POOLING AND SERVICING AGREEMENT

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EXECUTION VERSION

 

WaMu ASSET ACCEPTANCE CORP.,

as Depositor

and

WASHINGTON MUTUAL BANK,

as Servicer

and

LASALLE BANK NATIONAL ASSOCIATION,

as Trustee

and

CHRISTIANA BANK & TRUST COMPANY,

as Delaware Trustee

POOLING AND SERVICING AGREEMENT

$1,570,257,830.94

WaMu Mortgage Pass-Through Certificates Series 2006-AR18 Trust

WaMu Asset Acceptance Corp.

WaMu Mortgage Pass-Through Certificates

Series 2006-AR18

Cut-Off Date: December 1, 2006

 

 

This Pooling and Servicing Agreement, dated as of December 1, 2006 (this “ Agreement ”), is by and among WaMu Asset Acceptance Corp., as depositor (the “ Company ”), Washington Mutual Bank, as Servicer, LaSalle Bank National Association, as Trustee, and Christiana Bank & Trust Company, as Delaware 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 Company at the Closing Date is the owner of the Mortgage Loans and the other property being conveyed by it to the Trust. On the Closing Date, the Company will sell the Mortgage Loans and certain other assets to the Trust in return for the REMIC I and REMIC II Regular Interests and the Class R-1 and Class R-2 Residual Interests and will be the owner of the REMIC I and REMIC II Regular Interests and the Class R-1 and Class R-2 Residual Interests.  Thereafter, on the Closing Date, the Company will acquire the REMIC III Regular Interests and the Class R-3 Residual Interest from the Trust as consideration for its transfer to the Trust of the REMIC I Regular Interests and will be the owner of the REMIC III Regular Interests and the Class R-3 Residual Interest.  The Company has duly authorized the execution and delivery of this Agreement to provide for (i) the sale to the Trust of the Mortgage Loans and certain other assets, (ii) the issuance to the Company of the REMIC I and REMIC II Regular Interests and the Class R-1 and Class R-2 Residual Interests representing in the aggregate the entire beneficial interest in REMIC I and REMIC II, (iii) the conveyance to the Trust of the REMIC I Regular Interests and (iv) the issuance to the Company of the REMIC III Regular Interests and the Class R-3 Residual Interest representing in the aggregate the entire beneficial interest in REMIC III. The Company and the Servicer are entering into this Agreement, and the Trustee and the Delaware Trustee are each accepting the trust created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

The Certificates issued hereunder, other than the Junior Subordinate Certificates, have been offered for sale pursuant to a Prospectus, dated December 18, 2006, and a Prospectus Supplement, dated December 18, 2006, of the Company (together, the “ Prospectus ”). The Junior Subordinate Certificates have been offered for sale pursuant to a Private Placement Memorandum, dated December 20, 2006.  The Trust created hereunder is the “Trust” described in the Prospectus and the Private Placement Memorandum and the Certificates are the “Certificates” described therein. The following tables set forth the designation, type of interest, Certificate Interest Rate, initial Class Principal Balance and Final Maturity Date for the REMIC I Regular Interests, the REMIC II Regular Interests, the REMIC III Regular Interests and the Class R Residual Interests:

 

 

REMIC I Interests

As provided herein, with respect to REMIC I, the Servicer will cause an election to be made on behalf of REMIC I to be treated for federal income tax purposes as a REMIC. The REMIC I Regular Interests will be designated regular interests in REMIC I and the Class R-1 Residual Interest will be designated the sole class of residual interest in REMIC I, for purposes of the REMIC Provisions.

 

REMIC II Interests

As provided herein, with respect to REMIC II, the Servicer will cause an election to be made on behalf of REMIC II to be treated for federal income tax purposes as a REMIC. The REMIC II Regular Interests will be designated regular interests in REMIC II and the Class R-2 Residual Interest will be designated the sole class of residual interest in REMIC II, for purposes of the REMIC Provisions.

 

REMIC III Interests

As provided herein, with respect to REMIC III, the Servicer will cause an election to be made on behalf of REMIC III to be treated for federal income tax purposes as a REMIC.  The REMIC III Regular Interests will be designated regular interests in REMIC III and the Class R-3 Residual Interest will be designated the sole class of residual interest in REMIC III, for purposes of the REMIC Provisions.

In addition, the Trust will issue the Class R Certificates, which will represent ownership of the Class R-1, Class R-2 and Class R-3 Residual Interests.

As of the Cut-Off Date, the Mortgage Loans have an aggregate Principal Balance of $1,570,257,830.94 and, as of the Closing Date, the Certificates have an Aggregate Certificate Principal Balance of $1,570,257,830.94.

W I T N E S S E T H :

WHEREAS, the Company is a corporation duly organized and existing under and by virtue of the laws of the State of Delaware and has full corporate power and authority to enter into this Agreement and to undertake the obligations undertaken by it herein;

WHEREAS, the Servicer is a federal savings association and has full power and authority to enter into this Agreement and to undertake the obligations undertaken by it herein;

WHEREAS, the Trustee is a national banking association duly organized and existing under the laws of the United States of America and has full power and authority to enter into this Agreement;

WHEREAS, the Delaware Trustee is a banking corporation duly organized and existing under the laws of the State of Delaware and has full power and authority to enter into this Agreement;

WHEREAS, prior to the execution and delivery hereof, the Company and the Delaware Trustee have entered into the Original Trust Agreement, and the Delaware Trustee has filed the Certificate of Trust;

WHEREAS, it is the intention of the Company, the Servicer, the Trustee and the Delaware Trustee that the Trust created by this Agreement constitute a statutory trust under the Statutory Trust Statute, that this Agreement constitute the governing instrument of the Trust, and that this Agreement amend and restate the Original Trust Agreement;

WHEREAS, the Company is the owner of the Mortgage Loans identified in the Mortgage Loan Schedule hereto having unpaid Principal Balances on the Cut-Off Date as stated therein; and

WHEREAS, the Company has been duly authorized to create the Trust to (i) hold the Mortgage Loans and certain other property, (ii) issue the REMIC I and REMIC II Regular Interests and the Class R-1 and Class R-2 Residual Interests, (iii) hold the REMIC I Regular Interests and (iv) issue the REMIC III Regular Interests and the Class R-3 Residual Interest.

NOW, THEREFORE, in order to declare the terms and conditions upon which the REMIC I Regular Interests, the REMIC II Regular Interests, the REMIC III Regular Interests, the Class R Residual Interests and the Certificates are to be issued, and in consideration of the premises and of the purchase and acceptance of the Certificates by the Holders thereof, the Company covenants and agrees with the Servicer, the Trustee and the Delaware Trustee, for the equal and proportionate benefit of the respective Holders from time to time of the REMIC I Regular Interests, the REMIC II Regular Interests, the REMIC III Regular Interests and the Certificates, as applicable, as follows:

ARTICLE I

Section 1.01.        Definitions .

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

Adjustment Date:   As to each Mortgage Loan, a Due Date on or about the fifth anniversary (in the case of the Group 1 Loans), on or about the seventh anniversary (in the case of the Group 2 Loans) and on or about the tenth anniversary (in the case of the Group 3 Loans) of the first Due Date and annually thereafter, as set forth in the related Mortgage Note, on which date an adjustment to the Mortgage Interest Rate of such Mortgage Loan becomes effective.

Aggregate Certificate Principal Balance : At any given time, the sum of the then current Class Principal Balances of the Certificates.

Agreement : The meaning specified in the introductory paragraph hereof.

Appraised Value :  With respect to any (i) Mortgage Loan that is not a Streamlined Mortgage Loan or ROV Mortgage Loan, the lesser of (a) the value set forth on the appraisal made in connection with the origination of such Mortgage Loan as the value of the related Mortgaged Property and (b) the purchase price paid for the Mortgaged Property, provided, however , that if such Mortgage Loan was originated in connection with the refinance of a mortgage loan, the Appraised Value shall be the value set forth on the appraisal made in connection with the origination of such Mortgage Loan as the value of the related Mortgaged Property; (ii) ROV Mortgage Loan, the lesser of (a) the value set forth on the residential appraisal review made in connection with the origination of such Mortgage Loan as the value of the related Mortgaged Property and (b) the purchase price paid for the Mortgaged Property, provided, however , that if such ROV Mortgage Loan was originated in connection with the refinance of a mortgage loan, the Appraised Value shall be the value set forth on the residential appraisal review made in connection with the origination of such ROV Mortgage Loan as the value of the related Mortgaged Property; and (iii) Streamlined Mortgage Loan, the value set forth in the appraisal made in connection with the origination of the mortgage loan being refinanced.

Assignment of Proprietary Lease : With respect to a Cooperative Loan, the assignment or mortgage of the related Cooperative Lease from the Mortgagor to the originator of the Cooperative Loan.

Authenticating Agent : Any authenticating agent appointed by the Trustee pursuant to Section 8.11.

Authorized Denomination :  With respect to each Class of Certificates (other than the Class R Certificates), an initial Certificate Principal Balance equal to $25,000 and multiples of $1 in excess thereof, except that one Certificate of each Class of the Junior Subordinate Certificates may be issued in an amount that is not an integral multiple of $1.  With respect to the Class R Certificates, one Certificate with a Percentage Interest equal to 0.01% and one Certificate with a Percentage Interest equal to 99.99%.

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

Bankruptcy Loss : For any Distribution Date and any Mortgage Loan, (i) the amount of any permanent forgiveness of principal with respect to such Mortgage Loan by a court of competent jurisdiction in a case under the United States Bankruptcy Code as of the related Due Date, other than any such forgiveness of principal that arises out of clause (ii) of this definition of “Bankruptcy Loss,” or (ii) the amount, if any, by which the then outstanding principal balance of such Mortgage Loan exceeds any valuation, as of the related Due Date, by a court of competent jurisdiction in a case under the United States Bankruptcy Code, of the related Mortgaged Property, in each case, to the extent not previously allocated to the Certificates as a Realized Loss.

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

Benefit Plan Opinion : With respect to any Certificate presented for registration in the name of any Person, an Opinion of Counsel acceptable to and in form and substance satisfactory to the Trustee and the Company to the effect that the purchase or holding of such Certificate is permissible under applicable law, will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, and will not subject the Trust, the Trustee, the Delaware Trustee, the Servicer or the Company to any obligation or liability (including obligations or liabilities under Section 406 of ERISA or Section 4975 of the Code) in addition to those undertaken in this Agreement, which Opinion of Counsel shall not be an expense of the Trust, the Trustee, the Delaware Trustee, the Servicer or the Company.

Book-Entry Certificates : The Class A and Senior Subordinate Certificates, beneficial ownership and transfers of which shall be made through book entries as described in Section 5.07.

Business Day : Any day other than a Saturday, a Sunday, or a day on which banking institutions in Stockton, California, Chicago, Illinois, New York, New York, Seattle, Washington or any city in which the Corporate Trust Office is located are authorized or obligated by law or executive order to be closed.

Buydown Agreement : An agreement between a Person and a Mortgagor pursuant to which such Person has provided a Buydown Fund.

Buydown Fund : A fund provided by the originator of a Mortgage Loan or another Person with respect to a Buydown Loan which provides an amount sufficient to subsidize regularly scheduled principal and interest payments due on such Buydown Loan for a period. Buydown Funds may be (i) funded at the par values of future payment subsidies, or (ii) funded in an amount less than the par values of future payment subsidies, and determined by discounting such par values in accordance with interest accruing on such amounts, in which event they will be deposited in an account bearing interest. Buydown Funds may be held in a separate Buydown Fund Account or may be held in a Custodial Account for P&I and monitored by the Servicer.

Buydown Fund Account : A separate account created and maintained pursuant to Section 3.02 (a) with the corporate trust department of the Trustee or another financial institution selected by the Servicer, (b) within FDIC insured accounts created, maintained and monitored by the Servicer or (c) in a separate account in an Eligible Institution. Such account may be non-interest bearing or may bear interest. In the event that a Buydown Fund Account is established pursuant to clause (b) of the preceding sentence, amounts held in such Buydown Fund Account shall not exceed the level of deposit insurance coverage on such account; accordingly, more than one Buydown Fund Account may be established.

Buydown Loan : A Mortgage Loan for which the Mortgage Interest Rate has been subsidized through a Buydown Fund provided at the time of origination of such Mortgage Loan.

Carry-Forward Subsequent Recoveries Amount : For any Distribution Date and any of Loan Group 1, Loan Group 2 or Loan Group 3, the excess, if any, of (i) the Subsequent Recoveries for such Distribution Date for such Loan Group over (ii) the amount by which the Class Principal Balance of the Class of Group L-B Certificates or Group 3-B Certificates, as applicable, with the lowest priority is increased in respect of Subsequent Recoveries for such Loan Group on such Distribution Date pursuant to the definition of “Class Principal Balance” herein.

Certificate : Any one of the Certificates issued pursuant to this Agreement, executed by the Trustee on behalf of the Trust and authenticated by or on behalf of the Trustee hereunder in substantially one of the forms set forth in Exhibit A and B hereto. The additional matter appearing in Exhibit H shall be deemed incorporated into Exhibit A as though set forth at the end of such Exhibit.

Certificate Account : The separate trust account created pursuant to Section 3.04 and maintained with the Trustee, the Investment Depository or any Eligible Institution, which account shall be entitled “WaMu Mortgage Pass-Through Certificates Series 2006-AR18 Trust Certificate Account”. Funds in the Certificate Account may be invested in Eligible Investments pursuant to Section 3.04(d) and reinvestment earnings thereon shall be paid to the Servicer as additional servicing compensation. Funds deposited in the Certificate Account (exclusive of the Servicing Fee) shall be held in trust for the Certificateholders and for the uses and purposes set forth in Section 2.01, Section 3.04, Section 3.05, Section 4.01 and Section 4.04.

Certificateholder or Holder : With respect to the Certificates, 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 Company, the Servicer 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; provided , that the Trustee may conclusively rely upon an Officer’s Certificate to determine whether any Person is an affiliate of the Company or the Servicer. With respect to the REMIC I Regular Interests, the owner of the REMIC I Regular Interests, which as of the Closing Date shall be the Trust.

Certificate Group : The Group 1-A Certificates or Group 2-A Certificates, as applicable.

Certificate Interest Rate : For each Class of REMIC I Regular Interests, REMIC II Regular Interests and REMIC III Regular Interests and the Class R-1 Residual Interest, the per annum rate set forth as the Certificate Interest Rate for such Class in the Preliminary Statement hereto.

Certificate of Trust : The certificate of trust filed with respect to the Trust with the Secretary of State in accordance with Section 3810(a) of the Statutory Trust Statute.

Certificate Principal Balance :  For each Certificate of any Class, the portion of the related Class Principal Balance, if any, represented by such Certificate.

Certificate Register and Certificate Registrar : The register maintained and the registrar appointed, respectively, pursuant to Section 5.03.

Class : All REMIC I Regular Interests or the Class R-1 Residual Interest having the same priority and rights to payments on the Group 1 and Group 2 Loans from the REMIC I Available Distribution Amount, all REMIC II Regular Interests or the Class R-2 Residual Interest having the same priority and rights to payments on the Group 3 Loans from the REMIC II Available Distribution Amount and all REMIC III Regular Interests or the Class R-3 Residual Interest having the same priority and rights to payments on the REMIC I Regular Interests from the REMIC III Available Distribution Amount, as applicable, which REMIC I Regular Interests, REMIC II Regular Interests, REMIC III Regular Interests and Class R Residual Interests, as applicable, shall be designated as a separate Class, and which, in the case of the Certificates (including the Class R Certificates representing ownership of the Class R Residual Interests), shall be set forth in the applicable forms of Certificates attached hereto as Exhibits A and B. Each Class of REMIC I Regular Interests and the Class R-1 Residual Interest shall be entitled to receive the amounts allocated to such Class pursuant to the definition of “REMIC I Distribution Amount” only to the extent of the REMIC I Available Distribution Amount for such Distribution Date remaining after distributions in accordance with prior clauses of the definition of “REMIC I Distribution Amount,” each Class of REMIC II Regular Interests and the Class R-2 Residual Interest shall be entitled to receive the amounts allocated to such Class pursuant to the definition of “REMIC II Distribution Amount” only to the extent of the REMIC II Available Distribution Amount for such Distribution Date remaining after distributions in accordance with prior clauses of the definition of “REMIC II Distribution Amount” and each Class of REMIC III Regular Interests and the Class R-3 Residual Interest shall be entitled to receive the amounts allocated to such Class pursuant to the definition of “REMIC III Distribution Amount” only to the extent of the REMIC III Available Distribution Amount for such Distribution Date remaining after distributions in accordance with prior clauses of the definition of “REMIC III Distribution Amount.”

Class 1-A1 Certificates :  The Certificates designated as “Class 1-A1” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 1-A2 Certificates :  The Certificates designated as “Class 1-A2” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A1 Certificates :  The Certificates designated as “Class 2-A1” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A2 Certificates :  The Certificates designated as “Class 2-A2” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A3 Certificates :  The Certificates designated as “Class 2-A3” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 2-A4 Certificates :  The Certificates designated as “Class 2-A4” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-A1 Certificates :  The Certificates designated as “Class 3-A1” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-A2 Certificates :  The Certificates designated as “Class 3-A2” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-A3 Certificates :  The Certificates designated as “Class 3-A3” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-A4 Certificates :  The Certificates designated as “Class 3-A4” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-B-1 Certificates :  The Certificates designated as “Class 3-B-1” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-B-2 Certificates :  The Certificates designated as “Class 3-B-2” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-B-3 Certificates :  The Certificates designated as “Class 3-B-3” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-B-4 Certificates :  The Certificates designated as “Class 3-B-4” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-B-5 Certificates :  The Certificates designated as “Class 3-B-5” on the face thereof in substantially the form attached hereto as Exhibit A.

Class 3-B-6 Certificates :  The Certificates designated as “Class 3-B-6” on the face thereof in substantially the form attached hereto as Exhibit A.

Class A Certificates :  The Group 1-A, Group 2-A and Group 3-A Certificates.

Class L-B-1 Certificates :  The Certificates designated as “Class L-B-1” on the face thereof in substantially the form attached hereto as Exhibit A.

Class L-B-2 Certificates :  The Certificates designated as “Class L-B-2” on the face thereof in substantially the form attached hereto as Exhibit A.

Class L-B-3 Certificates :  The Certificates designated as “Class L-B-3” on the face thereof in substantially the form attached hereto as Exhibit A.

Class L-B-4 Certificates :  The Certificates designated as “Class L-B-4” on the face thereof in substantially the form attached hereto as Exhibit A.

Class L-B-5 Certificates :  The Certificates designated as “Class L-B-5” on the face thereof in substantially the form attached hereto as Exhibit A.

Class L-B-6 Certificates :  The Certificates designated as “Class L-B-6” on the face thereof in substantially the form attached hereto as Exhibit A.

Class Principal Balance :  For any Class of REMIC I, REMIC II or REMIC III Regular Interests and for the Class R-1 Residual Interest, the applicable initial Class Principal Balance therefor set forth in the Preliminary Statement hereto (or, in the case of the Class R Certificates, the Class Principal Balance of the Class R-1 Residual Interest), corresponding to the rights of such Class in payments of principal due to be passed through to such Class from principal payments on the Mortgage Loans or the REMIC I Regular Interests, as applicable, as reduced from time to time by (x) distributions of principal to such Class and (y) the portion of Realized Losses allocated to the Class Principal Balance of such Class pursuant to the definition of “Realized Loss” with respect to a given Distribution Date.  For any Distribution Date, the reduction of the Class Principal Balance of any Class of Certificates and REMIC I Regular Interests pursuant to the definition of “Realized Loss” shall be deemed effective after the determination and distribution of principal on such Class pursuant to the definitions of “REMIC I Distribution Amount”, “REMIC II Distribution Amount” and “REMIC III Distribution Amount.”

Notwithstanding the foregoing, (A) any amounts distributed in respect of Realized Losses allocable to principal pursuant to paragraph (I)(C)(xix), (II)(A)(v) or (II)(B)(v) of the definition of “REMIC III Distribution Amount” shall not cause a reduction in the Class Principal Balances of the Group 1, Group 2 or Group L-B Certificates and (B) any amounts distributed in respect of Realized Losses allocable to principal pursuant to paragraph (I)(xxii) or (II)(iv) of the definition of “REMIC II Distribution Amount” shall not cause a reduction in the Class Principal Balances of the Group 3-A and Group 3-B Certificates. 

In addition to the foregoing, on each Distribution Date, the Class Principal Balance of the Class of Group L-B Certificates with the lowest priority then outstanding shall be increased by an amount equal to the lesser of (i) the Subsequent Recoveries for Loan Group 1 and Loan Group 2 for such Distribution Date and (ii) the amount of Realized Losses allocated to such Class on previous Distribution Dates (the amount in this clause (ii) reduced by the amount, if any, by which such Class Principal Balance has been increased on prior Distribution Dates pursuant to this paragraph).

In addition to the foregoing, on each Distribution Date, the Class Principal Balance of the Class of Group 3-B Certificates with the lowest priority then outstanding shall be increased by an amount equal to the lesser of (i) the Subsequent Recoveries for Loan Group 3 for such Distribution Date and (ii) the amount of Realized Losses allocated to such Class on previous Distribution Dates (the amount in this clause (ii) reduced by the amount, if any, by which such Class Principal Balance has been increased on prior Distribution Dates pursuant to this paragraph).

The Class Principal Balance for the Class 1-A1 Certificates shall be referred to as the “Class 1-A1 Principal Balance,” the Class Principal Balance for the Class 1-A2 Certificates shall be referred to as the “Class 1-A2 Principal Balance,” and so on.

Class R Certificates : The Certificates designated as “Class R” on the face thereof in substantially the form attached hereto as Exhibit B, representing ownership of the Class R-1, Class R-2 and Class R-3 Residual Interests, each of which Class of Residual Interests has been designated as the sole class of “residual interest” in REMIC I, REMIC II and REMIC III, respectively, pursuant to Section 2.06 and Section 2.13, as applicable, for purposes of Section 860G(a)(2) of the Code.

Class R Residual Interests : The Class R-1, Class R-2 and Class R-3 Residual Interests (which shall be transferable only as a unit evidenced by the Class R Certificates, in accordance with the applicable provisions of Section 5.01).

Class R-1 Residual Interest : The uncertificated undivided beneficial interest in REMIC I which has been designated as the single class of “residual interest” in REMIC I pursuant to Section 2.06.

Class R-2 Residual Interest : The uncertificated undivided beneficial interest in REMIC II which has been designated as the single class of “residual interest” in REMIC II pursuant to Section 2.06.

Class R-3 Residual Interest : The uncertificated undivided beneficial interest in REMIC III which has been designated as the single class of “residual interest” in REMIC III pursuant to Section 2.13.

Class Y Regular Interests : The Class Y-1 and Class Y-2 Regular Interests.

Class Y Principal Reduction Amounts :   For any Distribution Date, the amounts by which the Class Principal Balances of the Class Y-1 and Class Y-2 Regular Interests, respectively, will be reduced on such Distribution Date by the allocation of Realized Losses and the distribution of principal, determined as described in Appendix 1.

Class Y-1 Regular Interest : The uncertificated partial undivided beneficial ownership interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Y-1 Principal Distribution Amount :   For any Distribution Date, the excess, if any, of the Class Y-1 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-1 Regular Interest on such Distribution Date.

Class Y-2 Regular Interest :  The uncertificated partial undivided beneficial ownership interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Y-2 Principal Distribution Amount :    For any Distribution Date, the excess, if any, of the Class Y-2 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Y-2 Regular Interest on such Distribution Date.

Class Z Regular Interests : The Class Z-1 and Class Z-2 Regular Interests.

Class Z Principal Reduction Amounts : For any Distribution Date, the amounts by which the Class Principal Balances of the Class Z-1 and Class Z-2 Regular Interests, respectively, will be reduced on such Distribution Date by the allocation of Realized Losses and the distribution of principal, which shall be in each case the excess of (A) the sum of (x) the excess of the REMIC I Available Distribution Amount for the related Loan Group (i.e. the “related Loan Group” for the Class Z-1 Regular Interest is Loan Group 1 and the “related Loan Group” for the Class Z-2 Regular Interest is Loan Group 2) over the sum of the amounts thereof distributable (i) in respect of interest on such Class Z Regular Interest and the related Class Y Regular Interest, (ii) to such Class Z Regular Interest and the related Class Y Regular Interest pursuant to clause (c)(i) of the definition of “REMIC I Distribution Amount” and (iii) in the case of Loan Group 1, to the Class R‑1 Residual Interest and (y) the amount of Realized Losses allocable to principal for the related Loan Group over (B) the Class Y Principal Reduction Amount for the related Loan Group.

Class Z-1 Regular Interest : The uncertificated partial undivided beneficial ownership interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z-1 Principal Distribution Amount : or any Distribution Date, the excess, if any, of the Class Z-1 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-1 Regular Interest on such Distribution Date.

Class Z-2 Regular Interest : The uncertificated partial undivided beneficial ownership interest in REMIC I which constitutes a REMIC I Regular Interest and is entitled to distributions as set forth herein.

Class Z-2 Principal Distribution Amount : For any Distribution Date, the excess, if any, of the Class Z-2 Principal Reduction Amount for such Distribution Date over the principal portion of Realized Losses allocated to the Class Z-2 Regular Interest on such Distribution Date.

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

Closing Date : December 20, 2006.

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

Commission : The Securities and Exchange Commission.

Company : The meaning specified in the introductory paragraph hereof.

Compensating Interest : For any Distribution Date, with respect to each Loan Group and the Mortgage Loans contained therein, the least of (i) the sum of (a) 1/12 of 0.050% of the aggregate Principal Balance of such Mortgage Loans immediately before such Distribution Date , (b) the aggregate Payoff Earnings with respect to such Mortgage Loans for such Distribution Date and (c) the aggregate Payoff Interest with respect to such Mortgage Loans for such Distribution Date, (ii) the aggregate Uncollected Interest with respect to such Mortgage Loans for such Distribution Date and (iii) 1/12 of 0.125% of the aggregate Principal Balance of such Mortgage Loans immediately before such Distribution Date.

Complying Insurance Company : With respect to a transfer of a Certificate, a transferee that satisfies the following conditions: (i) such transferee is an insurance company, (ii) the source of funds used by it to acquire or hold such Certificate is an “insurance company general account” (within the meaning of Department of Labor Prohibited Transaction Class Exemption (“ PTCE ”) 95-60) and (iii) the conditions in Sections I and III of PTCE 95-60 have been satisfied.

Cooperative : A private cooperative housing corporation which owns or leases land and all or part of a building or buildings, including apartments, spaces used for commercial purposes and common areas therein and whose board of directors authorizes, among other things, the sale of Cooperative Stock.

Cooperative Apartment : A dwelling unit in a multi-dwelling building owned or leased by a Cooperative, which unit the Mortgagor has an exclusive right to occupy pursuant to the terms of a proprietary lease or occupancy agreement.

Cooperative Lease : With respect to a Cooperative Loan, the proprietary lease or occupancy agreement with respect to the Cooperative Apartment occupied by the Mortgagor and relating to the related Cooperative Stock, which lease or agreement confers an exclusive right to the holder of such Cooperative Stock to occupy such apartment.

Cooperative Loans :  Any of the Mortgage Loans made in respect of a Cooperative Apartment, evidenced by a Mortgage Note and secured by the related Cooperative Stock and the related Cooperative Lease, together with (i) the related Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) the related assignment or mortgage of the Cooperative Lease, (iv) the related financing statements, (v) the related stock power or other similar instrument and (vi) the related Recognition Agreement

Cooperative Stock :  With respect to a Cooperative Loan, the stock, partnership interest or other ownership instrument in the related Cooperative.

Cooperative Stock Certificate :  With respect to a Cooperative Loan, the stock certificate or other instrument evidencing the related Cooperative Stock.

Corporate Trust Office :  The corporate trust office of the Trustee, at which at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement is located at 135 South LaSalle Street, Suite 1511, Chicago, Illinois, 60603, Attention: Global Securities and Trust Services – WaMu Series 2006-AR18.

Corporation : Any Person (other than an individual, partnership, joint venture or unincorporated organization) incorporated, associated, organized, chartered or existing under the laws of any state or under the federal laws of the United States of America; provided , that such Person have indefinite existence under the law of its domicile.

Cumulative Carry-Forward Subsequent Recoveries Amount : For any Distribution Date and any of Loan Group 1, Loan Group 2 or Loan Group 3, the sum of (i) the Carry-Forward Subsequent Recoveries Amount for such Distribution Date for such Loan Group and (ii) the Carry-Forward Subsequent Recoveries Amounts for prior Distribution Dates for such Loan Group to the extent such Carry-Forward Subsequent Recoveries Amounts have not been applied in reduction of Realized Losses on prior Distribution Dates pursuant to the first paragraph of the definition of “Realized Loss” herein.

Current Loan-to-Value Ratio : The Principal Balance of a Mortgage Loan as of the applicable date of substitution divided by the Appraised Value.

Curtailment : Any payment of principal on a Mortgage 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 Mortgage Loan. (Prepayment penalties are not payments of principal and hence Curtailments do not include prepayment penalties.)

Curtailment Shortfall : For any Distribution Date and for any Curtailment received in the Prior Period, an amount equal to one month’s interest on such Curtailment at the Pass-Through Rate for the applicable Mortgage Loan.

Custodial Account for P&I : A custodial account for principal and interest established and maintained by the Servicer pursuant to Section 3.02 either (a) with the corporate trust department of the Trustee or another financial institution selected by the Servicer such that the rights of the Servicer, the Trustee, the Trust, the Delaware Trustee and the Certificateholders thereto shall be fully protected against the claims of any creditors or depositors of the institution in which such account is maintained, (b) within FDIC insured accounts created, maintained and monitored by the Servicer or (c) as a separate account at an Eligible Institution. In the event that a Custodial Account for P&I is established pursuant to clause (b) of the preceding sentence, amounts held in such Custodial Account for P&I shall not exceed the level of deposit insurance coverage on such account; accordingly, more than one Custodial Account for P&I may be established. In the event that a Custodial Account for P&I is established pursuant to clause (c) it shall be entitled "[Name of Servicer] in trust for holders of WaMu Mortgage Pass-Through Certificates, Series 2006-AR18."

Custodial Agreement : The agreement, if any, between the Trustee and a Custodian (or the Trustee, a Custodian and the Servicer) providing for the safekeeping of the Mortgage Files on behalf of the Trust.

Custodian : The Initial Custodian or a successor custodian which is appointed by the Trustee with the consent of the Servicer, as provided in Article II hereof, pursuant to a Custodial Agreement. Any Custodian shall act as agent on behalf of the Trustee.  The reasonable fees and expenses of the Custodian shall be paid by the Servicer.

Cut-Off Date : December 1, 2006.

Definitive Certificates : Certificates in definitive, fully registered and certificated form.

Delaware Trustee : Christiana Bank & Trust Company, or its successor-in-interest as provided in Section 8.09, or any successor trustee appointed as herein provided.

Depositary Agreement : The Letter of Representations, dated December 19, 2006 by and among DTC, the Trust and the Trustee. The Trustee is authorized to enter into the Depositary Agreement on behalf of the Trust.

Destroyed Mortgage Note : A Mortgage Note the original of which (or a portion of the original of which) was permanently lost or destroyed and has not been replaced.

Determination Date : A day not earlier than the 14th day and not later than the 18th day of the calendar month of the related Distribution Date, as determined by the Servicer.

Disqualified Organization :  Any Person which is not a Permitted Transferee, but does not include any Pass-Through Entity which owns or holds a Residual Certificate and of which a Disqualified Organization, directly or indirectly, may be a stockholder, partner or beneficiary.

Distribution Date : With respect to distributions on the REMIC I Regular Interests and the Certificates, 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 January 25, 2007.  The “related Due Date” for any Distribution Date is the Due Date immediately preceding such Distribution Date.

DTC : The Depository Trust Company.

DTC Participant : A Person for whom DTC effects book-entry transfers and pledges of securities deposited with DTC.

Due Date : The day on which the Monthly Payment for each Mortgage Loan is due.

Eligible Institution : An institution having (i) the highest short-term debt rating, and one of the two highest long-term debt ratings, of the Rating Agencies, (ii) with respect to any Custodial Account for P&I, an unsecured long-term debt rating of at least one of the two highest unsecured long-term debt ratings of the Rating Agencies, (iii) with respect to any Buydown Fund Account or Custodial Account which also serves as a Buydown Fund Account, the highest unsecured long-term debt rating by the Rating Agencies, or (iv) the approval of the Rating Agencies. Notwithstanding the foregoing, Washington Mutual Bank shall be an “Eligible Institution” if the following conditions are satisfied: (i) Washington Mutual Bank is acting as Servicer, (ii) if S&P is a Rating Agency as defined herein, the long-term unsecured debt obligations of Washington Mutual Bank are rated no lower than “A-” by S&P and the short-term unsecured debt obligations of Washington Mutual Bank are rated no lower than “A-2” by S&P, (iii) if Fitch is a Rating Agency as defined herein, the long-term unsecured debt obligations of Washington Mutual Bank are rated no lower than “A” by Fitch and the short-term unsecured debt obligations of Washington Mutual Bank are rated no lower than “F1” by Fitch and (iv) if Moody’s is a Rating Agency as defined herein, the long-term unsecured debt obligations of Washington Mutual Bank are rated no lower than “A2” by Moody’s and the short-term unsecured debt obligations of Washington Mutual Bank are rated no lower than “P-1” by Moody’s; provided, that if the long-term or short-term unsecured debt obligations of Washington Mutual Bank are downgraded by any of the Rating Agencies to a rating lower than the applicable rating specified in this sentence, Washington Mutual Bank shall cease to be an “Eligible Institution” ten Business Days after it receives notification of such downgrade.

Eligible Investments : The investment property or other property listed below:

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

(ii)                Repurchase agreements on obligations described in clause (i) of this definition of “Eligible Investments,” provided that the unsecured obligations of the party (including the institution acting as Trustee) agreeing to repurchase such obligations have at the time one of the two highest short term debt ratings  of the Rating Agencies and provided that such repurchaser’s unsecured long term debt has one of the two highest unsecured long term debt ratings of the Rating Agencies;

(iii)               Federal funds, certificates of deposit, time deposits and bankers’ acceptances of the institution acting as Trustee or any bank or trust company incorporated under the laws of the United States or any state, provided that the debt obligations of such bank or trust company (or, in the case of the principal bank in a bank holding company system, debt obligations of the bank holding company) at the date of acquisition thereof have one of the two highest short term debt ratings of the Rating Agencies and unsecured long term debt has one of the two highest unsecured long term debt ratings of the Rating Agencies;

(iv)              Obligations of, or obligations guaranteed by, any state of the United States or the District of Columbia, provided that such obligations at the date of acquisition thereof shall have the highest long-term debt ratings available for such securities from the Rating Agencies;

(v)                Commercial paper of any corporation incorporated under the laws of the United States or any state thereof, which on the date of acquisition has the highest commercial paper rating of the Rating Agencies, provided that the corporation has unsecured long term debt that has one of the two highest unsecured long term debt ratings of the Rating Agencies;

(vi)              Securities (other than stripped bonds or stripped coupons) bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States or any state thereof and have the highest long-term unsecured rating available for such securities from the Rating Agencies; 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 Investment Account or the Certificate Account to exceed 20% of the aggregate principal amount of all Eligible Investments then held in the Investment Account and the Certificate Account; and

(vii)             Units of taxable money market funds (which may be 12b-1 funds, as contemplated under the rules promulgated by the Commission under the Investment Company Act of 1940), which funds have the highest rating available for such securities from the Rating Agencies or which have been designated in writing by the Rating Agencies as Eligible Investments;

provided, however , that such investment property or other property is held for a temporary period pursuant to Section 1.860G-2(g)(1) of the Treasury Regulations, and that such period can in no event exceed thirteen months.

In no event shall an instrument or security be an Eligible Investment if such instrument or security (a) evidences a right to receive only interest payments with respect to the obligations underlying such instrument or (b) has been purchased at a price greater than the outstanding principal balance of such instrument.

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

ERISA Restricted Certificate : Any Senior Subordinate Certificate.

ERISA Super Restricted Certificate : Any Junior Subordinate Certificate.

Event of Default : The meaning specified in Section 7.01.

Excess Liquidation Proceeds : With respect to any Distribution Date, the Groups 1-2 Excess Liquidation Proceeds and the Group 3 Excess Liquidation Proceeds for such Distribution Date.

Excess Subsequent Recoveries : For any Distribution Date and any Loan Group, the excess, if any, of (i) amounts received by the Servicer during the Prior Period in connection with the liquidation of defaulted Mortgage Loans in such Loan Group after such Mortgage Loans became Liquidated Mortgage Loans over (ii) the Subsequent Recoveries (other than any Repurchase Proceeds included therein) for such Loan Group for such Distribution Date.

Fannie Mae : The Federal National Mortgage Association and any successor thereto.

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

FHA : The Federal Housing Administration, or any successor thereto.

Final Maturity Date :  With respect to each Class of the REMIC I, REMIC II and REMIC III Regular Interests and the Residual Interests, the date set forth in the applicable table contained in the Preliminary Statement hereto.

Fitch : Fitch, Inc. (or its successor in interest thereto), provided that at the applicable time it is a Rating Agency.

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

Group 1 Certificates : The Group 1-A Certificates.

Group 1 Loans :  The Mortgage Loans designated on the Mortgage Loan Schedule as Group 1 Loans.

Group 1 Senior Liquidation Amount : For any Distribution Date, the sum of (A) the aggregate, for each Group 1 Loan which became a Liquidated Mortgage Loan during the Prior Period, of the lesser of: (i) the Group 1 Senior Percentage of the Principal Balance of such Mortgage Loan immediately before such Distribution Date and (ii) the Group 1 Senior Prepayment Percentage of the Liquidation Principal with respect to such Mortgage Loan and (B) the Group 1 Senior Prepayment Percentage of any Subsequent Recoveries for Loan Group 1.

Group 1 Senior Percentage : For any Distribution Date, the lesser of (i) 100% and (ii) the aggregate Class Principal Balance of the Group 1-A and Residual Certificates divided by the aggregate Principal Balance of the Group 1 Loans, in each case immediately before such Distribution Date.

Group 1 Senior Prepayment Percentage or Group 2 Senior Prepayment Percentage :  Subject to the immediately succeeding paragraph, (A) for any Distribution Date prior to the seventh anniversary of the first Distribution Date, each of the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal 100% and (B) for any Distribution Date on or after the seventh anniversary of the first Distribution Date, the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall be calculated as follows: (1) for any such Distribution Date on or after the seventh anniversary but before the eighth anniversary of the first Distribution Date, the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date plus 70% of the Subordinate Percentage for the related Loan Group for such Distribution Date; (2) for any such Distribution Date on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date plus 60% of the Subordinate Percentage for the related Loan Group for such Distribution Date; (3) for any such Distribution Date on or after the ninth anniversary but before the tenth anniversary of the first Distribution Date, the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date plus 40% of the Subordinate Percentage for the related Loan Group for such Distribution Date; (4) for any such Distribution Date on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date plus 20% of the Subordinate Percentage for the related Loan Group for such Distribution Date; and (5) for any such Distribution Date thereafter, the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date; provided, however, that (x) for any Distribution Date on or prior to the Distribution Date in December 2009, if (i) the Group L-B Percentage for such Distribution Date is greater than or equal to twice the Group L-B Percentage as of the Closing Date and (ii) cumulative Realized Losses on the Group 1 and Group 2 Loans allocated to the Group L-B Certificates, as a percentage of the aggregate Class Principal Balance of the Group L-B Certificates as of the Closing Date, do not exceed 20%, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date plus 50% of the Subordinate Percentage for the related Loan Group for such Distribution Date and (y) for any Distribution Date after the Distribution Date in December 2009, if (i) the Group L-B Percentage for such Distribution Date is greater than or equal to twice the Group L-B Percentage as of the Closing Date and (ii) cumulative Realized Losses on the Group 1 and Group 2 Loans allocated to the Group L-B Certificates, as a percentage of the aggregate Class Principal Balance of the Group L-B Certificates as of the Closing Date, do not exceed 30%, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for such Distribution Date.

Notwithstanding the immediately preceding paragraph, (A) for any Distribution Date, if the Group 1 Senior Percentage for such Distribution Date is greater than the Group 1 Senior Percentage as of the Closing Date or the Group 2 Senior Percentage for such Distribution Date is greater than the Group 2 Senior Percentage as of the Closing Date, then each of the Group 1 Senior Prepayment Percentage and Group 2 Senior Prepayment Percentage shall equal 100%, (B) for any Distribution Date on or before the seventh anniversary of the first Distribution Date, if any of the tests specified in clauses (a) through (d) below is met, then each of the Group 1 Senior Prepayment Percentage and Group 2 Senior Prepayment Percentage shall equal 100% and (C) for any Distribution Date after the seventh anniversary of the first Distribution Date, if any of the tests specified in clauses (a) through (d) below is met (unless either (w) the Group 1 Senior Percentage for such Distribution Date is greater than the Group 1 Senior Percentage as of the Closing Date, (x) the Group 2 Senior Percentage for such Distribution Date is greater than the Group 2 Senior Percentage as of the Closing Date or (y) there is no Groups 1 & 2 Earlier Distribution Date (as defined below), in each of which case each of the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal 100%), then each of the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall be calculated as follows:  (1) if the most recent preceding Distribution Date on which none of the tests specified in clauses (a) through (d) below was met (such date referred to as the “ Groups 1 & 2 Earlier Distribution Date ”) is on or after the seventh anniversary but before the eighth anniversary of the first Distribution Date, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for the current Distribution Date plus 70% of the Subordinate Percentage for the related Loan Group for the current Distribution Date, (2) if the Groups 1 & 2 Earlier Distribution Date is on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for the current Distribution Date plus 60% of the Subordinate Percentage for the related Loan Group for the current Distribution Date, (3) if the Groups 1 & 2 Earlier Distribution Date is on or after the ninth  anniversary but before the tenth anniversary of the first Distribution Date, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for the current Distribution Date plus 40% of the Subordinate Percentage for the related Loan Group for the current Distribution Date, (4) if the Groups 1 & 2 Earlier Distribution Date is on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for the current Distribution Date plus 20% of the Subordinate Percentage for the related Loan Group for the current Distribution Date, and (5) if the Groups 1 & 2 Earlier Distribution Date is on or after the eleventh anniversary of the first Distribution Date, then the Group 1 Senior Prepayment Percentage and the Group 2 Senior Prepayment Percentage shall equal the Group 1 Senior Percentage or the Group 2 Senior Percentage, as applicable, for the current Distribution Date:

(a)        the mean aggregate Principal Balance, as of the Distribution Date in each of the immediately preceding six calendar months, of the Group 1 Loans which were 60 or more days delinquent as of such date (including Mortgage Loans in bankruptcy or foreclosure and Mortgaged Properties held by REMIC I) is greater than 50% of the Subordinate Component Balance for Loan Group 1 as of the current Distribution Date,

(b)        the mean aggregate Principal Balance, as of the Distribution Date in each of the immediately preceding six calendar months, of the Group 2 Loans which were 60 or more days delinquent as of such date (including Mortgage Loans in bankruptcy or foreclosure and Mortgaged Properties held by REMIC I) is greater than 50% of the Subordinate Component Balance for Loan Group 2 as of the current Distribution Date,

(c)        cumulative Realized Losses on the Group 1 Loans allocated to the Group L-B Certificates, as a percentage of the Subordinate Component Balance for Loan Group 1 as of the Closing Date, are greater than, for any Distribution Date (1) before the eighth anniversary of the first Distribution Date, 30%, (2) on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, 35%, (3) on or after the ninth anniversary but before the tenth anniversary of the first Distribution Date, 40%, (4) on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, 45%, and (5) on or after the eleventh anniversary of the first Distribution Date, 50% or

(d)        cumulative Realized Losses on the Group 2 Loans allocated to the Group L-B Certificates, as a percentage of the Subordinate Component Balance for Loan Group 2 as of the Closing Date, are greater than, for any Distribution Date (1) before the eighth anniversary of the first Distribution Date, 30%, (2) on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, 35%, (3) on or after the ninth anniversary but before the tenth anniversary of the first Distribution Date, 40%, (4) on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, 45%, and (5) on or after the eleventh anniversary of the first Distribution Date, 50%.

If on any Distribution Date the allocation to the Group 1-A or Group 2-A Certificates of Principal Prepayments in the percentage required would reduce the aggregate Class Principal Balance of such Certificates below zero, the Group 1 Senior Prepayment Percentage or the Group 2 Senior Prepayment Percentage, as applicable, for such Distribution Date shall be limited to the percentage necessary to reduce such aggregate Class Principal Balance to zero.

Group 1 Senior Principal Distribution Amount :  For any Distribution Date, an amount equal to the sum of (a) the Group 1 Senior Percentage of the Principal Payment Amount for Loan Group 1, (b) the Group 1 Senior Prepayment Percentage of the Principal Prepayment Amount for Loan Group 1 and (c) the Group 1 Senior Liquidation Amount.

Group 1 Subordinate Balance :  For any date of determination, an amount equal to the then outstanding aggregate Principal Balance of the Group 1 Loans reduced by the aggregate Class Principal Balance of the Group 1-A and Residual Certificates.

Group 1 Subordinate Percentage : For any Distribution Date, the excess of 100% over the Group 1 Senior Percentage for such date.

Group 1 Subordinate Prepayment Percentage :  For any Distribution Date, the excess of 100% over the Group 1 Senior Prepayment Percentage for such Distribution Date; provided, however, that if the aggregate Class Principal Balance of the Group 1-A and Residual Certificates has been reduced to zero, then the Group 1 Subordinate Prepayment Percentage shall equal 100%.

Group 1-A Certificates : The Class 1-A1 and Class 1-A2 Certificates.

Group 2 Certificates : The Group 2-A Certificates.

Group 2 Loans :  The Mortgage Loans designated on the Mortgage Loan Schedule as Group 2 Loans.

Group 2 Senior Liquidation Amount : For any Distribution Date, the sum of (A) the aggregate, for each Group 2 Loan which became a Liquidated Mortgage Loan during the Prior Period, of the lesser of: (i) the Group 2 Senior Percentage of the Principal Balance of such Mortgage Loan immediately before such Distribution Date and (ii) the Group 2 Senior Prepayment Percentage of the Liquidation Principal with respect to such Mortgage Loan and (B) the Group 2 Senior Prepayment Percentage of any Subsequent Recoveries for Loan Group 2.

Group 2 Senior Percentage : For any Distribution Date, the lesser of (i) 100% and (ii) the aggregate Class Principal Balance of the Group 2-A Certificates divided by the aggregate Principal Balance of the Group 2 Loans, in each case immediately before such Distribution Date.

Group 2 Senior Prepayment Percentage :  See the definition of “Group 1 Senior Prepayment Percentage or Group 2 Senior Prepayment Percentage”.

Group 2 Senior Principal Distribution Amount :  For any Distribution Date, an amount equal to the sum of (a) the Group 2 Senior Percentage of the Principal Payment Amount for Loan Group 2, (b) the Group 2 Senior Prepayment Percentage of the Principal Prepayment Amount for Loan Group 2 and (c) the Group 2 Senior Liquidation Amount.

Group 2 Subordinate Balance :  For any date of determination, an amount equal to the then outstanding aggregate Principal Balance of the Group 2 Loans reduced by the sum of (i) the aggregate Class Principal Balance of the Group 2-A Certificates.

Group 2 Subordinate Percentage : For any Distribution Date, the excess of 100% over the Group 2 Senior Percentage for such date.

Group 2 Subordinate Prepayment Percentage :  For any Distribution Date, the excess of 100% over the Group 2 Senior Prepayment Percentage for such Distribution Date; provided, however, that if the aggregate Class Principal Balance of the Group 2-A Certificates has been reduced to zero, then the Group 2 Subordinate Prepayment Percentage shall equal 100%.

Group 2-A Certificates : The Class 2-A1, Class 2-A2, Class 2-A3 and Class 2-A4 Certificates.

Group 3 Certificates : The Group 3-A and Class 3-B Certificates.

Group 3 Clean-Up Call Option Date :  The date on which the aggregate principal balance of the Group 3 Loans has been reduced to less than the Group 3 Clean-Up Call Percentage of that balance as of the Cut-Off Date.

Group 3 Clean-Up Call Percentage : 10%.

Group 3 Credit Support Depletion Date : The first Distribution Date on which the aggregate Class Principal Balance of the Group 3-B Certificates has been or will be reduced to zero as a result of principal distributions thereon and the allocation of Realized Losses on such Distribution Date.

Group 3 Excess Liquidation Proceeds : With respect to any Distribution Date, the sum of (i) the excess, if any, of aggregate Liquidation Proceeds and Insurance Proceeds received with respect to the Group 3 Loans during the Prior Period over the amount that would have been received if Payoffs had been made with respect to such Mortgage Loans during such Prior Period and (ii) any Excess Subsequent Recoveries for Loan Group 3 for such Distribution Date.

Group 3 Loans :  The Mortgage Loans designated on the Mortgage Loan Schedule as Group 3 Loans.

Group 3 Senior Liquidation Amount : For any Distribution Date, the sum of (A) the aggregate, for each Group 3 Loan which became a Liquidated Mortgage Loan during the Prior Period, of the lesser of: (i) the Group 3 Senior Percentage of the Principal Balance of such Mortgage Loan immediately before such Distribution Date and (ii) the Group 3 Senior Prepayment Percentage of the Liquidation Principal with respect to such Mortgage Loan and (B) the Group 3 Senior Prepayment Percentage of any Subsequent Recoveries for Loan Group 3.

Group 3 Senior Percentage : For any Distribution Date, the lesser of (i) 100% and (ii) the aggregate Class Principal Balance of the Group 3-A Certificates divided by the aggregate Principal Balance of the Group 3 Loans, in each case immediately before such Distribution Date.

Group 3 Senior Prepayment Percentage :  Subject to the immediately succeeding paragraph, (A) for any Distribution Date prior to the seventh anniversary of the first Distribution Date, the Group 3 Senior Prepayment Percentage shall equal 100% and (B) for any Distribution Date on or after the seventh anniversary of the first Distribution Date, the Group 3 Senior Prepayment Percentage shall be calculated as follows: (1) for any such Distribution Date on or after the seventh anniversary but before the eighth anniversary of the first Distribution Date, the Group 3 Senior Percentage for such Distribution Date plus 70% of the Group 3 Subordinate Percentage for such Distribution Date; (2) for any such Distribution Date on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, the Group 3 Senior Percentage for such Distribution Date plus 60% of the Group 3 Subordinate Percentage for such Distribution Date; (3) for any such Distribution Date on or after the ninth anniversary but before the tenth anniversary of the first Distribution Date, the Group 3 Senior Percentage for such Distribution Date plus 40% of the Group 3 Subordinate Percentage for such Distribution Date; (4) for any such Distribution Date on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, the Group 3 Senior Percentage for such Distribution Date plus 20% of the Group 3 Subordinate Percentage for such Distribution Date; and (5) for any such Distribution Date thereafter, the Group 3 Senior Percentage for such Distribution Date; provided, however, that (x) for any Distribution Date on or prior to the Distribution Date in December 2009, if (i) the Group 3 Subordinate Percentage for such Distribution Date is greater than or equal to twice the Group 3 Subordinate Percentage as of the Closing Date and (ii) cumulative Realized Losses on the Group 3 Loans allocated to the Group 3-B Certificates, as a percentage of the aggregate Class Principal Balance of the Group 3-B Certificates as of the Closing Date, do not exceed 20%, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for such Distribution Date plus 50% of the Group 3 Subordinate Percentage for such Distribution Date and (y) for any Distribution Date after the Distribution Date in December 2009, if (i) the Group 3 Subordinate Percentage for such Distribution Date is greater than or equal to twice the Group 3 Subordinate Percentage as of the Closing Date and (ii) cumulative Realized Losses on the Group 3 Loans allocated to the Group 3-B Certificates, as a percentage of the aggregate Class Principal Balance of the Group 3-B Certificates as of the Closing Date, do not exceed 30%, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for such Distribution Date.

Notwithstanding the immediately preceding paragraph, (A) for any Distribution Date, if the Group 3 Senior Percentage for such Distribution Date is greater than the Group 3 Senior Percentage as of the Closing Date, then the Group 3 Senior Prepayment Percentage shall equal 100%, (B) for any Distribution Date on or before the seventh anniversary of the first Distribution Date, if any of the tests specified in clauses (a) and (b) below is met, then the Group 3 Senior Prepayment Percentage shall equal 100% and (C) for any Distribution Date after the seventh anniversary of the first Distribution Date, if any of the tests specified in clauses (a) and (b) below is met (unless either (x) the Group 3 Senior Percentage for such Distribution Date is greater than the Group 3 Senior Percentage as of the Closing Date or (y) there is no Group 3 Earlier Distribution Date (as defined below), in each of which case the Group 3 Senior Prepayment Percentage shall equal 100%), then the Group 3 Senior Prepayment Percentage shall be calculated as follows:  (1) if the most recent preceding Distribution Date on which none of the tests specified in clauses (a) and (b) below was met (such date referred to as the “ Group 3 Earlier Distribution Date ”) is on or after the seventh anniversary but before the eighth anniversary of the first Distribution Date, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for the current Distribution Date plus 70% of the Group 3 Subordinate Percentage for the current Distribution Date, (2) if the Group 3 Earlier Distribution Date is on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for the current Distribution Date plus 60% of the Group 3 Subordinate Percentage for the current Distribution Date, (3) if the Group 3 Earlier Distribution Date is on or after the ninth anniversary but before the tenth anniversary of the first Distribution Date, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for the current Distribution Date plus 40% of the Group 3 Subordinate Percentage for the current Distribution Date, (4) if the Group 3 Earlier Distribution Date is on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for the current Distribution Date plus 20% of the Group 3 Subordinate Percentage for the current Distribution Date, and (5) if the Group 3 Earlier Distribution Date is on or after the eleventh anniversary of the first Distribution Date, then the Group 3 Senior Prepayment Percentage shall equal the Group 3 Senior Percentage for the current Distribution Date:

(a)        the mean aggregate Principal Balance, as of the Distribution Date in each of the immediately preceding six calendar months, of the Group 3 Loans which were 60 or more days delinquent as of such date (including Mortgage Loans in bankruptcy or foreclosure and Mortgaged Properties held by REMIC II) is greater than 50% of the aggregate Class Principal Balance of the Group 3-B Certificates as of the current Distribution Date, or

(b)        cumulative Realized Losses on the Group 3 Loans allocated to the Group 3-B Certificates, as a percentage of the aggregate Class Principal Balance of the Group 3-B Certificates as of the Closing Date, are greater than, for any Distribution Date (1) before the eighth anniversary of the first Distribution Date, 30%, (2) on or after the eighth anniversary but before the ninth anniversary of the first Distribution Date, 35%, (3) on or after the ninth anniversary but before the tenth anniversary of the first Distribution Date, 40%, (4) on or after the tenth anniversary but before the eleventh anniversary of the first Distribution Date, 45%, and (5) on or after the eleventh anniversary of the first Distribution Date, 50%.

If on any Distribution Date the allocation to the Group 3-A Certificates of Principal Prepayments in the percentage required would reduce the aggregate Class Principal Balance of such Certificates below zero, the Group 3 Senior Prepayment Percentage for such Distribution Date shall be limited to the percentage necessary to reduce such aggregate Class Principal Balance to zero.

Group 3 Senior Principal Distribution Amount :  For any Distribution Date, an amount equal to the sum of (a) the Group 3 Senior Percentage of the Principal Payment Amount for Loan Group 3, (b) the Group 3 Senior Prepayment Percentage of the Principal Prepayment Amount for Loan Group 3 and (c) the Group 3 Senior Liquidation Amount.

Group 3 Subordinate Liquidation Amount :  For any Distribution Date, the excess, if any, of the sum of (A) the aggregate Liquidation Principal for all Group 3 Loans which became Liquidated Mortgage Loans during the Prior Period and (B) any Subsequent Recoveries for such Distribution Date for Loan Group 3, over the Group 3 Senior Liquidation Amount for such Distribution Date.

Group 3 Subordinate Percentage : For any Distribution Date, the excess of 100% over the Group 3 Senior Percentage for such date.

Group 3 Subordinate Prepayment Percentage :  For any Distribution Date, the excess of 100% over the Group 3 Senior Prepayment Percentage for such Distribution Date; provided, however, that if the aggregate Class Principal Balance of the Group 3-A Certificates has been reduced to zero, then the Group 3 Subordinate Prepayment Percentage shall equal 100%.

Group 3 Subordinate Principal Distribution Amount :  For any Distribution Date, the sum of (i) the Group 3 Subordinate Percentage of the Principal Payment Amount for Loan Group 3, (ii) the Group 3 Subordinate Principal Prepayments Distribution Amount and (iii) the Group 3 Subordinate Liquidation Amount.

For any Distribution Date, the Group 3 Subordinat