pursuant  to  Section  9.01  of the
Indenture.

     MERS:  Mortgage  Electronic   Registration  Systems,  Inc.,  a  corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

               MERS(R)  System:  The system of recording  transfers of Mortgages
electronically maintained by MERS.

     MIN: The Mortgage  Identification  Number for Home Equity Loans  registered
with MERS on the MERS(R)System.

               Minimum Monthly Payment: With respect to any HELOC and any month,
the minimum amount  required to be paid by the related  Mortgagor in such month.
With respect to any HEL and any month, the scheduled  monthly payment due on the
related Due Date.

               MOM Loan:  With respect to any Home Equity  Loan,  MERS acting as
the mortgagee of such Home Equity Loan,  solely as nominee for the originator of
such  Home  Equity  Loan and its  successors  and  assigns,  at the  origination
thereof.

                                       35
<PAGE>

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

               Mortgage:  The  mortgage,  deed  of  trust  or  other  instrument
creating  a first or second  lien on an estate in fee  simple  interest  in real
property securing a Home Equity Loan.

               Mortgage  File:  The  file   containing  the  Related   Documents
pertaining  to a  particular  Home  Equity  Loan  and any  additional  documents
required to be added to the Mortgage File pursuant to the Purchase  Agreement or
the Servicing Agreement.

               Mortgage  Note:  With respect to a Home Equity Loan, the mortgage
note  pursuant to which the  related  Mortgagor  agrees to pay the  indebtedness
evidenced thereby and secured by a Mortgage on a related Mortgaged Property,  as
modified or amended.

     Mortgaged Property:  The underlying  property,  including real property and
improvements thereon, securing a Home Equity Loan.

               Mortgagor:  The obligor or obligors under a Loan Agreement.

               Net  Liquidation  Proceeds:  With respect to any Liquidated  Home
Equity Loan,  Liquidation Proceeds (excluding any draws under the Group I Policy
and Group II Policy) net of Liquidation Expenses (but not including the portion,
if any, of such net amount that exceeds the Loan Balance of the Home Equity Loan
at the end of the Collection Period immediately  preceding the Collection Period
in which such Home Equity  Loan  became a  Liquidated  Home  Equity  Loan,  plus
accrued and unpaid  interest on such Loan Balance from the date last paid to the
date of receipt of final Liquidation Proceeds).

     Net Loan  Rate:  With  respect  to any Home  Equity  Loan and any day,  the
related Loan Rate less: (1) 0.58% per annum and (2) the related Credit  Enhancer
Premium Rate.

               Net Principal Collections: With respect to the Group II Loans and
any Payment Date, the excess,  if any, of Principal  Collections for the related
Collection  Period over the amount of  Additional  Balances  created  during the
related Collection Period and conveyed to the Trust Estate.

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

     Note Owner: The Beneficial Owner of a Note.

     Note Rate: With respect to the Notes and any Interest Period, the following
rates:

          (i)  Class A-I-1 Notes:  the least of (1) LIBOR plus 0.14%,  (2) 8.00%
               per annum, and (3) the Group I Net WAC Rate;

          (ii) Class A-I-2 Notes:  the lesser of (i) 3.03% per annum or (ii) the
               Group I Net WAC Rate;

          (iii)Class A-I-3 Notes:  the lesser of (i) 3.49% per annum or (ii) the
               Group I Net WAC Rate;

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<PAGE>

          (iv) Class A-I-4 Notes:  the lesser of (i) 4.36% per annum or (ii) the
               Group I Net WAC Rate;

          (v)  Class A-I-5 Notes:  the lesser of (1) a fixed rate equal to 4.93%
               per annum (or, for any Interest Period commencing with the second
               Payment Date after the Group I Step-Up Date,  5.43% per annum) or
               (2) the Group I Net WAC Rate;

          (vi) Class A-I-6 Notes:  the lesser of (i) 4.48% per annum or (ii) the
               Group I Net WAC Rate;

          (vii)Class  A-I-IO  Notes:  (i) in the case of any Payment  Date up to
               and  including  the March 2005  Payment  Date,  the lesser of (a)
               6.50% per annum or (b) the REMIC I Remittance  Rate,  and (ii) in
               the case of any Payment Date after the March 2005  Payment  Date,
               0% per annum;

          (viii) Class  A-II  Notes:  the least of (i) LIBOR  plus  0.34%,  (ii)
               17.25% per annum and (iii) the Group II Net WAC Rate.

          (ix) Variable Funding Notes:  the least of (i) LIBOR plus 0.34%,  (ii)
               17.25% per annum and (iii) the Group II Net WAC Rate.

     Note Register:  The register  maintained by the Note Registrar in which the
Note Registrar shall provide for the  registration of Notes and of transfers and
exchanges of Notes.

     Note Registrar: The Indenture Trustee, in its capacity as Note Registrar.

               Noteholder:  The Person in whose name a Note is registered in the
Note Register,  except that,  any Note  registered in the name of the Depositor,
the Issuer or the  Indenture  Trustee or any  Affiliate  of any of them shall be
deemed not to be outstanding and the registered  holder will not be considered a
Noteholder or holder for purposes of giving any request, demand,  authorization,
direction,  notice, consent or waiver under the Indenture or the Trust Agreement
provided that, in determining  whether the Indenture  Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Notes that the  Indenture  Trustee or the Owner Trustee
knows to be so owned  shall be so  disregarded.  Owners of Notes  that have been
pledged in good faith may be regarded as Holders if the pledgee  establishes  to
the  satisfaction  of the  Indenture  Trustee or the Owner Trustee the pledgee's
right so to act with  respect  to such  Notes  and that the  pledgee  is not the
Issuer,  any  other  obligor  upon  the  Notes  or any  Affiliate  of any of the
foregoing Persons.

     Notes:  Collectively,  the Term Notes and the Variable Funding Notes issued
and outstanding at any time pursuant to the Indenture.

               Notional Amount:  With respect to the Class SB-I Certificates and
the REMIC III Regular  Interest SB-IO and any Payment Date, the aggregate of the
Class Principal  Balances for all Classes of REMIC II Regular  Interests  before
giving  effect to payments to be made and the  allocation  of  Liquidation  Loss
Amounts to occur on such Payment  Date.  With respect to the Class A-I-IO Notes,
the Class A-I-IO Notional Amount.

                                       37
<PAGE>

               Officer's  Certificate:  With respect to the Master  Servicer,  a
certificate  signed by the  President,  Managing  Director,  a Director,  a Vice
President or an Assistant Vice  President,  of the Master Servicer and delivered
to the Indenture  Trustee.  With respect to the Issuer, a certificate  signed by
any Authorized Officer of the Issuer, under the circumstances  described in, and
otherwise  complying  with, the applicable  requirements of Section 10.01 of the
Indenture,  and delivered to the Indenture Trustee.  Unless otherwise specified,
any  reference  in the  Indenture  to an  Officer's  Certificate  shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.

               Opinion of Counsel: A written opinion of counsel.  Any Opinion of
Counsel for the Master  Servicer  may be  provided  by in-house  counsel for the
Master Servicer if reasonably  acceptable to the Indenture  Trustee,  the Credit
Enhancer and the Rating  Agencies or counsel for the Depositor,  as the case may
be.

     Original Trust Agreement:  The Trust  Agreement,  dated as of September 23,
2002, between the Owner Trustee and the Depositor.

     Outstanding:  With respect to the Notes,  as of the date of  determination,
all Notes theretofore executed, authenticated and delivered under this Indenture
except:

               (i)  Notes  theretofore   cancelled  by  the  Note  Registrar  or
          delivered to the Indenture Trustee for cancellation; and

                      (ii) Notes in exchange for or in lieu of which other Notes
        have  been  executed,   authenticated  and  delivered  pursuant  to  the
        Indenture  unless  proof   satisfactory  to  the  Indenture  Trustee  is
        presented that any such Notes are held by a holder in due course;

provided, however, that for purposes of effectuating the Credit Enhancer's right
of  subrogation  as set forth in Section 4.12 of the Indenture  only,  all Notes
that have been paid with funds provided under the Group I Policy or the Group II
Policy  shall be deemed to be  Outstanding  until the Credit  Enhancer  has been
reimbursed with respect thereto.

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

     Owner Trust Estate: The corpus of the Issuer created by the Trust Agreement
which consists of the Home Equity Loans.

               Owner  Trustee:  Wilmington  Trust Company not in its  individual
capacity  but  solely as Owner  Trustee  of the Trust,  and its  successors  and
assigns or any successor  owner trustee  appointed  pursuant to the terms of the
Trust Agreement.

     Paying Agent:  Any paying agent or co-paying  agent  appointed  pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

                                       38
<PAGE>

               Payment Account: The account established by the Indenture Trustee
pursuant to Section  8.02 of the  Indenture  and Section  5.01 of the  Servicing
Agreement.  Amounts  deposited in the Payment Account will be distributed by the
Indenture Trustee in accordance with Section 3.05 of the Indenture.

     Payment Date: The 25th day of each month,  or if such day is not a Business
Day, then the next Business Day.

               Percentage  Interest:  With  respect to any Note and any  Payment
Date, the percentage  obtained by dividing the Security  Balance of such Note by
the aggregate of the Security  Balances of all Notes  (including  the Term Notes
and the Variable  Funding Notes) or all Notes of the same Class,  as applicable,
prior to such  Payment  Date.  With respect to any  Certificate  and any Payment
Date, the Percentage Interest stated on the face of such Certificate.

               Permitted Investments:  One or more of the following:

               (i)  obligations of or guaranteed as to principal and interest by
        the United  States or any agency or  instrumentality  thereof  when such
        obligations  are  backed  by the full  faith and  credit  of the  United
        States;

               (ii) repurchase agreements on obligations specified in clause (i)
        maturing not more than one month from the date of  acquisition  thereof,
        provided  that  the  unsecured  obligations  of the  party  agreeing  to
        repurchase such  obligations are at the time rated by each Rating Agency
        in its highest short-term rating category available;

               (iii) federal funds,  certificates of deposit,  demand  deposits,
        time  deposits  and  bankers'  acceptances  (which  shall  each  have an
        original  maturity of not more than 90 days and, in the case of bankers'
        acceptances,  shall in no event have an  original  maturity of more than
        365 days or a remaining  maturity of more than 30 days)  denominated  in
        United  States  dollars  of any  U.S.  depository  institution  or trust
        company  incorporated  under the laws of the United  States or any state
        thereof or of any domestic branch of a foreign depository institution or
        trust company;  provided that the debt  obligations  of such  depository
        institution  or trust company (or, if the only Rating Agency is Standard
        &  Poor's,  in the case of the  principal  depository  institution  in a
        depository   institution  holding  company,   debt  obligations  of  the
        depository  institution  holding  company)  at the  date of  acquisition
        thereof have been rated by each Rating Agency in its highest  short-term
        rating category available; and provided further that, if the only Rating
        Agency is Standard & Poor's and if the  depository or trust company is a
        principal  subsidiary of a bank holding company and the debt obligations
        of such subsidiary are not separately rated, the applicable rating shall
        be that of the bank holding company;  and, provided further that, if the
        original maturity of such short-term obligations of a domestic branch of
        a foreign depository  institution or trust company shall exceed 30 days,
        the short-term  rating of such institution  shall be A-1+ in the case of
        Standard & Poor's if Standard & Poor's is the Rating Agency;

               (iv)  commercial  paper (having  original  maturities of not more
        than 365  days) of any  corporation  incorporated  under the laws of the

                                       39
<PAGE>

        United States or any state thereof which on the date of acquisition  has
        been  rated by each  Rating  Agency  in its  highest  short-term  rating
        category  available;  provided that such  commercial  paper shall have a
        remaining maturity of not more than 30 days;

               (v) a money market fund or a qualified  investment  fund rated by
        each Rating Agency in its highest  long-term rating category  available;
        and

               (vi) other  obligations or securities that are acceptable to each
        Rating Agency as an Permitted  Investment  hereunder and will not reduce
        the rating  assigned to any  Securities  by such Rating Agency below the
        lower  of  the  then-current  rating  or the  rating  assigned  to  such
        Securities as of the Closing Date by such Rating  Agency,  and which are
        acceptable  to the Credit  Enhancer,  as evidenced in writing,  provided
        that if the Master Servicer or any other Person controlled by the Master
        Servicer  is the issuer or the  obligor of any  obligation  or  security
        described in this clause (vi) such  obligation  or security must have an
        interest  rate or  yield  that  is  fixed  or is  variable  based  on an
        objective  index that is not affected by the rate or amount of losses on
        the Home Equity Loans;

provided,  however,  that no  instrument  shall be a Permitted  Investment if it
represents,  either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive 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 greater than 120% of the yield to maturity at par of such underlying
obligations  References  herein to the highest  rating  available  on  unsecured
long-term  debt shall  mean AAA in the case of  Standard & Poor's and Aaa in the
case of Moody's,  and  references  herein to the  highest  rating  available  on
unsecured commercial paper and short-term debt obligations shall mean A-1 in the
case of Standard & Poor's and P-1 in the case of Moody's.

     Permitted Transferee: Any Transferee of a Class R Certificate, other than a
Disqualified Organization or Non-United States Person.

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

     Policy:  Each of the Group I Policy  and the  Group II  Policy or both,  as
applicable.

     Pool Balance:  With respect to any date, the aggregate of the Loan Balances
of all Home Equity Loans in a Loan Group as of such date.

               Predecessor  Note:  With respect to any  particular  Note,  every
previous Note  evidencing all or a portion of the same debt as that evidenced by
such  particular  Note;  and,  for the  purpose  of this  definition,  any  Note
authenticated  and  delivered  under  Section 4.03 of the Indenture in lieu of a
mutilated,  lost,  destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.

               Prepayment  Assumption:  With  respect to the Class I Notes,  the
prepayment  assumption  that will be used in determining  the rate of accrual of

                                       40
<PAGE>

original issue discount, market discount and premium, if any, for federal income
tax  purposes,  based  on the  assumption  that,  subsequent  to the date of any
determination,  the Group I Loans  will  prepay  at a rate  equal to 100% of the
prepayment  assumption  with  respect  to the  Group I Loans as  defined  in the
Prospectus Supplement.

               Prepayment Interest  Shortfall:  With respect to any Group I Loan
and any Payment Date, the aggregate  shortfall,  if any, in Interest Collections
on the Group I Loans,  adjusted  to the related  Net Loan Rate,  resulting  from
mortgagor  prepayments during the related  Collection  Period.  These shortfalls
will result because  interest on prepayments in full is distributed  only to the
date of  prepayment,  and because no interest is  distributed  on prepayments in
part, as these  prepayments in part are applied to reduce the  outstanding  Loan
Balance of the Home Equity Loans as of the Due Date  immediately  preceding  the
date of prepayment.

        Principal  Collection  Distribution  Amount: With respect to the Class I
Notes  and  any  Payment  Date,  the  lesser  of (a) the  excess  of (i) the P&I
Collections for Loan Group I over (ii) the Interest  Distribution Amount for the
Class I Notes and (b) the sum of:

               (i)  the  principal  portion  of  each  Minimum  Monthly  Payment
        received  with  respect to the Group I Loans and the related  Collection
        Period;

               (ii) the Loan Balance of any Group I Loan repurchased  during the
        related  Collection  Period  (or deemed to have been so  repurchased  in
        accordance with the Servicing Agreement) and the amount of any shortfall
        deposited in the Custodial  Account in connection with the  substitution
        of a Deleted Loan during the related Collection Period; and

               (iii) the principal portion of all other unscheduled  collections
        on  the  Group  I  Loans  (including,   without  limitation,   Principal
        Prepayments,  Insurance Proceeds, Liquidation Proceeds and REO Proceeds)
        received during the related Collection Period (or deemed to have been so
        received);

provided,  however,  on any  Payment  Date  with  respect  to which  the Group I
Overcollateralization Amount that would result if determined without application
of this proviso exceeds the Group I Required  Overcollateralization  Amount, the
Principal  Collection  Distribution Amount will be reduced by the amount of such
excess  until  the  Group I  Overcollateralization  Amount  equals  the  Group I
Required Overcollateralization Amount.

               With respect to the Class A-II Notes,  for any Payment Date,  (i)
at any time during the Revolving  Period,  so long as an Amortization  Event has
not occurred, Net Principal Collections and (ii) following an Amortization Event
or at any time after the end of the  Revolving  Period,  Principal  Collections;
provided,  however,  on any  Payment  Date  with  respect  to which the Group II
Overcollateralization Amount that would result if determined without application
of this proviso exceeds the Group II Required  Overcollateralization Amount, the
Principal  Collection  Distribution Amount will be reduced by the amount of such
excess  until  the Group II  Overcollateralization  Amount  equals  the Group II
Required Overcollateralization Amount.

     Principal Collections: With respect to any Payment Date and any Home Equity
Loan in a Loan Group, the aggregate of the following amounts:

                                       41
<PAGE>

               (i) the  total  amount  of  payments  made by or on behalf of the
        Mortgagor,  received  and applied as payments of  principal  on the Home
        Equity  Loan during the related  Collection  Period,  as reported by the
        related Subservicer;

               (ii) any Net  Liquidation  Proceeds,  allocable  as a recovery of
        principal,  received in connection  with the Home Equity Loan during the
        related Collection Period;

               (iii)  if the  Home  Equity  Loan  was  purchased  by the  Master
        Servicer  pursuant to Section  3.15 of the  Servicing  Agreement  or was
        repurchased by the Seller pursuant to the Purchase  Agreement during the
        related Collection  Period,  100% of the Loan Balance of the Home Equity
        Loan as of the date of such purchase or repurchase  and if a Home Equity
        Loan was  substituted  for a Deleted Loan,  the amount  deposited by the
        Seller as a Substitution Adjustment Amount; and

               (iv) any other amounts received as payments on or proceeds of the
        Home Equity Loan during the  Collection  Period to the extent applied in
        reduction of the principal amount thereof;

provided that Principal  Collections shall not include any Foreclosure  Profits,
and  shall be  reduced  by any  amounts  withdrawn  from the  Custodial  Account
pursuant to clauses (c), (d) and (j) of Section 3.03 of the Servicing Agreement,
and provided  further that  Principal  Collections  with respect to the Group II
Loans shall not include any portion of such  amounts  that are  allocable to any
Excluded Amount.

               Principal  Prepayment:  Any payment of  principal by a Mortgagor,
which is received in advance of its scheduled Due Date and is not accompanied by
an amount as to interest representing  scheduled interest on such payment due on
any date or dates in any month or months subsequent to the month of prepayment.

     Proceeding:  Any  suit  in  equity,  action  at law or  other  judicial  or
administrative proceeding.

     Program Guide:  Together, the Seller's Seller Guide and Servicing Guide, as
in effect from time to time.

     Program Seller:  With respect to any Home Equity Loan, the Person that sold
such Home Equity Loan to the Seller.

     Prospectus Supplement:  The prospectus supplement dated September 24, 2002,
relating to the Term Notes.

               Purchase  Agreement:  The Home  Equity Loan  Purchase  Agreement,
dated as of the Closing Date,  between the Seller, as seller, and the Depositor,
as purchaser, with respect to the Home Equity Loans.

     Purchase  Price:  The meaning  specified in Section  2.2(a) of the Purchase
Agreement.

                                       42
<PAGE>

     Purchaser:  Residential  Funding  Mortgage  Securities II, Inc., a Delaware
corporation, and its successors and assigns.

               P&I  Collections:  With  respect to Loan Group I and any  Payment
Date, the sum of Interest Collections and Principal Collections for that Payment
Date.  With respect to Loan Group II and any Payment  Date,  the sum of Interest
Collections for that Payment Date and so long as an  Amortization  Event has not
occurred and if during the Revolving Period, Net Principal  Collections for that
Payment Date, or if an Amortization  Event has occurred or the Revolving  Period
has ended,  Principal  Collections for the applicable Payment Date, in each case
with respect to the Group II Loans.

               Rating  Agency:  Any  nationally  recognized  statistical  rating
organization,  or its successor, that rated the Securities at the request of the
Depositor  at the time of the  initial  issuance of the  Securities.  Initially,
Moody's and Standard & Poor's.  If such organization or a successor is no longer
in existence,  "Rating Agency" shall be such nationally  recognized  statistical
rating  organization,  or other comparable Person,  designated by the Depositor,
notice of which designation shall be given to the Indenture Trustee.  References
herein to the highest short term  unsecured  rating  category of a Rating Agency
shall  mean A-1 or better in the case of  Standard  & Poor's or P-1 or better in
the case of Moody's and in the case of any other  Rating  Agency shall mean such
equivalent  ratings.  References herein to the highest long-term rating category
of a Rating  Agency  shall mean "AAA" in the case of Standard & Poor's and "Aaa"
in the  case  of  Moody's  and in the  case of any  other  Rating  Agency,  such
equivalent rating.

               Record Date: With respect to the Term Notes (other than the Class
A-I-1 Notes and the Class II Notes) and the  Certificates  and any Payment Date,
the last  Business Day of the month  preceding  the month of such Payment  Date.
With  respect to the Class  A-I-1  Notes and the Class II Notes and any  Payment
Date, the Business Day next preceding such Payment Date.

               Reference  Bank Rate:  With  respect to any Interest  Period,  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,
England  time,  on the second LIBOR  Business Day prior to the first day of such
Interest  Period to prime banks in the London  interbank  market for a period of
one month in amounts  approximately equal to the sum of the outstanding Security
Balance of the Class A-I-1 Notes and the Class II Notes;  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 Indenture  Trustee
after consultation with the Master Servicer and the Credit Enhancer, as of 11:00
a.m., New York 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
Security  Balance of the Class  A-I-I  Notes and the Class II Notes.  If no such
quotations can be obtained,  the Reference Bank Rate shall be the Reference Bank
Rate applicable to the preceding Interest Period.

               Reference   Banks:   Three  major  banks  which  are  engaged  in
transactions in the London interbank markets selected by the Indenture  Trustee,
after consultation with the Master Servicer and the Credit Enhancer.

                                       43
<PAGE>

     Registered  Holder:  The Person in whose name a Note is  registered  in the
Note Register on the applicable Record Date.

     Regular Interest:  Any of the REMIC I Regular  Interests,  REMIC II Regular
Interests or REMIC III Regular Interests.

               Related  Documents:  With respect to each Home Equity  Loan,  the
documents  specified  in  Section  2.1(c)  of the  Purchase  Agreement  and  any
documents  required  to be  added to such  documents  pursuant  to the  Purchase
Agreement, the Trust Agreement or the Servicing Agreement.

               Relief Act Shortfalls:  With respect to any Payment Date, for any
Home  Equity  Loan as to which  there  has been a  reduction  in the  amount  of
interest  collectible  thereon for the related  Collection Period as a result of
the  application  of the  Soldiers'  and Sailors'  Civil Relief Act of 1940,  as
amended, or any other similar federal or state law, the shortfall, if any, equal
to (i) one month's  interest on the Loan Balance of such Home Equity Loan at the
applicable  Loan Rate,  without  application of such Act, over (ii) the interest
collectible on such Home Equity Loan during such Collection Period.

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

               REMIC   Administrator:   Residential  Funding   Corporation.   If
Residential Funding Corporation is found by a court of competent jurisdiction to
no longer be able to fulfill its obligations as REMIC  Administrator  under this
Agreement the Master Servicer or Trustee acting as Master Servicer shall appoint
a  successor   REMIC   Administrator,   subject  to   assumption  of  the  REMIC
Administrator obligations under the Indenture and the Trust Agreement.

     REMIC I: The segregated  pool of assets in the Trust Estate with respect to
which a REMIC election is to be made.

               REMIC I Certificates:  The Class R-I Certificates.

               REMIC  I  Liquidation   Loss  Amounts:   For  any  Payment  Date,
Liquidation  Loss  Amounts  on the  Group  I  Mortgage  Loans  for  the  related
Collection Period shall be allocated as follows:  Liquidation Loss Amounts shall
be allocated  to the Class I-LTA and LTB REMIC I Regular  Interests in reduction
of the principal balances thereof to the extent required to reduce the aggregate
principal  balance of the Class I-LTA and LTB REMIC I Regular  Interests  to the
aggregate  principal  balance  of the  Loan  Group I  Mortgage  Loans  with  any
remaining  Liquidation  Loss Amounts treated as reducing accrued interest on the
Class I-LTA and LTB REMIC I Regular Interests.  Liquidation Loss Amounts treated
as  reducing  the  principal  balance of the Class I-LTA and LTB REMIC I Regular
Interests  shall  be  allocated,  first,  to the  Class I- LTA  REMIC I  Regular
Interests until the Principal  Balance of such Regular  Interest shall have been
reduced to zero, and,  thereafter,  to the Class I-LTB REMIC I Regular Interests
successively in ascending numerical order.

                                       44
<PAGE>

               REMIC I  Regular  Interests:  The  Class  I-LTA  REMIC I  Regular
Interest  and Class I-LTB REMIC I Regular  Interest  having the  properties  set
forth in the following table and elsewhere herein:
<TABLE>
<CAPTION>

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

                                 REMIC I                                          LATEST
      DESIGNATION               REMITTANCE               INITIAL                 POSSIBLE
          DATE                     RATE                   BALANCE              MATURITY(1)
------------------------- ----------------------- ----------------------- -----------------------

<S>                                   <C>            <C>                            <C> <C>
          LTA                Variable (2)(3)         $355,700,354.12         August 25, 2032

          LTB1                 Variable(2)             $1,070,000.00         August 25, 2032

          LTB2                 Variable(2)             $1,080,000.00         August 25, 2032

          LTB3                 Variable(2)             $2,150,000.00         August 25, 2032

          LTB4                 Variable(2)             $2,160,000.00         August 25, 2032

          LTB5                 Variable(2)             $3,230,000.00         August 25, 2032

          LTB6                 Variable(2)             $1,970,000.00         August 25, 2032

          LTB7                 Variable(2)             $3,230,000.00         August 25, 2032

          LTB8                 Variable(2)             $4,310,000.00         August 25, 2032

          LTB9                 Variable(2)             $2,160,000.00         August 25, 2032

         LTB10                 Variable(2)             $4,300,000.00         August 25, 2032

         LTB11                 Variable(2)             $3,230,000.00         August 25, 2032

         LTB12                 Variable(2)             $3,230,000.00         August 25, 2032

         LTB13                 Variable(2)             $3,240,000.00         August 25, 2032

         LTB14                 Variable(2)             $2,150,000.00         August 25, 2032

         LTB15                 Variable(2)             $2,150,000.00         August 25, 2032

         LTB16                 Variable(2)             $3,230,000.00         August 25, 2032

         LTB17                 Variable(2)             $2,160,000.00         August 25, 2032

         LTB18                 Variable(2)             $1,070,000.00         August 25, 2032

         LTB19                 Variable(2)             $2,160,000.00         August 25, 2032

         LTB20                 Variable(2)             $2,150,000.00         August 25, 2032

         LTB21                 Variable(2)             $2,160,000.00         August 25, 2032

         LTB22                 Variable(2)             $1,070,000.00         August 25, 2032

         LTB23                 Variable(2)             $1,080,000.00         August 25, 2032

         LTB24                 Variable(2)             $2,150,000.00         August 25, 2032

         LTB25                 Variable(2)             $1,080,000.00         August 25, 2032

                                       45
<PAGE>

         LTB26                 Variable(2)                     $0.00         August 25, 2032

         LTB27                 Variable(2)             $2,150,000.00         August 25, 2032

         LTB28                 Variable(2)             $1,080,000.00         August 25, 2032

         LTB29                 Variable(2)                     $0.00         August 25, 2032

         LTB30                 Variable(2)               $12,920,000         August 25, 2032
------------------------- ----------------------- ----------------------- -----------------------
</TABLE>

               (2)  Calculated  in  accordance  with the  definition of "REMIC I
Remittance Rate" herein.

               (3) The Class LTA REMIC I Regular  Interest will also be entitled
to receive amounts in the nature of prepayment  charges received with respect to
Loan  Group I,  provided  that this  payment  shall not be deemed to reduce  the
principal balance of the Class I-LT1 REMIC I Regular Interest.

               REMIC I Regular  Interest  LTB:  The Class I-LTB1 REMIC I Regular
Interest,  the Class I-LTB2 REMIC I Regular  Interest,  the Class I-LTB3 REMIC I
Regular Interest,  the Class I-LTB4 REMIC I Regular  Interest,  the Class I-LTB5
REMIC I Regular  Interest,  the Class  I-LTB6 REMIC  Interest,  the Class I-LTB7
REMIC I Regular Interest,  the Class I-LTB8 REMIC I Regular Interest,  the Class
I-LTB9 REMIC I Regular Interest, the Class I-LTB10 REMIC I Regular Interest, the
Class I-LT11 REMIC I Regular  Interest,  the Class I-LTB12 REMIC  Interest,  the
Class  I-LTB13  REMIC I  Regular  Interest,  the Class  I-LTB14  REMIC I Regular
Interest,  the Class I-LTB15 REMIC I Regular Interest, the Class I-LTB16 REMIC I
Regular Interest,  the Class I-LTB17 REMIC I Regular Interest, the Class I-LTB18
REMIC Interest,  the Class I-LTB19 REMIC I Regular  Interest,  the Class I-LTB20
REMIC I Regular Interest,  the Class I-LTB21 REMIC I Regular Interest, the Class
I-LTB22 REMIC I Regular Interest,  the Class LTB23 REMIC I Regular Interest, the
Class I-LTB24 REMIC Interest,  the Class I-LTB25 REMIC I Regular  Interest,  the
Class  I-LTB26  REMIC I  Regular  Interest,  the Class  I-LTB27  REMIC I Regular
Interest,  the Class I-LTB28 REMIC I Regular Interest, the Class I-LTB29 REMIC I
Regular Interest and the Class I-LT30 REMIC Interest.

               REMIC I Remittance Rate: With respect to any Payment Date and any
REMIC I Regular Interest,  a per annum rate equal to the weighted average of the
Net Loan Rates of the Group I Loans  applicable for the Interest Period for such
Payment Date.

               REMIC II Remittance  Rate:  With respect to the Class LT1 and LT2
REMIC II Regular Interests,  the Group I Net WAC Rate. With respect to Class LT3
REMIC II Regular Interest, zero (0.00%) per annum. With respect to the Class LT4
REMIC II Regular Interest,  twice the Group I Net WAC Rate. With respect to each
REMIC II  Regular  Interest  LTA-IO,  the rate  defined in  footnote  (2) of the
definition of REMIC II Regular Interest.

               REMIC  II:  The  segregated   pool  of  assets  subject   hereto,
constituting   a  portion  of  the  primary  trust  created  hereby  and  to  be
administered hereunder, with respect to which a separate REMIC election is to be
made, consisting of the REMIC I Regular Interests.

               REMIC  II  Liquidation  Loss  Amounts:   For  any  Payment  Date,
Liquidation Loss Amounts on the Group I Loans for the related  Collection Period
shall be allocated as follows:  Liquidation  Loss Amounts shall be allocated pro
rata to the REMIC II  Regular  Interests  LTA-IO  to the  extent,  if any,  that
Liquidation Loss Amounts for such Payment Date are allocated to the Class A-I-IO
Notes.  Any  remaining  Liquidation  Loss Amounts  shall be allocated (i) to the

                                       46
<PAGE>

REMIC II  Regular  Interest  LT2,  REMIC II  Regular  Interest  LT3 and REMIC II
Regular Interest LT4 pro rata according to their respective  Principal Reduction
Amounts,  provided that such allocation to each of the REMIC II Regular Interest
LT2, REMIC II Regular  Interest LT3 and REMIC II Regular  Interest LR4 shall not
exceed their respective  Principal  Reduction Amounts for such Payment Date, and
(ii) any  Liquidation  Loss Amounts not allocated to any of the REMIC II Regular
Interest  LT2,  REMIC II Regular  Interest LT3 or REMIC II Regular  Interest LT4
pursuant to the proviso of clause (i) shall be allocated to the REMIC II Regular
Interest LT1, until the principal  balance of such RMEIC II Regular Interest LT1
shall have been  reduced  to zero.  If any  Liquidation  Loss  Amounts  for such
Payment Date remain,  such amounts shall be allocated among the REMIC II Regular
Interest LT2,  REMIC II Regular  Interest LT3 and REMIC II Regular  Interest LT4
pro rata according to their respective principal balances after reduction by the
Liquidation Loss Amounts allocated to such REMIC II Regular  Interests  pursuant
to the preceding sentence.

               REMIC II Regular  Interests:  REMIC II Regular  Interests LTA-IO,
LT1, LT2, LT3 and LT4 having the properties set forth in the following table and
elsewhere herein:
<TABLE>
<CAPTION>

---------------- -------------------------- ---------------------- -----------------------
                         REMIC II           Initial Uncertificated     Latest Possible
  Designation         Remittance Rate          Principal Balance        Maturity Date

---------------- -------------------------- ---------------------- -----------------------
<S>     <C>                     <C>         <C>                              <C> <C>
      LT1               Variable(1)         $      224,964,960.57     August 25, 2032
      LT2               Variable(1)         $            9,641.06     August 25, 2032
      LT3               Variable(1)         $           12,858.97     August 25, 2032
      LT4               Variable(1)         $           12,858.97     August 25, 2032
    LTA-IO1             Variable(2)            $           N/A(3)     October 25, 2002
    LTA-IO2             Variable(2)            $           N/A(3)    November 25, 2002
    LTA-IO3             Variable(2)            $           N/A(3)    December 25, 2002
    LTA-IO4             Variable(2)            $           N/A(3)     January 25, 2003
    LTA-IO5             Variable(2)            $           N/A(3)    February 25, 2003
    LTA-IO6             Variable(2)            $           N/A(3)      March 25, 2003
    LTA-IO7             Variable(2)            $           N/A(3)      April 25, 2003
    LTA-IO8             Variable(2)            $           N/A(3)       May 25, 2003
    LTA-IO9             Variable(2)            $           N/A(3)      June 25, 2003
   LTA-IO10             Variable(2)            $           N/A(3)      July 25, 2003
   LTA-IO11             Variable(2)            $           N/A(3)     August 25, 2003
   LTA-IO12             Variable(2)            $           N/A(3)    September 25, 2003
   LTA-IO13             Variable(2)            $           N/A(3)     October 25, 2003
   LTA-IO14             Variable(2)            $           N/A(3)    November 25, 2003
   LTA-IO15             Variable(2)            $           N/A(3)    December 25, 2003
   LTA-IO16             Variable(2)            $           N/A(3)     January 25, 2003
   LTA-IO17             Variable(2)            $           N/A(3)    February 25, 2004
   LTA-IO18             Variable(2)            $           N/A(3)      March 25, 2004
   LTA-IO19             Variable(2)            $           N/A(3)      April 25, 2004
   LTA-IO20             Variable(2)            $           N/A(3)       May 25, 2004
   LTA-IO21             Variable(2)            $           N/A(3)      June 25, 2004
   LTA-IO22             Variable(2)            $           N/A(3)      July 25, 2004
   LTA-IO23             Variable(2)            $           N/A(3)     August 25, 2004
   LTA-IO24             Variable(2)            $           N/A(3)    September 25, 2004
   LTA-IO25             Variable(2)            $           N/A(3)     October 25, 2004

                                       47
<PAGE>

   LTA-IO26             Variable(2)            $           N/A(3)    November 25, 2004
   LTA-IO27             Variable(2)            $           N/A(3)    December 25, 2004
   LTA-IO28             Variable(2)            $           N/A(3)     January 25, 2005
   LTA-IO29             Variable(2)            $           N/A(3)    February 25, 2005
   LTA-IO30             Variable(2)            $           N/A(3)      March 25, 2005
---------------- -------------------------- ---------------------- -----------------------
</TABLE>

(1)     Calculated as provided in the definition of REMIC II Remittance Rate.

(2)  Until the "latest  possible  maturity date" set forth in the last column of
     this table, a per annum rate equal to 6.50% or the REMIC I Remittance Rate,
     if  less,  and  0.00%  thereafter.  The  "latest  possible  maturity  date"
     (determined solely for purposes of satisfying  Treasury  regulation Section
     1.860G-1(a)(4)(iii))  for  each  REMIC  II  Regular  Interest  shall be the
     Maturity Date.

(3)     REMIC II  Regular  Interests  LTA-IO  will  not  have an  Uncertificated
        Principal  Balance,  but  will  accrue  interest  on its  Uncertificated
        Notional  Amount  outstanding  from time to time which  shall  equal the
        Uncertificated  Principal  Balance of REMIC I Regular  Interest LTB with
        the same numerical  designation  (the "Related REMIC I Regular  Interest
        LTB") for Distribution  Dates on or before the Latest Possible  Maturity
        Date for such REMIC II Regular Interest LTA-IO,  and thereafter shall be
        $0.00.

               REMIC II Regular  Interest  LTA-IO1:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO1 shall be treated as related to Class I-LTB1 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO2:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO2 shall be treated as related to Class I-LTB2 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO3:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO3 shall be treated as related to Class I-LTB3 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO4:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO4 shall be treated as related to Class I-LTB4 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO5:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO5 shall be treated as related to Class I-LTB5 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO6:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO6 shall be treated as related to Class I-LTB6 REMIC I
Regular Interest.

                                       48
<PAGE>

               REMIC II Regular  Interest  LTA-IO7:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO7 shall be treated as related to Class I-LTB7 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO8:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO8 shall be treated as related to Class I-LTB8 REMIC I
Regular Interest.

               REMIC II Regular  Interest  LTA-IO9:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular  Interest LTA-IO9 shall be treated as related to Class I-LTB9 REMIC I
Regular Interest.

               REMIC II Regular Interest  LTA-IO10:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO10 shall be treated as related to Class I-LTB10 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO11:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO11 shall be treated as related to Class I-LTB11 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO12:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO12 shall be treated as related to Class I-LTB12 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO13:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO13 shall be treated as related to Class I-LTB13 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO14:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO14 shall be treated as related to Class I-LTB14 REMIC
I Regular Interest.

                                       49
<PAGE>

               REMIC II Regular Interest  LTA-IO15:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO15 shall be treated as related to Class I-LTB15 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO16:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO16 shall be treated as related to Class I-LTB16 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO17:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO17 shall be treated as related to Class I-LTB17 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO18:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO18 shall be treated as related to Class I-LTB18 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO19:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO19 shall be treated as related to Class I-LTB19 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO20:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO20 shall be treated as related to Class I-LTB20 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO21:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO21 shall be treated as related to Class I-LTB21 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO22:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO22 shall be treated as related to Class I-LTB22 REMIC
I Regular Interest.

                                       50
<PAGE>

               REMIC II Regular Interest  LTA-IO23:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO23 shall be treated as related to Class I-LTB23 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO24:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO24 shall be treated as related to Class I-LTB24 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO25:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO25 shall be treated as related to Class I-LTB25 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO26:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO26 shall be treated as related to Class I-LTB26 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO27:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO27 shall be treated as related to Class I-LTB27 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO28:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO28 shall be treated as related to Class I-LTB28 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO29:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO29 shall be treated as related to Class I-LTB29 REMIC
I Regular Interest.

               REMIC II Regular Interest  LTA-IO30:  A regular interest in REMIC
II,  held as an asset of REMIC  III,  that has a  notional  amount  equal to the
related Uncertificated Notional Amount, that bears interest at the related REMIC
II Remittance Rate, and that has such other terms as are described herein. REMIC
II Regular Interest  LTA-IO30 shall be treated as related to Class I-LTB30 REMIC
I Regular Interest.

                                       51
<PAGE>

               REMIC  III:  The  segregated   pool  of  assets  subject  hereto,
constituting   a  portion  of  the  primary  trust  created  hereby  and  to  be
administered hereunder, with respect to which a separate REMIC election is to be
made, consisting of the REMIC II Regular Interests.

               REMIC  III  Liquidation  Loss  Amounts:   On  any  Payment  Date,
Liquidation  Loss Amounts for the related  Collection  Period shall be allocated
first to the REMIC III Regular  Interest  SB-IO in  reduction of the accrued and
unpaid  interest  thereon until such accrued and unpaid interest shall have been
reduced to zero,  second to the REMIC III Regular Interest SB-PO in reduction of
the Class Principal  Balance  thereof until such Class  Principal  Balance shall
have been  reduced to zero and third to the Class A-I Notes to the same  extent,
if any, that (i) amounts  interest accrued on such Notes since the prior Payment
Date  remain  unpaid  after  distributions  on such  Payment  Date  and (ii) the
aggregate  of the Class  Principal  Balances  of the  Class A-I Notes  following
distributions on such Payment Date exceed the aggregate principal balance of the
Group I Loans by more than  such  excess,  if any,  after  distributions  on the
immediately prior Payment Date.

               REMIC III Regular Interest SB-IO: A regular interest in REMIC III
with no  entitlement  to  principal  and  entitled  to interest at the REMIC III
Regular Interest SB-IO Certificate Rate on the Class SB-IO Notional Amount.

               REMIC III Regular Interest SB-PO: A regular interest in REMIC III
with no  entitlement to interest and entitled to principal in an amount equal to
the initial  principal balance of the Class SB-I Certificates and any amounts in
the nature of  prepayment  charges  received  in  connection  with Loan Group I,
provided  that any payment of  prepayment  charges shall not be deemed to reduce
the principal balance of the REMIC III Regular Interest SB-PO.

               REMIC III Regular Interests:  Each Class of the Class I Notes and
the REMIC III Regular Interests SB-IO and SB-PO.

               REMIC III Remittance  Rate: With respect to each Class of Class I
Notes,  the Note Rate for such  Class.  With  respect  to the REMIC III  Regular
Interest  SB-PO,  0% per annum.  With respect to the REMIC III Regular  Interest
SB-IO the Certificate Rate therefor.

               REMIC  Provisions:  Provisions  of the  federal  income  tax  law
relating to real estate mortgage investment  conduits,  which appear at Sections
860A  through  860G of  Subchapter  M of  Chapter  1 of the  Code,  and  related
provisions,  and  temporary  and  final  regulations  (or,  to  the  extent  not
inconsistent with such temporary or final regulations, proposed regulations) and
published  rulings,  notices and announcements  promulgated  thereunder,  as the
foregoing may be in effect from time to time.

     REO: A Mortgaged  Property that is acquired by the Trust in  foreclosure or
by deed in lieu of foreclosure.

                                       52
<PAGE>

               REO Acquisition: The acquisition by the Master Servicer on behalf
of the Trustee for the benefit of the  Noteholders of any REO Property  pursuant
to Section 3.07 of the Servicing Agreement.

               REO Disposition:  As to any REO Property,  a determination by the
Master  Servicer  that it has received  substantially  all  Insurance  Proceeds,
Liquidation Proceeds,  REO Proceeds and other payments and recoveries (including
proceeds  of a final  sale)  which the  Master  Servicer  expects  to be finally
recoverable from the sale or other disposition of the REO Property.

               REO Proceeds:  Proceeds, net of expenses,  received in respect of
any REO Property (including, without limitation, proceeds from the rental of the
related Mortgaged Property) which proceeds are required to be deposited into the
Custodial  Account only upon the related REO Disposition,  including any amounts
received by the Master Servicer as a recovery subsequent to the deeming of a REO
Disposition as set forth in Section 3.13.

               REO  Property:  A  Mortgaged  Property  acquired  by  the  Master
Servicer through foreclosure or deed in lieu of foreclosure in connection with a
defaulted Home Equity Loan.

               Repurchase  Event:  With respect to any Home Equity Loan,  either
(i) a discovery  that,  as of the Closing Date,  the related  Mortgage was not a
valid lien on the related Mortgaged Property subject only to (A) the lien of any
prior mortgage indicated on the Home Equity Loan Schedule,  (B) the lien of real
property  taxes  and  assessments  not  yet  due  and  payable,  (C)  covenants,
conditions,  and  restrictions,  rights of way,  easements  and other matters of
public  record  as of the date of  recording  of such  Mortgage  and such  other
permissible  title  exceptions  as are listed in the Program Guide and (D) other
matters to which like  properties  are commonly  subject which do not materially
adversely  affect the value,  use,  enjoyment  or  marketability  of the related
Mortgaged  Property or (ii) with respect to any Home Equity Loan as to which the
Seller delivers a Lost Note Affidavit,  a subsequent default on such Home Equity
Loan if the  enforcement  thereof or of the related  Mortgage is materially  and
adversely affected by the absence of such original Loan Agreement.

               Repurchase  Price:  With respect to any Home Equity Loan required
to be repurchased on any date pursuant to the Purchase Agreement or purchased by
the Master Servicer pursuant to the Servicing Agreement,  an amount equal to the
sum of (i) 100% of the Loan Balance thereof  (without  reduction for any amounts
charged off) and (ii) unpaid accrued  interest at the Loan Rate (or with respect
to the last day of the month in the month of  repurchase,  the Loan Rate will be
the Loan  Rate in  effect  as to the  second  to last day in such  month) on the
outstanding  principal  balance  thereof from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month  following the month of
purchase.  No portion of any Repurchase  Price shall be included in any Excluded
Amount for any Payment Date.

     Request  for  Release:  The form  attached  as  Exhibit 4 to the  Custodial
Agreement or an electronic request in a form acceptable to the Custodian.

               Required Insurance Policy:  With respect to any Home Equity Loan,
any insurance  policy which is required to be maintained from time to time under
the Servicing Agreement, the Program Guide or the related Subservicing Agreement
in respect of such Home Equity Loan.

                                       53
<PAGE>

               Responsible  Officer:  With respect to the Indenture Trustee, any
officer  of  the   Indenture   Trustee  with  direct   responsibility   for  the
administration  of the Indenture and also, with respect to a particular  matter,
any other  officer to whom such  matter is  referred  because of such  officer's
knowledge of and familiarity with the particular subject.

     Revolving  Period:  The period commencing on the Closing Date and ending on
September 30, 2007.

     Securities  Act: The Securities Act of 1933, as amended,  and the rules and
regulations promulgated thereunder.

               Security:  Any of the Certificates or Notes.

               Security Balance: With respect to any Payment Date and each Class
of Term Notes,  the Initial  Security Balance thereof prior to such Payment Date
reduced by all payments of principal  thereon prior to such Payment  Date.  With
respect to any Payment Date and the Variable Funding Notes, the Initial Security
Balance  thereof  prior to such  Payment  Date (i)  increased  by the  Aggregate
Additional Balance Differential for such Variable Funding Note immediately prior
to such Payment  Date and (ii) reduced by all payments of principal  thereon and
Liquidation  Loss Amounts  allocated  thereto prior to such Payment  Date.  With
respect to any Payment  Date and the  Certificates,  the  Certificate  Principal
Balance thereof.

               Securityholder or Holder:  Any Noteholder or a Certificateholder.

     Seller:  Residential Funding Corporation,  a Delaware corporation,  and its
successors and assigns.

     Seller's Agreement: The agreement between the Seller, as purchaser, and the
related Program Seller, as seller.

     Servicing Agreement: The Servicing Agreement, dated as of the Closing Date,
between the Indenture  Trustee,  the Issuer and the Master  Servicer,  as master
servicer.

     Servicing  Certificate:  A certificate  prepared by a Servicing  Officer on
behalf of the Master  Servicer in accordance  with Section 4.01 of the Servicing
Agreement.

     Servicing  Default:  The meaning specified in Section 7.01 of the Servicing
Agreement.

     Servicing Fee: With respect to any Home Equity Loan, the sum of the related
Master Servicing Fee and the related Subservicing Fee.

     Servicing  Fee Rate:  With respect to any Home Equity Loan,  the sum of the
related Master Servicing Fee Rate and the related Subservicing Fee Rate.

                                       54
<PAGE>

               Servicing  Officer:  Any officer of the Master Servicer  involved
in, or  responsible  for, the  administration  and  servicing of the Home Equity
Loans whose name and specimen  signature appear on a list of servicing  officers
furnished to the Indenture  Trustee (with a copy to the Credit  Enhancer) by the
Master Servicer, as such list may be amended from time to time.

     Single  Certificate:  A Certificate  in the  denomination  of a Certificate
Percentage Interest of 10.0000%.

               Special Hazard Amount:  With respect to the Group I Loans,  as of
any date of determination  following the Cut-off Date, the Special Hazard Amount
shall equal $2,250,003 less the sum of (A) the aggregate of any Liquidation Loss
Amounts on the Group I Loans due to Special Hazard Losses and (B) the Adjustment
Amount (as defined below) as most recently  calculated.  For each anniversary of
the Cut-off Date, the Adjustment Amount shall be equal to the amount, if any, by
which the amount  calculated in accordance with the preceding  sentence (without
giving effect to the deduction of the  Adjustment  Amount for such  anniversary)
exceeds the greater of (A) the greatest of (i) twice the  outstanding  principal
balance of the Group I Loan which has the largest outstanding  principal balance
on the Payment Date immediately preceding such anniversary,  (ii) the product of
1.00%  multiplied by the outstanding  principal  balance of all Group I Loans on
the Payment Date immediately  preceding such anniversary and (iii) the aggregate
outstanding  principal balance (as of the immediately preceding Payment Date) of
the Mortgage  Loans in any single  five-digit  California zip code area with the
largest  amount  of  Group I Loans by  aggregate  principal  balance  as of such
anniversary  and (B)  the  greater  of (i) the  product  of the  Special  Hazard
Percentage for such anniversary  multiplied by the outstanding principal balance
of all  the  Group  I Loans  on the  Payment  Date  immediately  preceding  such
anniversary and (ii) twice the outstanding principal balance of the Group I Loan
which  has  the  largest  outstanding  principal  balance  on the  Payment  Date
immediately preceding such anniversary.

               With  respect  to  the  Group  II  Loans,   as  of  any  date  of
determination  following the Cut-off Date, the Special Hazard Amount shall equal
$2,050,000 less the sum of (A) the aggregate of any Liquidation  Loss Amounts on
the Group II Loans due to Special  Hazard Losses and (B) the  Adjustment  Amount
(as defined  below) as most recently  calculated.  For each  anniversary  of the
Cut-off Date,  the  Adjustment  Amount shall be equal to the amount,  if any, by
which the amount  calculated in accordance with the preceding  sentence (without
giving effect to the deduction of the  Adjustment  Amount for such  anniversary)
exceeds the greater of (A) the greatest of (i) twice the  outstanding  principal
balance of the HELOC which has the largest outstanding  principal balance on the
Payment Date immediately  preceding such anniversary,  (ii) the product of 1.00%
multiplied  by the  outstanding  aggregate  Credit  Limits of all  HELOCs on the
Payment Date  immediately  preceding  such  anniversary  and (iii) the aggregate
outstanding  principal balance (as of the immediately preceding Payment Date) of
the HELOCs in any single  five-digit  California  zip code area with the largest
amount of HELOCs by aggregate  principal  balance as of such anniversary and (B)
the  greater  of (i) the  product  of the  Special  Hazard  Percentage  for such
anniversary multiplied by the outstanding aggregate Credit Limits for all HELOCs
on the Payment Date  immediately  preceding such  anniversary and (ii) twice the
outstanding  principal  balance of the HELOCs which has the largest  outstanding
principal balance on the Payment Date immediately preceding such anniversary

                                       55
<PAGE>

               Special Hazard Loss: Any Liquidation Loss Amount not in excess of
the cost of the lesser of repair or replacement of a Mortgaged Property suffered
by such Mortgaged Property on account of direct physical loss,  exclusive of (i)
any  loss of a type  covered  by a hazard  policy  or a flood  insurance  policy
required to be  maintained  in respect of such  Mortgaged  Property  pursuant to
Section 3.04 of the Servicing Agreement,  except to the extent of the portion of
such loss not  covered  as a result of any  coinsurance  provision  and (ii) any
losses resulting from an Extraordinary Event.

               Special Hazard Percentage:  As of each anniversary of the Cut-off
Date,  the  greater  of (i) 1.0% and (ii) the  largest  percentage  obtained  by
dividing  the  aggregate   outstanding  principal  balance  (as  of  immediately
preceding  Payment  Date) of the Group I Loans or Group II Loans,  as applicable
secured by Mortgaged Properties located in a single, five-digit zip code area in
the State of California by the outstanding  principal balance of all the Group I
Loans or Group II Loans, as applicable,  as of the immediately preceding Payment
Date.

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

     Stated  Value:  With  respect  to any Home  Equity  Loan,  the value of the
Mortgaged Property as stated by the related Mortgagor in his or her application.

     Statutory  Trust  Statute:  Chapter 38 of Title 12 of the Delaware Code, 12
Del.  Codess.ss.3801  et seq.,  as the same may be amended from time to time.

     Subservicer:  Any Person with whom the Master  Servicer  has entered into a
Subservicing Agreement as a Subservicer by the Master Servicer.

     Subservicing  Account:  An Eligible Account  established or maintained by a
Subservicer as provided for in Section 3.02(c) of the Servicing Agreement.

               Subservicing  Agreement:  The written contract between the Master
Servicer and any Subservicer relating to servicing and administration of certain
Home Equity Loans as provided in Section 3.01 of the Servicing Agreement.

               Subservicing Fee: With respect to any Collection  Period, the fee
retained monthly by the Subservicer  (or, in the case of a  nonsubserviced  Home
Equity  Loan,  by  the  Master  Servicer)  equal  to  the  product  of  (i)  the
Subservicing  Fee Rate  divided by 12 and (ii) the Pool  Balance as of the first
day of such Collection Period.

     Subservicing  Fee Rate:  With respect to each Home Equity  Loan,  0.50% per
annum.

               Substitution  Adjustment  Amounts:  With  respect to any Eligible
Substitute  Loan and any Deleted Loan, the amount,  if any, as determined by the
Master Servicer,  by which the aggregate  principal balance of all such Eligible
Substitute  Loans  as of the date of  substitution  is less  than the  aggregate
principal balance of all such Deleted Loans (after  application of the principal
portion of the monthly payments due in the month of substitution  that are to be
distributed to the Payment Account in the month of substitution).

                                       56
<PAGE>

               Teaser Loan: Any HELOC which,  as of the Cut-off Date, has a Loan
Rate that is less than the sum of the Index at the time of origination  plus the
applicable Gross Margin.

               Telerate Screen Page 3750: The display designated as page 3750 on
the Moneyline  Telerate  Capital  Markets Reports (or (i) such other page as may
replace page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks) or (ii) if such service is no longer offered, such
other service for displaying LIBOR or comparable rates as may be selected by the
Indenture  Trustee after  consultation  with the Master  Servicer and the Credit
Enhancer.

               Term Notes: The Class I Notes and Class A-II Notes.

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

     Transfer Date: As defined in Section 3.15(c) of the Servicing Agreement.

     Transfer  Notice  Date:  As  defined in  Section  3.15(c) of the  Servicing
Agreement.

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

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

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

     Trust:  The Home Equity Loan Trust  2002-HS3 to be created  pursuant to the
Trust Agreement.

     Trust Agreement: The Amended and Restated Trust Agreement,  dated as of the
Closing Date, between the Owner Trustee and the Depositor.

     Trust  Estate:  The  meaning  specified  in  the  Granting  Clause  of  the
Indenture.

               Trust  Indenture Act or TIA: The Trust  Indenture Act of 1939, as
amended from time to time, as in effect on any relevant date.

     UCC:  The Uniform  Commercial  Code,  as amended  from time to time,  as in
effect in the States of New York, Delaware or Minnesota, as applicable.

               Uncertificated  Accrued  Interest:  With  respect  to any REMIC I
Regular Interest for any Payment Date, one month's interest at the related REMIC
I Remittance Rate for such Payment Date, accrued on the Uncertificated Principal
Balance immediately prior to such Payment Date.  Uncertificated Accrued Interest
for the REMIC I and REMIC II Regular  Interests  shall  accrue on the basis of a
360-day year consisting of twelve 30-day months. For purposes of calculating the

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amount of Uncertificated  Accrued Interest for the REMIC I Regular Interests for
any Payment Date,  any Prepayment  Interest  Shortfalls or Relief Act Shortfalls
relating to the Group I Loans for such Payment Date shall be allocated among the
LTA and LTB REMIC I Regular  Interests  pro rata based on, and to the extent of,
the  Uncertificated   Accrued  Interest  thereon,   as  calculated  without  the
application  of this  sentence.  For  purposes  of  calculating  the  amount  of
Uncertificated  Accrued  Interest  for the REMIC II  Regular  Interests  for any
Payment  Date,  any  Prepayment  Interest  Shortfalls  or Relief Act  Shortfalls
relating to the Group I Loans for such Payment Date shall be allocated among the
LT1, LT2, LT3, LT4 and LTA-IO REMIC I Regular Interests,  pro rata based on, and
to the  extent  of,  Uncertificated  Accrued  Interest,  as  calculated  without
application of this sentence. With respect to any Payment Date and the REMIC III
Regular Interest SB-IO, one month's interest at the related  Certificate Rate on
the Notional  Amount  thereof  reduced by its pro-rata  share of any  Prepayment
Interest  Shortfalls or Relief Act Shortfalls relating to the Group I Loans, but
not reduced by amounts distributable  pursuant to clauses (vi), (vii), (viii) or
(ix) of Section 3.05(a)(I) of the Indenture.

               Uncertificated  Notional  Amount:  With  respect to each REMIC II
Regular Interest LTA-IO, the amount defined in footnote (3) to the definition of
REMIC II Regular Interest.

               Uncertificated  Principal  Balance:  With  respect to any Payment
Date and any REMIC I Regular  Interest,  the Initial  Balance thereof reduced by
the  allocation to the principal  thereof on prior Payment Dates of  Liquidation
Loss Amounts  pursuant to the definition of REMIC I Liquidation Loss Amounts and
of amounts  deemed  distributed  with respect to the REMIC I Regular  Interests.
With respect to any Payment Date and any REMIC II Regular Interest,  the Initial
Balance  thereof  reduced by the  allocation to the  principal  thereof on prior
Payment Dates of Liquidation Loss Amounts pursuant to the definition of REMIC II
Liquidation  Loss Amounts and of amounts deemed  distributed with respect to the
REMIC II Regular  Interests.  With respect to any Payment Date and the REMIC III
Regular Interest SB-PO, the Initial Balance thereof reduced by the allocation to
the principal thereof on prior Payment Dates of Liquidation Loss Amounts, to the
extent such Liquidation Loss Amounts are allocated to the principal of the Class
SB-I Certificates, and amounts deemed distributed with respect to such REMIC III
Regular Interest.

     Uncertificated  Regular  Interests:  The REMIC I Regular  Interests and the
REMIC II Regular Interests.

     Underwriters:  Salomon Smith Barney Inc. and Residential Funding Securities
Corporation.

               Undercollateralization  Amount:  Initially equal to approximately
$2,499,965.  With respect to any Payment Date, the amount,  if any, by which the
aggregate  Security  Balance of the Class II Notes on such  Payment Date exceeds
the Pool  Balance  of the  Group  II  Loans  as of the  last day of the  related
Collection Period (after  application of Net Principal  Collections or Principal
Collections, as the case may be, for such date).

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               Uniform  Single  Attestation  Program for Mortgage  Bankers:  The
Uniform Single  Attestation  Program for Mortgage  Bankers,  as published by the
Mortgage  Bankers  Association  of America and effective  with respect to fiscal
periods ending on or after December 15, 1995.

               Uninsured  Cause:  Any cause of damage to  property  subject to a
Mortgage  such  that the  complete  restoration  of such  property  is not fully
reimbursable by the hazard insurance policies.

               United States Person: A citizen or resident of the United States,
a corporation, partnership or other entity created or organized in, or under the
laws of, the United  States,  any state  thereof,  or the  District  of Columbia
(except  in the  case of a  partnership,  to the  extent  provided  in  Treasury
regulations)  or  any  political  subdivision  thereof,  or an  estate  that  is
described in Section 7701(a)(30)(D) of the Code, or a trust that is described in
Section 7701(a)(30)(E) of the Code.

     Variable  Funding  Notes:  The Class II Notes  designated  as the "Variable
Funding Notes" in the Indenture including any Capped Funding Notes.

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