AMENDMENT NO. 1 TO POOLING AND SERVICING AGREEMENT

AMENDMENT NO. 1 TO

POOLING AND SERVICING AGREEMENT

among

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.,

as Depositor

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Trustee

and

EMC MORTGAGE CORPORATION

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.

Bear Stearns Mortgage Funding Trust 2006-AR1,

Mortgage Pass-Through Certificates, Series 2006-AR1

Dated as of August 25, 2006

This AMENDMENT NO. 1 is made and entered into as of this 25th day of August 2006 to that certain Pooling and Servicing Agreement (the “Agreement”), by and among Structured Asset Mortgage Investments II Inc., as depositor, Wells Fargo Bank, National Association, as trustee and EMC Mortgage Corporation, as sponsor.

SECTION 1. DEFINED TERMS . Unless otherwise amended by the terms of this Amendment No. 1, terms used in this Amendment No. 1 shall have the meanings assigned in the Agreement.

SECTION 2. AMENDMENT TO AGREEMENT. Pursuant to Section 11.02(a)(ii) of the Agreement, the Agreement is hereby amended effective as of the date of the Agreement as follows:

2.1            Article XI is hereby corrected by replacing the second subsection reference "(iv)" in Section 11.02(a) with "(vi)".

SECTION 3. FURTHER AMENDMENTS TO AGREEMENT. Pursuant to amended Section 11.02(a)(vi) of the Agreement, the Agreement is hereby amended effective as of the date of the Agreement as follows:

3.1            The defined term “Account” in Article I of the Agreement is hereby deleted and replaced in its entirety with the following (new language underlined and in bold):

Account : The Custodial Account, the Adjustable Rate Supplemental Fund, the Distribution Account, the Reserve Fund, the Final Maturity Reserve Account or the Class XP Reserve Account as the context may require.

Article I of the Agreement is hereby amended by adding the following defined term to Article I:

Adjustable Rate Supplemental Fund : An “outside reserve fund” within the meaning of Treasury Regulation 1.860G-2(h), which is not an asset of any REMIC and which is established and maintained pursuant to Section 4.05.

3.2            The defined term “Interest Funds” in Article I of the Agreement is hereby deleted and replaced in its entirety with the following (new language underlined and in bold):

Interest Funds : With respect to each Loan Group and any Distribution Date, (i) the sum, without duplication, of (a) all scheduled interest collected in respect to the related Mortgage Loans during the related Due Period less the related Servicing Fee and any related amounts to be reimbursed to EMC, the Servicer, the Trustee and the Custodian as provided herein, (b) all Monthly Advances relating to interest with respect to the related Mortgage Loans made on or prior to the related Distribution Account Deposit Date, (c) all Compensating Interest Payments with respect to the related Mortgage Loans and required to be remitted by the Servicer pursuant to this Agreement with respect to such Distribution Date, (d) Liquidation Proceeds with respect to the Mortgage Loans collected during the related Prepayment Period (or, in the case of

Subsequent Recoveries, during the related Due Period), to the extent such Liquidation Proceeds relate to interest, less all Nonrecoverable Advances relating to interest and certain expenses, in each case, with respect to the Mortgage Loans in the Related Loan Group, (e) all amounts relating to interest with respect to each Mortgage Loan in the related Loan Group purchased by the Depositor pursuant to Sections 2.02, 2.03 or 3.21 during the related Due Period less all Non-Recoverable Advances relating to interest, (f) all amounts in respect of interest paid by the Depositor pursuant to Section 10.01 allocated to the related Loan Group, in each case to the extent remitted by the Servicer to the Distribution Account pursuant to this Agreement , and (g) the amount of any Principal Prepayments in full, partial Principal Prepayments, Net Liquidation Proceeds, Repurchase Proceeds and scheduled principal payments, in that order, allocated to the related Loan Group, included in Available Funds for such Distribution Date that are applied in connection with any Deferred Interest in accordance with the definition of Net Deferred Interest to EMC, the Depositor, the Servicer or the Trustee, and (h) with respect to Loan Group I, any amounts deposited in the Adjustable Rate Supplemental Fund and available for distribution to the Group I Certificates on such Distribution Date in accordance with Section 4.05, minus (ii) all amounts required to be reimbursed pursuant to Sections 4.01, 4.03 , and 4.04 and 4.05 and allocated to the related Loan Group or as otherwise set forth in this Agreement.

3.3            Article II of the Agreement is hereby amended by the following clause to the end of subsection 2.01(a)(iv):

3.4            Article IV of the Agreement is hereby amended by adding a new Section 4.05 as follows:

(a)             No later than the initial Distribution Date, the Trustee shall establish and maintain, in trust for the benefit of the holders of the Group I Offered Certificates, a segregated trust account or sub-account of a trust account, which shall be titled “Adjustable Rate Supplemental Fund, Wells Fargo Bank, National Association, as Trustee for the benefit of holders of Structured Asset Mortgage Investments II Inc., Bear Stearns Mortgage Funding Trust 2006-AR1, Mortgage Pass-Through Certificates, Series 2006-AR1, Group I Offered Certificates” (the “Adjustable Rate Supplemental Fund”). The Adjustable Rate Supplemental Fund shall be an Eligible Account or a sub-account of an Eligible Account. No l