POOLING AND SERVICING AGREEMENT

 

 

DEUTSCHE ALT-A SECURITIES, INC.

Depositor

and

WELLS FARGO BANK, N.A.

Master Servicer and Securities Administrator

and

HSBC BANK USA, NATIONAL ASSOCIATION

Trustee

_____________________

POOLING AND SERVICING AGREEMENT

Dated as of October 1, 2006

_____________________

Mortgage Pass-Through Certificates

Series 2006-AR5

 

 

 

TABLE OF CONTENTS

ARTICLE I DEFINITIONS

 

Section 1.1

General Definitions and Group I Definitions.

14

Section 1.2

Group II Definitions

56

Section 1.3

Allocation of Certain Interest Shortfalls.

77

ARTICLE II CONVEYANCE OF TRUST FUND; ORIGINAL ISSUANCE OF

CERTIFICATES

 

Section 2.1

Conveyance of Trust Fund.

78

Section 2.2

Acceptance by Trustee.

79

Section 2.3

Repurchase or Substitution of Loans.

79

Section 2.4

Authentication and Delivery of Certificates; Designation of Certificates as REMIC

Regular and Residual Interests.

82

Section 2.5

Representations and Warranties of the Master Servicer.

82

Section 2.6

[Reserved].

84

Section 2.7

Establishment of the Trust.

84

Section 2.8

Purpose and Powers of the Trust.

84

ARTICLE III ADMINISTRATION AND SERVICING OF THE LOANS; ACCOUNTS

 

Section 3.1

Master Servicer.

85

Section 3.2

REMIC-Related Covenants.

86

Section 3.3

Monitoring of Servicers.

86

Section 3.4

Fidelity Bond.

87

Section 3.5

Power to Act; Procedures.

88

Section 3.6

Due-on-Sale Clauses; Assumption Agreements.

89

Section 3.7

Release of Mortgage Files.

89

Section 3.8

Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.

90

Section 3.9

Standard Hazard Insurance and Flood Insurance Policies.

90

Section 3.10

Presentment of Claims and Collection of Proceeds.

91

Section 3.11

Maintenance of the Primary Mortgage Insurance Policies.

91

Section 3.12

Trustee to Retain Possession of Certain Insurance Policies and Documents.

92

Section 3.13

Realization Upon Defaulted Loans.

92

Section 3.14

Compensation for the Master Servicer.

92

Section 3.15

REO Property.

93

Section 3.16

Annual Statement as to Compliance.

94

Section 3.17

Assessments of Compliance.

94

Section 3.18

Master Servicer and Securities Administrator Attestation Reports.

95

Section 3.19

Annual Certification.

96

Section 3.20

Intention of the Parties and Interpretation and Additional Information;  Notice.

97

Section 3.21

Obligation of the Master Servicer in Respect of Compensating Interest.

98

Section 3.22

Protected Accounts.

98

Section 3.23

Distribution Account.

99

Section 3.24

Permitted Withdrawals and Transfers from the Distribution Account.

100

Section 3.25

Reserve Fund.

102

Section 3.26

[Reserved].

103

Section 3.27

[Reserved].

103

Section 3.28

Prepayment Penalty Verification.

103

Section 3.29

Reports Filed with Securities and Exchange Commission.

104

Section 3.30

Special Servicing.

110

Section 3.31

Purchase of Delinquent Loans.

110

ARTICLE IV GROUP I—P AYMENTS TO CERTIFICATEHOLDERS;  ADVANCES;

STATEMENTS AND REPORTS

 

Section 4.1

Group I—Distributions to Certificateholders.

112

Section 4.2

Group I—Allocation of Realized Losses.

120

Section 4.3

Group I—Statements to Certificateholders.

121

Section 4.4

Group I—Advances.

123

Section 4.5

Group I—Compliance with Withholding Requirements.

124

Section 4.6

Group I—REMIC Distributions.

124

Section 4.7

Group I—Compliance with Withholding Requirements.

124

Section 4.8

Group I—Certificate Swap Account.

125

Section 4.9

Group I—Class I-A-1 Swap Account.

126

Section 4.10

Group I—Cap Account.

127

Section 4.11

Group I—Supplemental Interest Trust

127

ARTICLE V GROUP II—P AYMENTS TO CERTIFICATEHOLDERS;  ADVANCES;

STATEMENTS AND REPORTS

 

Section 5.1

Group II—Distributions to Certificateholders.

128

Section 5.2

Group II—Allocation Realized Losses.

133

Section 5.3

Group II—Reduction of Certificate Principal Balances on the Certificates.

134

Section 5.4

Group II—Compliance with Withholding Requirements.

135

Section 5.5

Group II—Distributions on the REMIC I Regular Interests.

135

Section 5.6

Group II—Statements to Certificateholders.

135

Section 5.7

Group II—Advances.

138

ARTICLE VI THE CERTIFICATES

 

Section 6.1

The Certificates.

139

Section 6.2

Certificates Issuable in Classes; Distributions of Principal and Interest; Authorized

Denominations.

139

Section 6.3

Registration of Transfer and Exchange of Certificates.

140

Section 6.4

Mutilated, Destroyed, Lost or Stolen Certificates.

145

Section 6.5

Persons Deemed Owners.

145

ARTICLE VII THE DEPOSITOR, MASTER SERVICER AND THE CREDIT RISK

MANAGER

 

Section 7.1

Liability of the Depositor and the Master Servicer.

146

Section 7.2

Merger or Consolidation of the Depositor or the Master Servicer.

146

Section 7.3

Limitation on Liability of the Depositor, the Master Servicer, the Servicers, the Securities

Administrator and Others.

146

Section 7.4

Limitation on Resignation of the Master Servicer.

147

Section 7.5

Assignment of Master Servicing.

147

Section 7.6

Rights of the Depositor in Respect of the Master Servicer.

148

Section 7.7

Duties of the Credit Risk Manager

148

Section 7.8

Limitation Upon Liability of the Credit Risk Manager.

149

Section 7.9

Removal of the Credit Risk Manager.

149

Section 7.10

Transfer of Servicing by the Seller of Certain Loans Serviced by GMAC; Special

Servicer.

149

ARTICLE VIII DEFAULT

 

Section 8.1

Master Servicer Events of Default.

152

Section 8.2

Trustee to Act; Appointment of Successor.

154

Section 8.3

Notification to Certificateholders.

155

Section 8.4

Waiver of Master Servicer Events of Default.

155

ARTICLE IX CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

 

Section 9.1

Duties of Trustee and Securities Administrator.

156

Section 9.2

Certain Matters Affecting Trustee and Securities Administrator.

157

Section 9.3

Trustee and Securities Administrator not Liable for Certificates or Loans.

159

Section 9.4

Trustee, Master Servicer and Securities Administrator May Own Certificates.

159

Section 9.5

Fees and Expenses of Trustee and Securities Administrator.

159

Section 9.6

Eligibility Requirements for Trustee and Securities Administrator.

160

Section 9.7

Resignation and Removal of Trustee and Securities Administrator.

161

Section 9.8

Successor Trustee or Securities Administrator.

162

Section 9.9

Merger or Consolidation of Trustee or Securities Administrator.

163

Section 9.10

Appointment of Co-Trustee or Separate Trustee.

163

Section 9.11

Appointment of Office or Agency.

164

Section 9.12

Representations and Warranties of the Trustee.

164

ARTICLE X TERMINATION

 

Section 10.1

Termination Upon Purchase or Liquidation of All Loans.

166

Section 10.2

Additional Termination Requirements.

168

ARTICLE XI REMIC PROVISIONS

 

Section 11.1

REMIC Administration.

169

Section 11.2

Prohibited Transactions and Activities.

172

Section 11.3

Indemnification.

172

ARTICLE XII MISCELLANEOUS PROVISIONS

 

Section 12.1

Amendment.

173

Section 12.2

Recordation of Agreement; Counterparts.

174

Section 12.3

Limitation on Rights of Certificateholders.

174

Section 12.4

Governing Law.

175

Section 12.5

Notices.

175

Section 12.6

Severability of Provisions.

176

Section 12.7

Notice to Rating Agencies.

176

Section 12.8

Article and Section References.

177

Section 12.9

Grant of Security Interest.

177

 

 

EXHIBITS

Exhibit A-1

-

Form of Class [I-A-1][I-A-2][I-A-3] [1-A-4] Certificates

Exhibit A-2

-

Form of Class [II-1A][II-2A][II-3A] Certificates

Exhibit A-3

-

Form of Class [II-X1] [II-X2] Certificates

Exhibit A-4

-

Form of Class [II-PO] Certificates

Exhibit A-5

-

Form of Class [II-AR] Certificates

Exhibit A-6

-

Form of Class [I-M-1][I-M-2][I-M-3][I-M-4][I-M-5]

[I-M-6][I-M-7][I-M-8] [I-M-9] [I-M-10] Certificates

Exhibit A-7

-

Form of Class [II-M] [II-B-1] [II-B-2][II-B-3][II-B-4]

[II-B-5] Certificates

Exhibit A-8

-

Form of Class I-CE Certificates

Exhibit A-9

-

Form of Class I-P Certificates

Exhibit A-10

-

Form of Class I-R Certificates

Exhibit B

-

[Reserved]

Exhibit C

-

Form of Transfer Affidavit

Exhibit D

-

Form of Transferor Certificate

Exhibit E

-

Form of Investment Letter (Non-Rule 144A)

Exhibit F

-

Form of Rule 144A Investment Letter

Exhibit G

-

[Reserved]

Exhibit H

-

[Reserved]

Exhibit I

-

[Reserved]

Exhibit J

-

Mortgage Loan Purchase Agreement between the Depositor and the Seller

Exhibit K-1

-

Additional Form 10-D Disclosure

Exhibit K-2

-

Additional Form 10-K Disclosure

Exhibit K-3

-

Form 8-K Disclosure Information

Exhibit L

-

Form of Servicer Certification

Exhibit M

-

Servicing Criteria

Exhibit N

-

Additional Disclosure Notification

Exhibit O

-

ERISA Representation Letter

Exhibit P

-

Form of Certificate Swap Agreement

Exhibit Q

-

Form of Class I-A-1 Swap Agreement

Exhibit R

-

Form of Cap Agreement

 

Schedule One

-

Loan Schedule

Schedule Two

-

Prepayment Charge Schedule

Schedule Three

-

[Reserved]

Schedule Four

-

Cap Agreement Schedule

Schedule Five

-

Trust Prepayment Charge Schedule

 

This Pooling and Servicing Agreement, dated and effective as of October 1, 2006 (this “Agreement”), is executed by and among Deutsche Alt-A Securities, Inc., as depositor (the “Depositor”), Wells Fargo Bank, N.A., as master servicer (the “Master Servicer”) and as securities administrator (the “Securities Administrator”), and HSBC Bank USA, National Association, as trustee (the “Trustee”).  Capitalized terms used in this Agreement and not otherwise defined have the meanings ascribed to such terms in Article I hereof.

PRELIMINARY STATEMENT

The Trustee shall elect that each of REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V, and REMIC VI be treated as a REMIC under Section 860D of the Code.  Any inconsistencies or ambiguities in this Agreement or in the administration of this Agreement shall be resolved in a manner that preserves the validity of such REMIC elections.  Each of REMIC I, REMIC II, REMIC III, and REMIC IV (each a “Group I REMIC”) shall relate to Group I, and each of REMIC V and REMIC VI (each a “Group II REMIC”) shall relate to Group II.  The assets of REMIC I shall include the portion of the Trust Fund related to Group I (other than the Reserve Fund, the Cap Account and both Swap Accounts).  The REMIC I Regular Interests shall constitute the assets of REMIC II.  The REMIC II Regular Interests shall constitute the assets of REMIC III.  The REMIC III Regular Interests shall constitute the assets of REMIC IV (the “Group I Master REMIC”).  The Class I-R Certificate shall represent ownership of the sole class of residual interest in each Group I REMIC formed hereby.  The assets of REMIC V shall include the portion of the Trust Fund related to Group II.  The REMIC V Regular Interests shall constitute the assets of REMIC VI (the “Group II Master REMIC”).  The Class II-R Certificate shall represent ownership of the sole class of residual interest in each Group II REMIC formed hereby. For purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each regular interest created hereby shall be the 36th month following the latest maturity date of any Loan held in the Trust on the Closing Date.

REMIC I:

The following table sets forth the designations, principal balances, and interest rates for each interest in REMIC I, each of which (other than the R-I interest) is hereby designated as a regular interest in REMIC I (the “REMIC I Regular Interests”):

___________________

(1)

The interest rate with respect to any Distribution Date (and the related Interest Accrual Period) for the T1-A Interest is a per annum rate equal to the weighted average of the Group I Loans (the “REMIC I Net WAC Rate”).

(2)

The interest rate with respect to any Distribution Date (and the related Interest Accrual Period) for this interest is a per annum rate equal to the lesser of (i) the Certificate Swap Rate, and (ii) the product of (a) the REMIC I Net WAC Rate and (b) 2.

(3)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these Lower Tier Interests shall be the excess, if any, of (i) the product of (a) the REMIC I Net WAC Rate and (b) 2, over (ii) the Certificate Swap Rate.

(4)

This interest shall have an initial principal balance equal to the excess of (i) the aggregate initial principal balance of the Group I Loans over (ii) the aggregate initial principal balance of all remaining REMIC I Regular Interests.

(5)

The R-I interest shall not have a principal balance and shall not bear interest.  The R-I interest is hereby designated as the sole class of residual interest in REMIC I.  

(6)

This interest shall also be entitled to all Trust Prepayment Charges received in respect of the Group I Loans.

 

 

On each Distribution Date, interest shall be allocated with respect to the interests in REMIC I based on the above-described interest rates.

On each Distribution Date, all Realized Losses and all payments of principal with respect to the Group I Loans shall be allocated in the following order of priority:

(a)

First, to the T1-A interest until the outstanding principal balance of such interest is reduced to zero, and

(b)

Second, sequentially, to the other REMIC I Regular Interests in ascending order of their numerical designation, and, with respect to each pair of REMIC I Regular Interests having the same numerical designation, in equal amounts to each such REMIC I Regular Interest, until the principal balance of each is reduced to zero.

REMIC II:

The following table sets forth the designations, principal balances, and interest rates for each interest in REMIC II, each of which (other than the R-II interest) is hereby designated as a regular interest in REMIC II (the “REMIC II Regular Interests”):

___________________

(1)

The interest rate (the “REMIC II Net WAC Rate”) with respect to any Distribution Date (and the related Interest Accrual Period) for the T2-A Interest is a per annum rate equal to the weighted average of the interest rates of the regular interests in REMIC I provided , however , that for any Distribution Date on which the Class T1-IO Interest is entitled to a portion of the interest accruals on a REMIC I Regular Interest having an “F” in its class designation, as described in footnote seven below, such weighted average shall be computed by first subjecting the rate on such REMIC II interest to a cap equal to the product of the interest rate used to compute the Net Swap Payment for the Certificate Swap Agreement adjusted to reflect the day count convention used for such interest rate (“Certificate Swap LIBOR”) for such Distribution Date and 2.

(2)

The interest rate with respect to any Distribution Date (and the related Interest Accrual Period) for this interest is a per annum rate equal to the lesser of (i) the Class I-A-1 Swap Rate, and (ii) the product of (a) the REMIC II Net WAC Rate and (b) 2.

(3)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these Lower Tier Interests shall be the excess, if any, of (i) the product of (a) the REMIC II Net WAC Rate and (b) 2, over (ii) the Class I-A-1 Swap Rate.

(4)

This interest shall have an initial principal balance equal to the excess of (i) the aggregate initial principal balance of the REMIC I Regular Interests over (ii) the aggregate initial principal balance of all remaining REMIC II Regular Interests.

(5)

The R-II interest shall not have a principal balance and shall not bear interest.  The R-II interest is hereby designated as the sole class of residual interest in REMIC II.  

(6)

This interest shall also be entitled to all Trust Prepayment Charges received in respect of the Loans.

(7)

The Class T2-IO is an interest only class that does not have a principal balance.  For only those Distribution Dates listed in the first column in the table below, the Class T2-IO shall be entitled to interest accrued on the REMIC I Regular Interest listed in  the second column in the table below at a per annum rate equal to the excess, if any, of (i) the interest rate for such REMIC I Regular Interest for such Distribution Date over (ii) Certificate Swap LIBOR for such Distribution Date.

 

On each Distribution Date, interest shall be allocated with respect to the interests in REMIC II based on the above-described interest rates.

On each Distribution Date, distributions of principal on the interests in REMIC II shall be allocated in the following order of priority:

(a)

First, to the T2-F1 and T2-V1 interests, in equal amounts, until their aggregate principal balance equals the Principal Balance of the Class I-A-1 Certificate, and

(b)

Second, to the T2-A interest until the outstanding principal balance of such interest is reduced to zero.

REMIC III:

The following table sets forth the designations, principal balances, and interest rates for each interest in REMIC III, each of which (other than the R-III interest) is hereby designated as a regular interest in REMIC III (the “REMIC III Regular Interests”):

____________________

(1)

The interest rate for each of these interests (the “REMIC Maximum Rate”) with respect to any Distribution Date (and the related Interest Accrual Period) is a per annum rate equal to the weighted average of the interest rates on the REMIC II Regular Interests (other than any interest-only regular interest), provided , however , that for any Distribution Date on which the Class T3-AIO Interest is entitled to a portion of the interest accruals on the T2-F1 interest, such weighted average shall be computed by first subjecting the rate on such REMIC II interest to a cap equal to the product of the interest rate used to compute the Net Swap Payment for the Class I-A-1 Swap Agreement adjusted to reflect the day count convention used for such interest rate (“Class I-A-1 Swap LIBOR”) for such Distribution Date and 2.

(2)

The Class T3-AIO is an interest only class that does not have a principal balance.  For each Distribution Date on which the Class I-A-1 Certificates are outstanding, the Class T3-AIO shall be entitled to interest accrued on the T2-F1 interest at a per annum rate equal to the excess, if any, of (i) the interest rate for such REMIC II Regular Interest for such Distribution Date over (ii) the product of the Class I-A-1 Swap LIBOR for such Distribution Date, and 2.

(3)

This interest shall be an interest-only interest.  This interest shall be entitled to receive all interest that accrues on the T2-IO interest.

(4)

The R-III interest shall not have a principal amount and shall not bear interest.  The R-III interest is hereby designated as the sole class of residual interest in REMIC III.

(5)

This interest is a REMIC III Accretion Directed Class.

(6)

This interest shall have an initial principal balance equal to one-half of the initial Certificate Principal Balance of its Corresponding Class of Certificates.

(7)

This interest shall have an initial principal balance equal to the excess of (i) the aggregate initial principal balance of the REMIC II Regular Interests over (ii) the aggregate initial principal balance of the REMIC III Accretion Directed Classes.

(8)

This interest shall also be entitled to all Trust Prepayment Charges received in respect of the Loans.

On each Distribution Date, interest shall be allocated with respect to the interests in REMIC III based on the above-described interest rates, provided however, that interest that accrues on the T3-Accrual Interest shall be deferred to the extent necessary to make the distributions of principal described below.  Any interest so deferred shall itself bear interest at the interest rate for the T3-Accrual Interest.    

On each Distribution Date the principal distributed on the interests in REMIC II (together with an amount equal to the interest deferred on the T3-Accrual Interest for such Distribution Date) shall be distributed, and Realized Losses shall be allocated, among the interests in REMIC III in the following order of priority:

(a)

First, to each interest in REMIC III having a Corresponding Class in REMIC IV until the outstanding principal amount of each such interest equals one-half of the outstanding principal amount of such Corresponding Class for such interest immediately after such Distribution Date; and

(b)

Second, to the T3-Accrual Interest, any remaining amounts.

REMIC IV:

The following table sets forth characteristics of the interests in the Master REMIC, each of which, except for the Class I-R-IV interest, is hereby designated as a “regular interest” in REMIC IV (the “REMIC IV Regular Interests”):

____________________

(1)

This interest shall have an initial principal balance equal to the Initial Certificate Principal Balance of its Corresponding Class of Certificates.

(2)

The T4-X interest has a notional balance equal to the aggregate initial principal balance of the REMIC III Regular Interests.  The interest rate of the T4-X interest shall be a rate sufficient to cause all net interest from the Loans to accrue on the T4-X interest that is in excess of the total amount of interest that accrues on each other regular interest in REMIC IV.  For any Distribution Date, the interest rate in respect of the T4-X interest shall be the excess of: (i) the weighted average interest rate of all interests in REMIC III (other than any interest-only regular interest) over (ii) the product of: (A) two and (B) the weighted average interest rate of the REMIC III Accretion Directed Classes and the T3-Accrual Interest, where the T3-Accrual Interest is subject to a cap equal to zero and each REMIC III Accretion Directed Class is subject to a cap equal to the Pass-Through Rate on its Corresponding Class of Certificates, provided that, for purposes of determining the Pass-Through Rate, (i) the REMIC Maximum Rate shall be substituted for the Net WAC Pass-Through Rate in the definition thereof and (ii) the margin of the Pass-Through Rate of the Class I-A-1 Certificates shall be computed as if the Swap Agreement had been terminated.  The T4-X interest shall also be entitled to principal equal to the excess of the sum of the aggregate Principal Balance of the Loans as of the Cut-off Date over the aggregate Initial Certificate Principal Balance of the other Certificates the Closing Date.  Such principal balance shall not bear interest.  In addition, the T4-X interest shall be entitled to receive interest accrued on the Class T3-I-A-1 interest at a per annum rate equal to 0.06% per annum on or before the first Optional Termination Date and 0.12% thereafter.  Finally, the T4-X Interest shall be entitled to receive all amounts payable on the T3-IO and T3-AIO interests.

(3)

This interest shall bear interest at the Pass-Through Rate for its Corresponding Class of Certificates, provided that, for purposes of determining the Pass-Through Rate, the REMIC Maximum Rate shall be substituted for the Net WAC Pass-Through Rate in the definition thereof and, in the case of the Class I-A-1 Certificates, such rate shall be determined as if the Swap Agreement had been terminated.

(4)

The T4-I-P interest shall not be entitled to payments of interest, but shall be entitled to receive all Trust Prepayment Charges in respect of the Loans.  

(5)

REMIC IV shall also issue the R-IV interest, which shall not have a principal amount and shall not bear interest.  The R-IV interest is hereby designated as the sole class of residual interest in REMIC IV.

(6)

For purposes of the REMIC Provisions, the Class of Certificates corresponding to an interest in the Group I Master REMIC shall represent beneficial ownership of such interest in the Group I Master REMIC.  Any amount distributed on a Corresponding Class of Certificates on any Distribution Date in excess of the amount distributable on each interest in the Group I Master REMIC corresponding to such Class of Certificates shall be treated as having been paid from the Reserve Fund or the Supplemental Interest Trust, as applicable, and any amount distributable on each interest in the Group I Master REMIC corresponding to such Class of Certificates on such Distribution Date in excess of the amount distributable on that Class of Certificates on such Distribution Date shall be treated as having been paid to the Supplemental Interest Trust, all pursuant to and as further provided in Section 11.1(l) hereof.

On each Distribution Date, interest shall be allocated with respect to the interests in REMIC IV based on the above-described interest rates.

On each Distribution Date, the principal distributed on the REMIC III interests  shall be distributed, and Realized Losses shall be allocated, among the interests in REMIC IV in an amount equal to the principal distributions and Realized Loss allocations for such Distribution Date with respect to the Corresponding Class of Certificates related to such interests, determined without regard to either Swap Agreement.

REMIC V:

The following table sets forth the designations, principal balances, and interest rates for each interest in REMIC V, each of which (other than the R-I interest) is hereby designated as a regular interest in REMIC V (the “REMIC V Regular Interests”):

 

(1)

Each Interest with “A” in its designation shall have a principal balance initially equal to 0.9% of the Subordinate Component of its corresponding Loan Subgroup.  Each Interest with “B” in its designation shall have a principal balance initially equal to 0.1% of the Subordinate Component of  its corresponding Loan Subgroup.   The initial principal balance of each interest with “C” in its designation shall equal the excess of the Principal Balance of its corresponding Loan Subgroup over the sum of (i) the initial principal balances of the interests with “A” or “B” in their designations corresponding to such Loan Subgroup, and (ii) the portion of the T5-PO Interest attributable to the Discount Loans in the Loan Subgroup corresponding to such interest.

(2)

This interest shall not have any principal balance.

(3)

This interest shall be entitled to receive all interest accrued at the related Stripped Interest Rate on each Subgroup II-1 or Subgroup II-3 Non-Discount Mortgage Loan.

(4)

This interest shall be entitled to receive all interest accrued at the related Stripped Interest Rate on each Subgroup II-2 Non-Discount Mortgage Loan.

(5)

The T5-PO Interest shall have an initial principal balance equal to the initial balance of the Class PO Certificate.

(6)

The R-V interest shall not have a principal balance and shall not bear interest.  The R-V interest is hereby designated as the sole class of residual interest in REMIC V.  

 

(7)

This interest shall also be entitled to all Trust Prepayment Charges received in respect of the Loans in the related Subgroup.

 

Unless a Cross-over Situation (as defined below) exists, principal and Realized Losses arising with respect to each Loan Subgroup shall be allocated first to cause the interests with “A” and “B” in their designations corresponding to such loan Subgroup to equal 0.9% and 0.1% of the Subordinate Component of such Loan Subgroup as of such Distribution Date and all excess principal and Realized Losses shall be allocated to the interest with “C” in its designation corresponding to such Loan Subgroup.  An interest with “A”, “B”, or “C” in its designation that is allocated principal on any Distribution Date shall receive such principal, and have its principal balance reduced by the amount of such principal, on such Distribution Date.  Similarly, an interest with “A”, “B”, or “C” in its designation that is allocated a Realized Loss on any Distribution Date shall have its principal balance reduced by the amount of such Realized Loss on such Distribution Date.

A “Cross-over Situation” exists if on any Distribution Date (after taking into account distributions of principal and allocations of Realized Losses on such Distribution Date) the interests with “A” or “B” in their designation corresponding to any Loan Subgroup are in the aggregate less than 1% of the Subordinate Component of the Loan Subgroups to which they correspond.  In the event that a Cross-Over Situation exists on any Distribution Date, and the weighted average rate of the outstanding interests with “A” or “B” in their designation related to a Class of Group II Subordinate Certificates is less than the Pass-Through Rate for such class of Group II Subordinate Certificates, a Principal Relocation Payment (as defined below) shall be made proportionately to such outstanding interests with “A” in their prior to any other distributions of principal from each such Loan Subgroup.  In the event that a Cross-Over Situation exists on any Distribution Date, and the weighted average rate of the outstanding interests with “A” and “B” in their designation related to a Class of Group II Subordinate Certificates is greater than the Pass-Through Rate for such class of Group II Subordinate Certificates, a Principal Relocation Payment shall be made proportionately to such outstanding interests with “B” in its designation prior to any other distributions of principal from each such Loan Subgroup.  A “Principal Relocation Payment” is a distribution of principal that causes the Calculation Rate (as defined below) on the outstanding interest with “A” or “B” in its designation related to a Class of Group II Subordinate Certificates to equal the Pass-Through Rate for such class of Group II Subordinate Certificates.  The “Calculation Rate” shall equal the product of (i) 10 and (ii) the weighted average rate of the outstanding interests with “A” or “B” in their designations related to a Class of Group II Subordinate Certificates, treating each interest with “A” in its designation as capped at zero or reduced by a fixed percentage of 100% of the interest accruing on such class.  Principal Relocation Payments shall be made from principal received on the Loans from the related Loan Subgroup and shall also consist of a proportionate allocation of Realized Losses from the Loans of the related Loan Subgroup.  For purposes of making Principal Relocation Payments, to the extent that the principal received during the Collection Period from the related Loan Subgroup and Realized Losses are insufficient to make the necessary reduction of principal, then interest shall accrue on the interest with “C” in its designation related to a Loan Subgroup (and be added to their principal balances) that are not receiving a Principal Relocation Payment to allow the necessary Principal Relocation Payment to be made.

If a Cross-Over Situation exists, the outstanding aggregate principal balance of the related interests with “A” or “B” in their designations shall not be reduced below one percent of the aggregate principal balance of the related Loan Subgroup as of the end of any Collection Period in excess of the Group II Senior Certificates related to such Loan Subgroup as of the related Distribution Date (after taking into account distributions of principal and allocations of Realized Losses on such Distribution Date).  To the extent this limitation prevents the distribution of principal to the interests with “A” or “B” in their designations of a Loan Subgroup and the related interest with “C” in its designation has already been reduced to zero, such excess principal from the other Loan Subgroups shall be paid proportionately to the interests with “C” in their designation of the Loan Subgroups whose aggregate interests with “A” or “B” in their designations are less than one percent of the Group II Subordinate Principal Amount for the related Loan Subgroup.  Any such shortfall as a result of the Loan Subgroups receiving the extra payment having a Ratio-strip Rate (as defined below) lower than the weighted average Ratio-strip Rate of the Loan Subgroup from which the payment was relocated shall be treated as a Realized Loss and if excess arises as a result of the Loan Subgroup receiving the extra payment having a Ratio-strip Rate higher than the Loan Subgroup from which the payment was relocated it shall reimburse REMIC V for prior Realized Losses.  The “Ratio-strip Rate” for each Loan Subgroup shall be equal to 6.000% for Loan Subgroups II-1 and II-3 and 5.500% for Loan Subgroup II-2.

The Class T5-PO interest shall be entitled to receive the Discount Fractional Principal Amount for each Loan Subgroup.

REMIC VI:

The following table sets forth characteristics of the interests in the Master REMIC, each of which, except for the Class II-R-VI interest, is hereby designated as a “regular interest” in REMIC VI (the “REMIC VI Regular Interests”):

____________________

(1)

This interest shall have an initial principal balance equal to the Initial Certificate Principal Balance of its Corresponding Class of Certificates.

(2)

This interest shall bear interest at the Pass-Through Rate for its Corresponding Class of Certificates.

(3)

The T6-II-P interest shall not be entitled to payments of interest, but shall be entitled to receive all Trust Prepayment Charges in respect of the Loans in Group II.  

(4)

REMIC VI shall also issue the R-IV interest, which shall not have a principal amount and shall not bear interest.  The R-VI interest is hereby designated as the sole class of residual interest in REMIC VI.

(5)

For purposes of the REMIC Provisions, the Class of Certificates corresponding to an interest in the Group II Master REMIC shall represent beneficial ownership of such interest in the Group II Master REMIC.  

On each Distribution Date, interest shall be allocated with respect to the interests in REMIC VI based on the above-described interest rates.

On each Distribution Date, the principal distributed on the REMIC V interests  shall be distributed, and Realized Losses shall be allocated, among the interests in REMIC VI in an amount equal to the principal distributions and Realized Loss allocations for such Distribution Date with respect to the Corresponding Class of Certificates related to such interests.

 

 

The Certificates:

The following table irrevocably sets forth the designations, initial Certificate Principal Balance or Notional Amount and Pass-Through Rate for each Class of Certificates:  

___________________

(1)

Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the 36 ^th month following the maturity date for the Loan held in the Trust on the Closing Date with the latest maturity date has been designated as the “latest possible maturity date” for each Class of Certificates.

(2)

The Pass-Through Rate for each Group I Senior Certificate and Group I Mezzanine Certificate are as set forth in the definition of  “Pass-Through Rate” herein.

(3)

The Class II-X1 Certificates are Interest Only Certificates, will not be entitled to distributions in respect of principal and will bear interest on the Class II-X1 Notional Amount (initially approximately $8,508,669).

(4)

The Class II-X2 Certificates are Interest Only Certificates, will not be entitled to distributions in respect of principal and will bear interest on the Class II-X2 Notional Amount (initially approximately $786,021).

(5)

The Class II-PO Certificates are Principal-Only Certificates and are not entitled to any distributions of interest.

(6)

The Class I-CE Certificates will not accrue interest on its Certificate Principal Balance, but will be entitled to 100% of amounts distributed on the [T4-X interest in REMIC IV].

(7)

The Class I-P, Class II-P and Class I-R Certificates will not accrue interest.

(8)

The interest rate for the Class II-M, Class II-B-1, Class II-B-2, Class II-B-3, Class II-B-4 and Class II-B-5 Certificates is equal to the weighted average of (i) with respect to the Subgroup II-1 and Subgroup II-3 Mortgage Loans, 6.00% and (ii) with respect to the Subgroup II-2 Mortgage Loans, 5.50%, weighted in proportion to the results of subtracting the current aggregate certificate principal balance of the related senior certificates (other than the Class II-X1 and Class II-X2 Certificates) from the aggregate principal balance of each loan subgroup.

 

W I T N E S S E T H

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

ARTICLE I
DEFINITIONS

Section 1.1 General Definitions and Group I Definitions .  

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

Accepted Master Servicing Practices :  With respect to any Loan, as applicable, those customary mortgage servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Master Servicer (except in its capacity as successor to a Servicer).  

Account :  The Distribution Account, the Cap Account, each Swap Account, the Reserve Fund and any Protected Account as the context may require.

Additional Disclosure Notification:   Has the meaning set forth in Section 3.29(a)(ii) of this Agreement.

Additional Form 10-D Disclosure :  Has the meaning set forth in Section 3.29(a)(i) of this Agreement.

Additional Form 10-K Disclosure :  Has the meaning set forth in Section 3.29(d)(i) of this Agreement.  

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

Adjustable Rate Certificates :  The Group I Senior Certificates and the Group I Mezzanine Certificates.

Administration Fee: W ith respect to the Group I Loan and any Distribution Date, will be equal to the product of one-twelfth of (x) the Administration Fee Rate for such Group I Loan multiplied by (y) the principal balance of that Group I Loan as of the last day of the immediately preceding Due Period (or as of the Cut-Off Date with respect to the first Distribution Date), after giving effect to principal prepayments received during the related Prepayment Period.

Administration Fee Rate :  With respect to the Group I Loan will be equal to the sum of (i) the Servicing Fee Rate, (ii) the Master Servicing Fee Rate, (iii) the Credit Risk Management Fee Rate and (iv) the rate at which the premium payable in connection with any lender paid primary mortgage insurance policy is calculated, if applicable.

Advance :  Either (i) a Monthly Advance made by a Servicer as such term is defined in and pursuant to the related Servicing Agreement or (ii) a Monthly Advance made by the Master Servicer or the Trustee pursuant to Section 4.4.

Adverse REMIC Event :  As defined in Section 11.1(f).

Affiliate :  With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing. The Trustee may obtain and rely on an Officer’s Certificate of a Servicer or the Depositor to determine whether any Person is an Affiliate of such party.

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

Allocated Realized Loss Amount :  With respect to any Class of Adjustable-Rate Certificates (other than the Class I-A-1, Class I-A-2 and Class I-P Certificates) and any Distribution Date, an amount equal to the sum of any Realized Loss allocated to that Class of Group I Certificates on all prior Distribution Dates minus the sum of all payments in respect of Allocated Realized Loss Amounts distributed to that Class in connection with any Net Monthly Excess Cashflow on all previous Distribution Dates.

American Home: American Home Mortgage Servicing, Inc.

American Home Servicing Agreement: Master Mortgage Loan Purchase and Servicing Agreement, dated as of May 1, 2006, between the Seller, American Home Mortgage Corp. and American Home.

Anniversary :  Each anniversary of the Cut-Off Date.

Appraised Value :  The amount set forth in an appraisal made by or for the mortgage originator in connection with its origination of each Loan.

Assignment :  An assignment of the Mortgage, notice of transfer or equivalent instrument, in recordable form, sufficient under the laws of the jurisdiction where the related Mortgaged Property is located to reflect of record the sale and assignment of the Loan to the Trustee, which assignment, notice of transfer or equivalent instrument may, if permitted by law, be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county.

Assignment Agreements :  Shall mean (i) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and American Home, pursuant to which the American Home Servicing Agreement was assigned to the Depositor, (ii) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor, Countrywide Home Loans Servicing LP and Countrywide, pursuant to which the Countrywide Servicing Agreement was assigned to the Depositor, (iii) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006 among the Seller, the Depositor and GMACM pursuant to which the GMACM Servicing Agreement was assigned to the Depositor, (iv) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and GreenPoint, pursuant to which the GreenPoint Servicing Agreement was assigned to the Depositor, (v) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and IndyMac, pursuant to which the IndyMac Servicing Agreement was assigned to the Depositor, (vi) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and National City, pursuant to which the National City Servicing Agreement was assigned to the Depositor, (vii) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor, Bishop’s Gate Residential Mortgage Trust and PHH, pursuant to which the PHH Servicing Agreement was assigned to the Depositor, (viii) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and SPS, pursuant to the SPS Servicing Agreement was assigned to the Depositor, (ix) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and Wells Fargo, pursuant to which the Wells Fargo Servicing Agreement was assigned to the Depositor, and (x) the Assignment, Assumption and Recognition Agreement, dated as of October 31, 2006, among the Seller, the Depositor and Wells Fargo, pursuant to which the Wells Fargo Warranties and Servicing Agreement was assigned to the Depositor,.

Authorized Denomination :  With respect to the Group I Senior Certificates and the Group I Mezzanine Certificates, minimum initial Certificate Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof.  With respect to the Class I-P Certificates, minimum initial Certificate Principal Balances of $20 and integral multiples thereof. With respect to the Class I-CE Certificates, minimum initial Certificate Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof.  With respect to the Class I-R Certificate, a single denomination of 100% Percentage Interest in such Certificate.

Bankruptcy Loss :  A loss on a Group I Loan as reported by the related Servicer, arising out of (i) a reduction in the scheduled Monthly Payment for such Group I Loan by a court of competent jurisdiction in a case under the United States Bankruptcy Code, other than any such reduction that arises out of clause (ii) of this definition of “Bankruptcy Loss,” including, without limitation, any such reduction that results in a permanent forgiveness of principal, or (ii) with respect to any Group I Loan, a valuation, by a court of competent jurisdiction in a case under such Bankruptcy Code, of the related Mortgaged Property in an amount less than the then outstanding Principal Balance of such Group I Loan.

Beneficial Holder :  A Person holding a beneficial interest in any Book-Entry Certificate as or through a Depository Participant or an Indirect Depository Participant or a Person holding a beneficial interest in any Definitive Certificate.

Book-Entry Certificates :  The Senior Certificates (other than the Class II-AR Certificates) and the Mezzanine Certificates (other than the Class II-B-3, Class II-B-4 and Class II-B-5 Certificates), beneficial ownership and transfers of which shall be made through book entries as described in Section 6.1 and Section 6.3.

Business Day :  Any day other than a Saturday, a Sunday, or a day on which banking institutions in the States of Maryland, Minnesota or New York are authorized or obligated by law or executive order to be closed.

Cap Account : A segregated trust account established and maintained by the Securities Administrator pursuant to Section 4.10 of this Agreement.

Cap Agreement: The cap agreement between the Securities Administrator on behalf of the Supplement Interest Trust and the Cap Provider relating to the Group I Certificates (other than the Class I-P and Class I-R Certificates) in the form attached hereto as Exhibit R.

Cap Agreement Report :  The report to be delivered at least four Business Days prior to each Distribution Date by the Cap Provider to the Securities Administrator containing the amount of any payment payable by the Cap Provider to the Supplemental Interest Trust with respect to the Cap Agreement for that Distribution Date.

Cap Provider:  The cap provider under the Cap Agreement and any successor in interest or assign. Initially, the Certificate Swap Provider shall be The Bank of New York.

Certificate :  Any one of the Certificates issued pursuant to this Agreement, executed and authenticated by or on behalf of the Securities Administrator hereunder in substantially one of the forms set forth in Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9 and A-10 hereto.

Certificate Register :  The register maintained pursuant to Section 6.3.

Certificateholder or Holder :  The person in whose name a Certificate is registered in the Certificate Register, except that solely for the purposes of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor, the Master Servicer, the Securities Administrator, the Trustee or any Affiliate thereof shall be deemed not to be outstanding and the Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite percentage of Percentage Interests necessary to effect any such consent has been obtained.  The Trustee or the Securities Administrator may conclusively rely upon a certificate of the Depositor, the Seller or the Master Servicer in determining whether a Certificate is held by an Affiliate thereof. All references herein to “Holders” or “Certificateholders” shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the Depository and participating members thereof, except as otherwise specified herein; provided, however, that the Trustee or the Securities Administrator shall be required to recognize as a “Holder” or “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate Register.  

Certificate Owner :  With respect to a Book-Entry Certificate, the Person who is the beneficial owner of such Certificate as reflected on the books of the Depository or on the books of a Depository Participant or on the books of an Indirect Depository Participant.

Certificate Swap Account: A segregated trust account established and maintained by the Securities Administrator pursuant to Section 4.8 of this Agreement.

Certificate Swap Agreement: The Interest Rate Swap Agreement, dated as of October 31, 2006, between HSBC Bank USA, National Association, as trustee on behalf of the Supplemental Interest Trust, and the Certificate Swap Provider, together with any schedules, confirmations or other agreements relating thereto.  A copy of the Certificate Swap Agreement relating to the Group I Senior Certificates and Group I Mezzanine Certificates in the form attached hereto as Exhibit P.

Certificate Swap Provider:  The swap provider under the Certificate Swap Agreement and any successor in interest or assign.  Initially, the Certificate Swap Provider shall be Deutsche Bank, AG New York Branch, a banking institution and a stock corporation incorporated under the laws of Germany.

Certificate Swap Report :  The report to be delivered at least four Business Days prior to each Distribution Date by the Certificate Swap Provider to the Securities Administrator containing the amount of any Net Swap Payment payable by the Supplemental Interest Trust or the Certificate Swap Provider to the other party, as the case may be, with respect to the Certificate Swap Agreement for that Distribution Date.

Class :  All Certificates having the same priority and rights to payments from the Group I Available Distribution Amount and Group II Available Distribution Amount, designated as a separate Class under the heading Certificates in the preliminary statement, as set forth in the forms of Certificates attached hereto as Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8, A-9, A-10 as applicable.

Class I-A-1 Amount :  For any Distribution Date, the sum of (a) the amount, if any, distributed to the Class I-A-1 Certificates in accordance with Section 4.1(a)(vi) hereof and (b) the amount, if any, distributed to the Class I-A-1 Certificates in accordance with Section 4.1(a)(vii) hereof.

Class I-A-1 REMIC Swap Rate : For each Distribution Date (and the related Interest Accrual Period), a per annum rate equal to the product of (i) the rate used to calculate the amount payable by the Supplemental Interest Trust on the Class I-A-1 Swap Agreement, (ii) 2, and (iii) the quotient of  (a) the actual number of days in the Interest Accural Period divided by (b) 30.

Class I-A-1 Swap Account: A segregated trust account established and maintained by the Securities Administrator pursuant to Section 4.9 of this Agreement.

Class I-A-1 Swap Agreement: The Interest Rate Swap Agreement, dated as of October 31, 2006, between HSBC Bank USA, National Association, as trustee on behalf of the Supplemental Interest Trust, and the Class I-A-1 Swap Provider, together with any schedules, confirmations or other agreements relating thereto.  A copy of the Class I-A-1 Swap Agreement is attached hereto as Exhibit Q.

Class I-A-1 Swap Provider:  The swap provider under the Class I-A-1 Swap Agreement and any successor in interest or assign.  Initially, the Class I-A-1 Swap Provider shall be Deutsche Bank, AG New York Branch, a banking institution and a stock corporation incorporated under the laws of Germany.  

Class I-CE Certificates :  The Class I-CE Certificates designated as such on the face thereof in substantially the form attached hereto as Exhibit A-8.

Class I-M-1 Principal Distribution Amount :  The Class I-M-1 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date and (ii) the Certificate Principal Balance of the Class I-M-1 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 89.30% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate principal balance of the Group I Loans as of the Cut-Off Date.

Class I-M-2 Principal Distribution Amount :  The Class I-M-2 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date and (iii) the Certificate Principal Balance of the Class I-M-2 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 91.80% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-3 Principal Distribution Amount :  The Class I-M-3 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date and (iv) the Certificate Principal Balance of the Class I-M-3 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 93.10% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) excess, if any, of the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-4 Principal Distribution Amount :   The Class I-M-4 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date and (v) the Certificate Principal Balance of the Class I-M-4 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 94.30% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-5 Principal Distribution Amount :  The Class I-M-5 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date, (v) the Certificate Principal Balance of the Class I-M-4 Certificates after taking into account the payment of the Class I-M-4 Principal Distribution Amount on the Distribution Date and (vi) the Certificate Principal Balance of the Class I-M-5 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 95.30% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of, the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-6 Principal Distribution Amount :  The Class I-M-6 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date, (v) the Certificate Principal Balance of the Class I-M-4 Certificates after taking into account the payment of the Class I-M-4 Principal Distribution Amount on the Distribution Date, (vi) the Certificate Principal Balance of the Class I-M-5 Certificates after taking into account the payment of the Class I-M-5 Principal Distribution Amount on the Distribution Date and (vii) the Certificate Principal Balance of the Class I-M-6 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 96.20% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of, the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-7 Principal Distribution Amount :  The Class I-M-7 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date, (v) the Certificate Principal Balance of the Class I-M-4 Certificates after taking into account the payment of the Class I-M-4 Principal Distribution Amount on the Distribution Date, (vi) the Certificate Principal Balance of the Class I-M-5 Certificates after taking into account the payment of the Class I-M-5 Principal Distribution Amount on the Distribution Date, (vii) the Certificate Principal Balance of the Class I-M-6 Certificates after taking into account the payment of the Class I-M-6 Principal Distribution Amount on the Distribution Date and (viii) the Certificate Principal Balance of the Class I-M-7 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 96.90% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of, the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-8 Principal Distribution Amount :  The Class I-M-8 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date, (v) the Certificate Principal Balance of the Class I-M-4 Certificates after taking into account the payment of the Class I-M-4 Principal Distribution Amount on the Distribution Date, (vi) the Certificate Principal Balance of the Class I-M-5 Certificates after taking into account the payment of the Class I-M-5 Principal Distribution Amount on the Distribution Date, (vii) the Certificate Principal Balance of the Class I-M-6 Certificates after taking into account the payment of the Class I-M-6 Principal Distribution Amount on the Distribution Date, (viii) the Certificate Principal Balance of the Class I-M-7 Certificates after taking into account the payment of the Class I-M-7 Principal Distribution Amount on the Distribution Date and (ix) the Certificate Principal Balance of the Class I-M-8 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 97.60% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of, the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-9 Principal Distribution Amount :  The Class I-M-9 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date, (v) the Certificate Principal Balance of the Class I-M-4 Certificates after taking into account the payment of the Class I-M-4 Principal Distribution Amount on the Distribution Date, (vi) the Certificate Principal Balance of the Class I-M-5 Certificates after taking into account the payment of the Class I-M-5 Principal Distribution Amount on the Distribution Date, (vii) the Certificate Principal Balance of the Class I-M-6 Certificates after taking into account the payment of the Class I-M-6 Principal Distribution Amount on the Distribution Date, (viii) the Certificate Principal Balance of the Class I-M-7 Certificates after taking into account the payment of the Class I-M-7 Principal Distribution Amount on the Distribution Date, (ix) the Certificate Principal Balance of the Class I-M-8 Certificates immediately prior to the Distribution Date, and (x) the Certificate Principal Balance of the Class I-M-9 Certificates immediately prior to the Distribution Date, over (y) the lesser of (A) the product of (i) 98.30% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of, the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-M-10 Principal Distribution Amount :  The Class I-M-9 Principal Distribution Amount for any Distribution Date is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Group I Senior Certificates after taking into account the payment of the Group I Senior Principal Distribution Amount on the Distribution Date, (ii) the Certificate Principal Balance of the Class I-M-1 Certificates after taking into account the payment of the Class I-M-1 Principal Distribution Amount on the Distribution Date, (iii) the Certificate Principal Balance of the Class I-M-2 Certificates after taking into account the payment of the Class I-M-2 Principal Distribution Amount on the Distribution Date, (iv) the Certificate Principal Balance of the Class I-M-3 Certificates after taking into account the payment of the Class I-M-3 Principal Distribution Amount on the Distribution Date, (v) the Certificate Principal Balance of the Class I-M-4 Certificates after taking into account the payment of the Class I-M-4 Principal Distribution Amount on the Distribution Date, (vi) the Certificate Principal Balance of the Class I-M-5 Certificates after taking into account the payment of the Class I-M-5 Principal Distribution Amount on the Distribution Date, (vii) the Certificate Principal Balance of the Class I-M-6 Certificates after taking into account the payment of the Class I-M-6 Principal Distribution Amount on the Distribution Date, (viii) the Certificate Principal Balance of the Class I-M-7 Certificates after taking into account the payment of the Class I-M-7 Principal Distribution Amount on the Distribution Date, (ix) the Certificate Principal Balance of the Class I-M-8 Certificates immediately prior to the Distribution Date, (x) the Certificate Principal Balance of the Class I-M-9 Certificates immediately prior to the Distribution Date, and (xi) the Certificate Principal Balance of the Class I-M-9 Certificates immediately prior to the Distribution Date over (y) the lesser of (A) the product of (i) 99.30% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess, if any, of, the aggregate Scheduled Principal Balance of the Group I Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over the product of (i) 0.35% and (ii) the aggregate Scheduled Principal Balance of the Group I Loans as of the Cut-Off Date.

Class I-P Certificates :  The Class I-P Certificates, and designated as such on the face thereof in substantially the form attached hereto as Exhibit A-9.

Class I-R Certificate :  The Certificate designated as “Class I-R” on the face thereof in substantially the form attached hereto as Exhibit A-10, which has been designated as the sole Class of “residual interests” in each Group I REMIC.

Class I-R Certificateholder :  The registered Holder of the Class I-R Certificate.

Clearing Agency :  An organization registered as a “clearing agency” pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended, which initially shall be the Depository.

Closing Date :  October 31, 2006.

Code :  The Internal Revenue Code of 1986, as amended.

Commission:  Means the United States Securities and Exchange Commission.

Compensating Interest :  For any Distribution Date and (i) each Servicer, as set forth in the related Servicing Agreement and (ii) the Master Servicer, the amount described in Section 3.21.

Controlling Person :  Means, with respect to any Person, any other Person who “controls” such Person within the meaning of the Securities Act.

Corporate Trust Office :  The principal corporate trust office of the Trustee or the Securities Administrator, as the case may be, at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at (i) with respect to the Trustee, HSBC Bank USA, National Association, 452 Fifth Avenue, New York, New York 10018, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer and the Securities Administrator, or (ii) with respect to the Securities Administrator, (A) for Certificate transfer and surrender purposes, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention:  DBALT 2006-AR5 and (B) for all other purposes, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention:  DBALT 2006-AR5, or at such other address as the Securities Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer and the Trustee.

Corresponding Class of Certificate :  With respect to each REMIC III, REMIC IV, and REMIC VI Regular Interest, the Class of Certificate with the corresponding designation.

Countrywide:  Countrywide Home Loans, Inc., or any successor thereto.

Countrywide Servicing: Countrywide Home Loans Servicing LP, or any successor thereto.

 

Countywide Servicing Agreement:  The Amended and Restated Master Mortgage Loan Purchase and Servicing Agreement dated as of May 1, 2004, as amended and restated to and including August 1, 2005 as further amended by the Amendment Reg AB dated as of January 31, 2006, between the Seller and Countrywide, as assigned the servicing rights to Countrywide Servicing pursuant to section 7.05 of the Countrywide Servicing Agreement.

 

Credit Enhancement Percentage :  for any Distribution Date is the percentage obtained by dividing (x) the aggregate Certificate Principal Balance of the Group I Subordinate Certificates (which includes the Overcollateralization Amount) by (y) the sum of the aggregate Principal Balance of the group I Loans, calculated after taking into account distributions of principal on the Group I Loans and distribution of the Group I Principal Distribution Amount to the holders of the Certificates then entitled to distributions of principal on the Distribution Date.

Credit Risk Management Agreement or Credit Risk Management Agreements : Each agreement between the Credit Risk Manager and a Servicer or the Master Servicer, regarding the loss mitigation and advisory services to be provided by the Credit Risk Manager.

Credit Risk Management Fee : The amount payable to the Credit Risk Manager on each Distribution Date as compensation for all services rendered by it in the exercise and performance of any and all powers and duties of the Credit Risk Manager under any Credit Risk Management Agreement, which amount shall equal one twelfth of the product of (i) the Credit Risk Management Fee Rate multiplied by (ii) the aggregate of the Scheduled Principal Balance of each Loan and any related REO Properties as of the first day of the related Due Period.

Credit Risk Management Fee Rate :  [0.009]% per annum.

Credit Risk Manager :  Clayton Fixed Income Services Inc., a Colorado corporation formerly known as The Murrayhill Company, and its successors and assigns.

Curtailment :  Any voluntary payment of principal on a Loan, made by or on behalf of the related Mortgagor, other than a Monthly Payment, a Prepaid Monthly Payment or a Payoff, which is applied to reduce the outstanding Principal Balance of the Loan.

Curtailment Shortfall :  With respect to any Distribution Date and any Curtailment received during the related Prepayment Period, an amount equal to one month’s interest on such Curtailment at the applicable Mortgage Interest Rate on such Loan, net of the related Servicing Fee Rate.

Custodial Agreement :  Either (i) the DBNTC Custodial Agreement or (ii) the Wells Fargo Custodial Agreement.

Custodian :  DBNTC or Wells Fargo or any other custodian appointed under any custodial agreement entered into after the date of this Agreement.

Cut-Off Date :  October 1, 2006; except that with respect to each Substitute Loan, the Cut-Off Date shall be the date of substitution.

DBNTC :  Deutsche Bank National Trust Company, a national banking association, or its successor in interest.

DBNTC Custodial Agreement :  The Custodial Agreement, dated as of October 1, 2006, among DBNTC, American Home, Countrywide Servicing, GMAC, IndyMac and Wells Fargo as may be amended from time to time.

Definitive Certificates :  As defined in Section 6.3.

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

Delinquency Percentage:   As of the last day of the related Due Period, the percentage equivalent of a fraction, the numerator of which is the Principal Balance of all Loans that, as of the last day of the previous calendar month, are 60 or more days delinquent, are in foreclosure, have been converted to REO Properties or have been discharged by reason of bankruptcy, and the denominator of which is the aggregate Principal Balance of the Loans and REO Properties as of the last day of the previous calendar month.

Depositor :  Deutsche Alt-A Securities, Inc., a Delaware corporation, or its successor-in-interest.

Depository :  The Depository Trust Company, or any successor Depository hereafter named. The nominee of the initial Depository, for purposes of registering those Certificates that are to be Book-Entry Certificates, is CEDE & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York and a Clearing Agency.

Depository Agreement :  The Letter of Representations, dated October [30], 2006 by and among the Depository, the Depositor and the Trustee.

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

Determination Date :  With respect to each Servicer, the day of the month set forth as the Determination Date in the related Servicing Agreement. With respect to Article XI hereto, the fifteenth (15th) day of the month or if such day is not a Business Day, the Business Day immediately following such fifteenth (15th) day.

Disqualified Organization:   A “disqualified organization” as defined in Section 860E(e)(5) of the Code, and, for purposes of Article VII herein, any Person which is not a Permitted Transferee; provided, that a Disqualified Organization does not include any Pass-Through Entity which owns or holds a Class I-R Certificate and if which a Disqualified Organization, directly or indirectly, may be a stockholder, partner or beneficiary.

Distribution Account :  The trust account or accounts created and maintained by the Securities Administrator pursuant to Section 3.23 for the benefit of the Certificateholders and designated “Wells Fargo Bank, N.A., as Securities Administrator, in trust for registered holders of Deutsche Alt-A Securities Mortgage Loan Trust, Series 2006-AR5”.  Funds in the Distribution Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement. The Distribution Account must be an Eligible Account.

Distribution Account Deposit Date :  With respect to any Distribution Date, the Business Day prior to such Distribution Date.

Distribution Date :  The 25th day (or, if such 25th day is not a Business Day, the Business Day immediately succeeding such 25th day) of each month, with the first such date being November 27, 2006.

Due Date :  The first day of each calendar month, which is the day on which the Monthly Payment for each Loan is due, exclusive of any days of grace.  The “related Due Date” for any Distribution Date is the Due Date immediately preceding such Distribution Date.

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

Eligible Account :  Any account or accounts (1) maintained by the Securities Administrator with a federal or state chartered depository institution or trust company that complies with the definition of “Eligible Institution,” or (2) maintained with the corporate trust department of a federal depository institution or state-chartered depository institution subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal Regulation Section 10.10(b), which, in either case, has corporate trust powers and is acting in its fiduciary capacity.

Eligible Institution :  An institution having both (a) (i) the highest short-term debt rating, and one of the two highest long-term debt ratings of Fitch and Moody’s, (ii) with respect to the Distribution Account, an unsecured long-term debt rating of at least one of the two highest unsecured long-term debt ratings of Fitch and Moody’s, or (iii) the approval of Fitch and S&P and (b) (i) commercial paper, short-term debt obligations, or other short-term deposits rated at least ‘I-A-1+’ or long-term unsecured debt obligations rated at least ‘AA-’ by S&P, if the amounts on deposit are to be held in the account for no more than 365 days; or (ii) commercial paper, short-term debt obligations, or other short-term deposits rated at least ‘I-A-1’ by S&P, if the amounts on deposit represent less than 20% of the initial par value of the securities, are not intended to be used as credit enhancement, and are to be held in the account for less than 30 days.

Eligible Investments :  Any one or more of the following obligations or securities payable on demand or having a scheduled maturity on or before the Business Day preceding the following Distribution Date (or, with respect to the Distribution Account maintained with the Securities Administrator, having a scheduled maturity on or before the following Distribution Date; provided that, such Eligible Investments shall be managed by, or an obligation of, the institution that maintains the Distribution Account if such Eligible Investments mature on the Distribution Date), regardless of whether any such obligation is issued by the Depositor, the applicable Servicer, the Trustee, the Master Servicer, the Securities Administrator or any of their respective Affiliates and having at the time of purchase, or at such other time as may be specified, the required ratings, if any, provided for in this definition:

(a)

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

(b)

direct obligations of, or guaranteed as to timely payment of principal and interest by, Freddie Mac, Fannie Mae or the Federal Farm Credit System, provided, that any such obligation, at the time of purchase or contractual commitment providing for the purchase thereof, is qualified by each Rating Agency as an investment of funds backing securities rated “AAA” in the case of S&P and “Aaa” in the case of Moody’s (the initial rating of the Group I Senior Certificates);

(c)

demand and time deposits in or certificates of deposit of, or bankers’ acceptances issued by, any bank or trust company, savings and loan association or savings bank, provided, that the short-term deposit ratings and/or long-term unsecured debt obligations of such depository institution or trust company (or in the case of the principal depository institutions in a holding company system, the commercial paper or long-term unsecured debt obligations of such holding company) have, in the case of commercial paper, the highest rating available for such securities by each Rating Agency and, in the case of long-term unsecured debt obligations, one of the two highest ratings available for such securities by each Rating Agency, or in each case such lower rating as will not result in the downgrading or withdrawal of the rating or ratings then assigned to any Class of Certificates by any Rating Agency but in no event less than the initial rating of the Group I Senior Certificates;

(d)

commercial or finance company paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than one year after the date of issuance thereof) that is rated by each Rating Agency in its highest short-term unsecured rating category at the time of such investment or contractual commitment providing for such investment, and is issued by a corporation the outstanding senior long-term debt obligations of which are then rated by each Rating Agency in one of its two highest long-term unsecured rating categories, or such lower rating as will not result in the downgrading or withdrawal of the rating or ratings then assigned to any Class of Certificates by any Rating Agency but in no event less than the initial rating of the Group I Senior Certificates;

(e)

guaranteed reinvestment agreements issued by any bank, insurance company or other corporation rated in one of the two highest rating levels available to such issuers by each Rating Agency at the time of such investment, provided, that any such agreement must by its terms provide that it is terminable by the purchaser without penalty in the event any such rating is at any time lower than such level;

(f)

repurchase obligations with respect to any security described in clause (a) or (b) above entered into with a depository institution or trust company (acting as principal) meeting the rating standards described in (c) above;

(g)

securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any State thereof and rated by each Rating Agency in one of its two highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment; provided, however, that securities issued by any such corporation will not be Eligible Investments to the extent that investment therein would cause the outstanding principal amount of securities issued by such corporation that are then held as part of the Distribution Account to exceed 20% of the aggregate principal amount of all Eligible Investments then held in the Distribution Account;

(h)

units of taxable money market funds (including those for which the Trustee, the Securities Administrator, the Master Servicer or any affiliate thereof receives compensation with respect to such investment) which funds have been rated by each Rating Agency rating such fund in its highest rating category or which have been designated in writing by each Rating Agency as Eligible Investments with respect to this definition;

(i)

if previously confirmed in writing to the Trustee and the Securities Administrator, any other demand, money market or time deposit, or any other obligation, security or investment, as may be acceptable to each Rating Agency as a permitted investment of funds backing securities having ratings equivalent to the initial rating of the Group I Senior Certificates; and

(j)

such other obligations as are acceptable as Eligible Investments to each Rating Agency;

provided, however, that such instrument continues to qualify as a “cash flow investment” pursuant to Code Section 860G(a)(6) and that no instrument or security shall be an Eligible Investment if (i) such instrument or security evidences a right to receive only interest payments or (ii) the right to receive principal and interest payments derived from the underlying investment provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying investment.

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

ERISA-Qualifying Underwriting:   With respect to any ERISA-Restricted Certificate, a best efforts or firm commitment underwriting or private placement that meets the requirements of the Underwriters’ Exemption.

ERISA-Restricted Certificate:  The Class I-CE, the Class I-P, the Class I-R, the Class II-P, the Class B-3, the Class B-4 and the Class B-5 Certificates and Certificates of any Class that no longer satisfy the applicable rating requirements of the Underwriters’ Exemption as specified in the Preliminary Statement.

ERISA-Restricted Trust Certificate:   Any Group I Senior Certificate and Group I Mezzanine Certificates that is not an ERISA-Restricted Certificate.

Exchange Act :  The Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

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

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

Fitch: Fitch Ratings or any successor thereto.

Form 8-K Disclosure Information :  Has the meaning set forth in Section 3.29(b) of this Agreement.

Freddie Mac :  The Federal Home Loan Mortgage Corporation, or any successor thereto.

GMACM :  GMAC Mortgage, LLC, or any successor thereto.

GMACM Servicing Agreement :  The Servicing Agreement, dated as of August 5, 2005, as amended by Amendment Number One, dated January 31, 2006, between the Seller and GMACM and as modified pursuant to the related Assignment Agreement.

GreenPoint :  GreenPoint Mortgage Funding, Inc. or any successor thereto.

GreenPoint Servicing Agreement :  The Amended and Restated Master Mortgage Loan Purchase and Servicing Agreement, dated as of January 1, 2005, between the Seller and GreenPoint, as amended by Amendment One, dated as of April 8, 2005, Amendment Two, dated as of June 30, 2005, Amendment Three, dated as of October 7, 2005, Amendment Four, dated as of March 7, 2006, and Amendment Five, dated as of June 9, 2006, each between the Seller and GreenPoint (as modified pursuant to the related Assignment Agreement).

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

Group I Available Distribution Amount :  With respect to a Distribution Date, the sum of the following amounts:

(1)

the total amount of all cash received by or on behalf of each Servicer with respect to the Group I Loans by the Determination Date for such Distribution Date and not previously distributed (including Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries and, and proceeds received in connection with the repurchase of a Group I Loans and,

(a)

all Prepaid Monthly Payments;

(b)

all Curtailments received after the applicable Prepayment Period, together with all interest paid by the related Mortgagor in connection with such Curtailments;

(c)

all Payoffs received after the applicable Prepayment Period, together with all interest paid by the related Mortgagor in connection with such Payoffs;

(d)

Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries on the Group I Loans received after the applicable Prepayment Period;

(e)

all amounts which are due and reimbursable to the related Servicer pursuant to the terms of the related Servicing Agreement or to the Master Servicer, the Securities Administrator, the Trustee or the Custodian pursuant to the terms of this Agreement or the Custodial Agreements;

(f)

the Servicing Fee, the Master Servicing Fee and the Credit Risk Management Fee for each such Group I Loan for such Distribution Date;

(g)

all investment earnings, if any, on amounts on deposit in the Distribution Account and each Protected Account;

(h)

any premiums payable in connection with any lender paid primary mortgage insurance policies; and

(i)

the amount of any Prepayment Charges collected by the related Servicer in connection with the Principal Prepayment of any of the Group I Loans.

(2)

to the extent advanced by the related Servicer and/or the Master Servicer and not previously distributed, the amount of any Advance made by the related Servicer and/or the Master Servicer or Trustee with respect to such Distribution Date relating to the Group I Loans;

(3)

to the extent advanced by the related Servicer and/or the Master Servicer and not previously distributed, any amount payable as Compensating Interest by the related Servicer and/or the Master Servicer on such Distribution Date relating to the Group I Loans; and

(4)

the total amount, to the extent not previously distributed, of all cash received by the Distribution Date by the Trustee or the Master Servicer, in respect of a Purchase Obligation under Section 2.3 or any permitted repurchase of a Group I Loan or a purchase by the Special Servicer pursuant to Section 7.11.

Group I Certificates:  The Group I Senior Certificates, Group I Subordinate Certificates, Class I-P Certificates and Class I-R Certificates.

Group I Certificate Principal Balance :  The Certificate Principal Balance with respect to a Group I Senior Certificate, Group I Mezzanine Certificate or Class I-P Certificate outstanding at any time, represents the then maximum amount that the holder of such Certificate is entitled to receive as distributions allocable to principal from the cash flow on the Group I Loans and the other assets in the Trust Fund. The Certificate Principal Balance of a Group I Senior Certificate, Group I Mezzanine Certificate or Class I-P Certificate as of any date of determination is equal to the initial Certificate Principal Balance of such Certificate reduced by the aggregate of (i) all amounts allocable to principal previously distributed with respect to that Certificate, and (ii) any reductions in the Certificate Principal Balance of such Certificate deemed to have occurred in connection with allocations of Realized Losses, if any, plus any Subsequent Recoveries added to the Certificate Principal Balance of such Certificate pursuant to Section 6.4. The Certificate Principal Balance of the Class I-CE Certificates as of any date of determination is equal to the excess, if any, of (i) the then aggregate Principal Balance of the Group I Loans over (ii) the then aggregate Certificate Principal Balance of the Group I Senior Certificates, the Group I Mezzanine Certificates and the Class I-P Certificates. The initial Certificate Principal Balance of each Class of Group I Certificates is set forth in the Preliminary Statement hereto.  When used in reference to a Class, the term Certificate Principal Balance means the aggregate of the Certificate Principal Balances of all Group I Certificates of such Class, and when used in reference to a group of Classes (such as the Group I Senior Certificates and Group I Mezzanine Certificates) shall mean the aggregate Certificate Principal Balances of all Classes of Group I Certificates included in such group.

Group I Interest Distribution Amount :  On any Distribution Date, for any Class of Group I Certificates (other than the Class I-CE Certificates, the Class I-P Certificates and the Class I-R Certificates), the amount of interest accrued during the related Interest Accrual Period on the Certificate Principal Balance of that Class which shall be an amount, not less than zero, equal to (a) the product of (1) 1/12th of the Pass-Through Rate for such Class and (2) the Certificate Principal Balance for such Class before giving effect to allocations of Realized Losses in connection with such Distribution Date or distributions to be made on such Distribution Date, reduced by (b) Uncompensated Interest Shortfalls allocated to such Class pursuant to Section 1.2 and the interest portion of Realized Losses allocated to such Class pursuant to Section 1.2.  On any Distribution Date, for the Class I-CE Certificates, the amount of interest accrued during the related Interest Accrual Period with respect to the [T4-X interest in REMIC IV], reduced by Uncompensated Interest Shortfalls allocated to the Class I-CE Certificates pursuant to Section 1.2 and the interest portion of Realized Losses allocated to the Class I-CE Certificates pursuant to Section 1.2.

Group I Interest Remittance Amount :  For any Distribution Date, the sum of the following amounts:

(1)

all interest received by or on behalf of each Servicer with respect to the Group I Loans by the Determination Date for such Distribution Date and not previously distributed;

(2)

all Advances in respect of interest made by a Servicer and/or the Master Servicer with respect to Group I Loans for that Distribution Date;

(3)

any amounts paid as Compensating Interest on the Group I Loans by a Servicer and/or the Master Servicer for that Distribution Date;

(4)

the interest portions of the total amount deposited in the Distribution Account in connection with a Purchase Obligation under Section 2.3, any permitted purchase of a Group I Loan pursuant to Section  3.31 or any permitted repurchase of a Loan;

(5)

the interest portions of the Termination Price;

minus the sum of the following amounts:

(1)

the interest portion of all Prepaid Monthly Payments;

(2)

the interest portion of all Curtailments received after the related Prepayment Period, together with all interest paid by the related Mortgagor in connection with such Curta