POOLING AND SERVICING AGREEMENT

 

EXECUTION COPY

 

 

 

 

 

BOND SECURITIZATION, L.L.C.,
Depositor

CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller

LITTON LOAN SERVICING LP,
Servicer

and

U.S. BANK NATIONAL ASSOCIATION,
Trustee

POOLING AND SERVICING AGREEMENT

Dated as of January 1, 2007

C-BASS 2007-CB1 Trust

C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1

 

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS

12

Section 1.01

Defined Terms .

12

Section 1.02

Accounting .

52

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND

WARRANTIES

52

Section 2.01

Conveyance of Mortgage Loans .

52

Section 2.02

Acceptance by Trustee of the Mortgage Loans .

54

Section 2.03

Repurchase or Substitution of Mortgage Loans by the Seller .

56

Section 2.04

Representations and Warranties of the Seller with Respect to the

Mortgage Loans .

59

Section 2.05

Representations, Warranties and Covenants of the Servicer .

60

Section 2.06

Representations and Warranties of the Seller .

61

Section 2.07

Covenants of the Seller .

63

Section 2.08

Execution and Delivery of Certificates.

64

Section 2.09

Representations and Warranties of the Depositor.

64

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

66

Section 3.01

Servicer to Service the Mortgage Loans .

66

Section 3.02

Subservicing Agreements between the Servicer and Subservicers.

68

Section 3.03

Successor Subservicers.

70

Section 3.04

Liability of the Servicer.

70

Section 3.05

No Contractual Relationship between Subservicers and the Trustee.

72

Section 3.06

Assumption or Termination of Subservicing Agreements by Trustee.

72

Section 3.07

Collection of Mortgage Loan Payments .

72

Section 3.08

Subservicing Accounts.

73

Section 3.09

Collection Account and  Distribution Account .

73

Section 3.10

Permitted Withdrawals From the Collection Account .

75

Section 3.11

Establishment of Escrow Accounts; Deposits in Escrow Account .

76

Section 3.12

Permitted Withdrawals From Escrow Account .

76

Section 3.13

Payment of Taxes, Insurance and Other Charges; Collections

Thereunder .

77

Section 3.14

Investment of Funds in the Collection Account and Distribution

Account.

78

Section 3.15

Maintenance of Hazard Insurance and Errors and Omissions and Fidelity

Coverage .

79

Section 3.16

Enforcement of Due-On-Sale Clauses; Assumption Agreements.

80

Section 3.17

Realization upon Defaulted Mortgage Loans.

81

Section 3.18

Release of Mortgage Files.

83

Section 3.19

Title, Management and Disposition of REO Property .

84

Section 3.20

Notification of Adjustments .

86

Section 3.21

Access to Certain Documentation and Information Regarding the

Mortgage Loans.

86

Section 3.22

[ Reserved ].

87

Section 3.23

Servicing Compensation.

87

Section 3.24

Annual Statement as to Compliance.

87

Section 3.25

Assessment of Compliance with Servicing Criteria; Independent Public

Accountant’s Attestation.

87

Section 3.26

Trustee to Act as Servicer.

89

Section 3.27

Compensating Interest.

90

Section 3.28

Credit Reporting; Gramm-Leach-Bliley Act.

90

Section 3.29

Optional Purchases of Mortgage Loans by Servicer .

90

Section 3.30

Advance Facility .

91

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER

93

Section 4.01

Advances.

93

Section 4.02

Priorities of Distributions .

95

Section 4.03

Monthly Statements to Certificateholders .

101

Section 4.04

Allocation of Losses .

104

Section 4.05

[Reserved].

105

Section 4.06

Distributions on Book-Entry Certificates .

105

Section 4.07

Supplemental Interest Trust .

105

ARTICLE V THE CERTIFICATES

108

Section 5.01

The Certificates .

108

Section 5.02

Certificate Registrar; Registration of Transfer and Exchange of

Certificates .

109

Section 5.03

Mutilated, Destroyed, Lost or Stolen Certificates .

115

Section 5.04

Persons Deemed Owners .

116

Section 5.05

Access to List of Certificateholders’ Names and Addresses.

116

Section 5.06

Maintenance of Office or Agency.

116

ARTICLE VI THE SELLER, THE SERVICER AND THE DEPOSITOR

117

Section 6.01

Liability of the Seller, the Servicer and the Depositor .

117

Section 6.02

Merger or Consolidation of, or Assumption of the Obligations of, the

Seller, the Servicer or the Depositor .

117

Section 6.03

Limitation on Liability of the Servicer and Others .

117

Section 6.04

Servicer Not to Resign .

118

Section 6.05

Delegation of Duties .

119

ARTICLE VII DEFAULT

119

Section 7.01

Servicer Events of Default .

119

Section 7.02

Trustee to Act; Appointment of Successor .

121

Section 7.03

Waiver of Defaults .

122

Section 7.04

Notification to Certificateholders .

122

ARTICLE VIII THE TRUSTEE

123

Section 8.01

Duties of Trustee .

123

Section 8.02

Certain Matters Affecting the Trustee .

124

Section 8.03

Trustee Not Liable for Certificates or Mortgage Loans .

125

Section 8.04

Trustee May Own Certificates .

126

Section 8.05

Seller to Pay Trustee Fees and Expenses .

126

Section 8.06

Eligibility Requirements for Trustee .

127

Section 8.07

Resignation or Removal of Trustee .

128

Section 8.08

Successor Trustee .

128

Section 8.09

Merger or Consolidation of Trustee .

129

Section 8.10

Appointment of Co-Trustee or Separate Trustee .

129

Section 8.11

Tax Matters .

130

Section 8.12

Periodic Filings.

133

Section 8.13

Trustee May Enforce Claims Without Possession of Certificates .

139

Section 8.14

Suits for Enforcement .

139

Section 8.15

Waiver of Bond Requirement .

139

Section 8.16

Waiver of Inventory, Accounting and Appraisal Requirement .

139

ARTICLE IX TERMINATION

140

Section 9.01

Termination upon Liquidation or Purchase of the Mortgage Loans .

140

Section 9.02

Final Distributions on the Certificates.

141

Section 9.03

Additional Termination Requirements .

142

ARTICLE X MISCELLANEOUS PROVISIONS

143

Section 10.01

Amendment .

143

Section 10.02

Recordation of Agreement; Counterparts .

144

Section 10.03

Governing Law; Jurisdiction .

144

Section 10.04

Intention of Parties.

145

Section 10.05

Notices .

145

Section 10.06

Severability of Provisions .

146

Section 10.07

Limitation on Rights of Certificateholders.

146

Section 10.08

Certificates Nonassessable and Fully Paid .

147

Section 10.09

Rule of Construction .

147

Section 10.10

Waiver of Jury Trial .

147

Section 10.11

Regulation AB Compliance; Intent of the Parties; Reasonableness .

148

 

 

 

EXHIBITS

Exhibit A

Form of Class AF Certificates

Exhibit B

Form of Class M Certificates

Exhibit C

Form of Class B Certificates

Exhibit D

Form of Class P Certificates

Exhibit E

Form of Class CE Certificates

Exhibit F

Form of Class R Certificates

Exhibit G

Request for Release

Exhibit H-1

Form of Initial Certification of Custodian

Exhibit H-2

Form of Final Certification of Custodian

Exhibit I

Form of Residual Certificate Transfer Affidavit

Exhibit J

Form of Transferor Certificate

Exhibit K

Forms of Investment Letters

Exhibit L

Form of Certification to be provided with Form 10-K

Exhibit M

Form of Certification to be provided by the Trustee to the Servicer

Exhibit N-1

Form of 1122(d) Servicing Criteria Letter

Exhibit N-2

Servicing Criteria (Exhibit A to 1122(d) Servicing Criteria Letter)

Exhibit O

Power of Attorney

Exhibit P

Mortgage Loan Purchase Agreement

Exhibit Q

Form of Swap Agreement

Exhibit R

Custodial Agreement

Exhibit S

Form 8-K Disclosure

Exhibit T

Form 10-D Disclosure

Exhibit U

Form 10-K Disclosure

Exhibit V

Additional Disclosure Notification

 

Schedule I

Mortgage Loan Schedule

 

 

 

This Pooling and Servicing Agreement is dated as of January 1, 2007 (the “Agreement”), among BOND SECURITIZATION, L.L.C., as depositor (the “Depositor”), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, a Delaware limited liability company, as seller (the “Seller”), LITTON LOAN SERVICING LP, a Delaware limited partnership, as servicer (the “Servicer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”).

PRELIMINARY STATEMENT

The Depositor intends to sell pass-through certificates (collectively, the “Certificates”), to be issued hereunder in multiple Classes, which in the aggregate will evidence the entire beneficial ownership interest in the Trust Fund created hereunder.  The Certificates will consist of twenty-two Classes of Certificates, designated as (i) the Class AF-1A, Class AF-1B, Class AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Certificates,  (iii) the Class B-1 and Class B-2 Certificates, (iv) the Class P Certificates, (v) the Class CE-1 and Class CE-2 Certificates, (vi) the Class R Certificates and (vii) the Class R-X Certificates.

The Depositor hereby assigns to the Trustee, acting on behalf of the Certificateholders its interests and rights in the Mortgage Loans.  As provided herein, for federal income tax purposes, the Trustee will elect to treat the segregated pools of assets subject to this Agreement (exclusive of the Basis Risk Reserve Fund, the Supplemental Interest Trust and the Swap Account) as ten real estate mortgage investment conduits (each, a “REMIC”): Subsidiary REMIC 1, Subsidiary REMIC 2, the Intermediate REMIC, the Master REMIC, the Class CE REMIC, the Class P REMIC, the Class M-7 REMIC, the Class M-8 REMIC and the two Class B REMICs. Subsidiary REMIC 1 will consist of (a) all of the assets constituting the Mortgage Loans, exclusive of any amounts payable to the Class CE-2 Certificates.  Subsidiary REMIC 1 will issue (1) the REMIC regular interests in Subsidiary REMIC 1 (the “Subsidiary REMIC 1 Regular Interests”) and (2) the SR1 Interest.  The Subsidiary REMIC 1 Regular Interests will be uncertificated and will represent the “regular interests” in Subsidiary REMIC 1 and the SR1 Interest will represent the single class of “residual interest” in Subsidiary REMIC 1.  Subsidiary REMIC 2 will consist of all amounts distributable in respect of the Class CE-2 Certificates.  Subsidiary REMIC 2 will issue (1) the Class CE-2 Certificates and (2) the SR2 Interest.

The Trustee will hold the Subsidiary REMIC 1 Regular Interests for the benefit of the Intermediate REMIC. The assets of the Intermediate REMIC will consist of the Subsidiary REMIC 1 Regular Interests and the interests in the Intermediate REMIC will be evidenced by (i) the Intermediate REMIC Regular Interests, which will be uncertificated and will represent the “regular interests” in the Intermediate REMIC and (ii) the IR Interest, which will represent the single class of “residual interest” in the Intermediate REMIC.

The Trustee will hold the Intermediate REMIC Regular Interests for the benefit of the Master REMIC. The assets of the Master REMIC will consist of the Intermediate REMIC Regular Interests and the interests in the Master REMIC will be evidenced by (i) the Regular Certificates (other than the Class CE-1, Class CE-2, Class P, Class M-7, Class M-8 and Class B Certificates), the Class CEM Interest, the Class PM Interest, the Class M-7M Interest, the Class M-8M Interest and the two Class BM Interests, which will represent the “regular interests” in the Master REMIC and (ii) the Class MR Interest, which will represent the single class of “residual interest” in the Master REMIC.

The Trustee will hold the Class CEM Interest in the Master REMIC for the benefit of the Class CE REMIC.  The assets of the Class CE REMIC will consist of the Class CEM Interest in the Master REMIC and interests in the Class CE REMIC will be evidenced by (i) the Class CE-1 Certificate, which will represent the “regular interests” in the Class CE REMIC and (ii) the Class CER-X Interest, which will represent the single class of “residual interest” in the Class CE REMIC.  

The Trustee will hold the Class PM Interest in the Master REMIC for the benefit of the Class P REMIC.  The assets of the Class P REMIC will consist of the Class PM Interest in the Master REMIC and interests in the Class P REMIC will be evidenced by (i) the Class P Certificate, which will represent the “regular interests” in the Class P REMIC and (ii) the Class PR-X Interest, which will represent the single class of “residual interest” in the Class P REMIC.

The Trustee will hold the Class M-7M Interest in the Master REMIC for the benefit of the Class M-7 REMIC.  The assets of the Class M-7 REMIC will consist of the Class M-7M Interest in the Master REMIC and interests in the Class M-7 REMIC will be evidenced by (i) the Class M-7 Certificate, which will represent the “regular interest” in the Class M-7 REMIC and (ii) the uncertificated Class M-7R Interest, which will represent the single class of “residual interest” in the Class M-7 REMIC.

The Trustee will hold the Class M-8M Interest in the Master REMIC for the benefit of the Class M-8 REMIC.  The assets of the Class M-8 REMIC will consist of the Class M-8M Interest in the Master REMIC and interests in the Class M-8 REMIC will be evidenced by (i) the Class M-8 Certificate, which will represent the “regular interest” in the Class M-8 REMIC and (ii) the uncertificated Class M-8R Interest, which will represent the single class of “residual interest” in the Class M-8 REMIC.

The Trustee will hold each Class BM Interest in the Master REMIC for the benefit of a separate Class B REMIC.  The assets of each Class B REMIC will consist of a single Class BM Interest in the Master REMIC and interests in each Class B REMIC will be evidenced by (i) a separately numbered Class B Certificate, which will represent the “regular interest” in that Class B REMIC and (ii) a separately numbered, uncertificated Class BR Interest, which will represent the single class of “residual interest” in that Class B REMIC.  

The Class R Certificates will represent ownership of the Class SR1, Class SR2, Class IR, and Class MR Interests, and the Class R-X Certificates will represent ownership of the residual interest in each of the Class CE REMIC, the Class P REMIC, the Class M-7 REMIC, the Class M-8 REMIC and the two Class B REMICs.  The “latest possible maturity date” for federal income tax purposes of all REMICs, and regular and residual interests created hereunder is the 36 ^th month following the month of the scheduled maturity of the Mortgage Loan held in the Trust Fund as of the Closing Date having the latest maturity date.

Subsidiary REMIC 1

The Subsidiary REMIC 1 Interests, each of which (except for the Class SR1 Interests) is hereby designated a REMIC regular interest for federal income tax purposes, will have the principal balances and pass-through rates as set forth in the following table:

Subsidiary REMIC 1 Lower Tier Class Designation	Initial Principal Balance	Subsidiary REMIC 1 Lower Tier Interest Rate
Class LT1-Pool	(1)	(1)
Class LT1-F1	$        2,738,395.36	(2)
Class LT1-V1	$        2,738,395.36	(3)
Class LT1-F2	$        3,247,376.09	(2)
Class LT1-V2	$        3,247,376.09	(3)
Class LT1-F3	$        3,743,473.47	(2)
Class LT1-V3	$        3,743,473.47	(3)
Class LT1-F4	$        4,210,145.19	(2)
Class LT1-V4	$        4,210,145.19	(3)
Class LT1-F5	$        4,635,553.65	(2)
Class LT1-V5	$        4,635,553.65	(3)
Class LT1-F6	$        4,924,158.64	(2)
Class LT1-V6	$        4,924,158.64	(3)
Class LT1-F7	$        5,092,842.41	(2)
Class LT1-V7	$        5,092,842.41	(3)
Class LT1-F8	$        5,132,591.13	(2)
Class LT1-V8	$        5,132,591.13	(3)
Class LT1-F9	$        5,063,883.83	(2)
Class LT1-V9	$        5,063,883.83	(3)
Class LT1-F10	$        4,905,140.24	(2)
Class LT1-V10	$        4,905,140.24	(3)
Class LT1-F11	$        4,691,932.74	(2)
Class LT1-V11	$        4,691,932.74	(3)
Class LT1-F12	$        4,480,217.63	(2)
Class LT1-V12	$        4,480,217.63	(3)
Class LT1-F13	$        4,304,734.35	(2)
Class LT1-V13	$        4,304,734.35	(3)
Class LT1-F14	$        4,202,403.08	(2)
Class LT1-V14	$        4,202,403.08	(3)
Class LT1-F15	$           289,652.22	(2)
Class LT1-V15	$           289,652.22	(3)
Class LT1-F16	$        3,577,890.83	(2)
Class LT1-V16	$        3,577,890.83	(3)
Class LT1-F17	$        2,322,700.47	(2)
Class LT1-V17	$        2,322,700.47	(3)
Class LT1-F18	$        1,498,559.92	(2)
Class LT1-V18	$        1,498,559.92	(3)
Class LT1-F19	$        1,443,922.11	(2)
Class LT1-V19	$        1,443,922.11	(3)
Class LT1-F20	$        1,391,317.97	(2)
Class LT1-V20	$        1,391,317.97	(3)
Class LT1-F21	$        1,590,575.08	(2)
Class LT1-V21	$        1,590,575.08	(3)
Class LT1-F22	$        1,276,806.10	(2)
Class LT1-V22	$        1,276,806.10	(3)
Class LT1-F23	$        1,230,757.09	(2)
Class LT1-V23	$        1,230,757.09	(3)
Class LT1-F24	$        1,186,392.09	(2)
Class LT1-V24	$        1,186,392.09	(3)
Class LT1-F25	$        1,143,647.99	(2)
Class LT1-V25	$        1,143,647.99	(3)
Class LT1-F26	$        1,142,842.99	(2)
Class LT1-V26	$        1,142,842.99	(3)
Class LT1-F27	$        1,060,341.20	(2)
Class LT1-V27	$        1,060,341.20	(3)
Class LT1-F28	$        1,022,252.76	(2)
Class LT1-V28	$        1,022,252.76	(3)
Class LT1-F29	$           985,547.49	(2)
Class LT1-V29	$           985,547.49	(3)
Class LT1-F30	$           950,174.13	(2)
Class LT1-V30	$           950,174.13	(3)
Class LT1-F31	$           916,083.41	(2)
Class LT1-V31	$           916,083.41	(3)
Class LT1-F32	$           883,227.92	(2)
Class LT1-V32	$           883,227.92	(3)
Class LT1-F33	$           851,562.07	(2)
Class LT1-V33	$           851,562.07	(3)
Class LT1-F34	$      22,982,898.41	(2)
Class LT1-V34(5)	$      22,982,898.41	(3)
Class SR1	(4)	(4)

______________

(1) This interest shall have an initial principal balance equal to (i) the aggregate of the Principal Balances of the Mortgage Loans as of the Cut-off Date minus (ii) the sum of the initial principal balances of the Lower Tier Interests in Subsidiary REMIC 1 containing the letters “V” or “F” in their class designations.  This interest shall bear interest at a per annum rate equal to the Net WAC Cap computed without regard to the Swap Agreement (the “REMIC Net WAC Rate”)

(2) For any Distribution Date (and the related Interest Accrual Period), the interest rate for each of these interests shall be the lesser of (i) the REMIC Swap Rate for such Distribution Date, and (ii) the product of (a) the REMIC Net WAC Rate and (b) 2.

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

(4) The Class SR1 Interest is the sole class of residual interest in Subsidiary REMIC 1.  It has no principal balance and pays no principal or interest.

(5) This Interest shall also be entitled to receive all Prepayment Charges payable on the Mortgage Loans.

On each Distribution Date, all expenses of the Trust for such Distribution Date (other than any expenses attributable to the Swap Agreement) shall be charged as an expense of Subsidiary REMIC 1.

On each Distribution Date, interest shall be allocated with respect to each of the Lower Tier Interests in Subsidiary REMIC 1 based on the above-described interest rates.

On each Distribution Date, principal shall be distributed among the Lower Tier Interests in Subsidiary REMIC 1 in the following order of priority: first to the Class LT1-Pool Interest until its principal balance is reduced to zero, and then sequentially, to the other Lower Tier Interests in Subsidiary REMIC 1 in ascending order of their numerical class designation, and, with respect to each pair of classes having the same numerical designation, in equal amounts to each such class, until the principal balance of each such class is reduced to zero.

All losses on the Mortgage Loans shall be allocated among the Lower Tier interests in Subsidiary REMIC 1 in the same manner that principal distributions are allocated.

The Intermediate REMIC

The following table sets forth Class Designation, the Initial Principal Balance, the Pass-Through Rate, and the Corresponding Master REMIC Class for each Intermediate REMIC Regular Interest each of which is hereby designated a REMIC regular interest for federal income tax purposes:

Intermediate REMIC I Class Designation	Intermediate REMIC I Interest Rate	Initial Class Principal Balance	Corresponding Class
Class LT2-AF-1A	(1)	(4)	AF-1A
Class LT2-AF-1B	(1)	(4)	AF-1B
Class LT2-AF-2	(1)	(4)	A-2
Class LT2-AF-3	(1)	(4)	A-3
Class LT2-AF-4	(1)	(4)	A-4
Class LT2-AF-5	(1)	(4)	A-5
Class LT2-AF-6	(1)	(4)	A-6
Class LT2-M-1	(1)	(4)	M-1
Class LT2-M-2	(1)	(4)	M-2
Class LT2-M-3	(1)	(4)	M-3
Class LT2-M-4	(1)	(4)	M-4
Class LT2-M-5	(1)	(4)	M-5
Class LT2-M-6	(1)	(4)	M-6
Class LT2-M-7	(1)	(4)	M-7
Class LT2-M-8	(1)	(4)	M-8
Class LT2-B-1	(1)	(4)	B-1
Class LT2-B-2	(1)	(4)	B-2
Class LT2-Q	(1)	(3)	N/A
Class LT2-Swap IO	(2)	(2)	N/A
Class IR	(5)	(5)	R

______________

(1) The interest rate for this interest for each Distribution Date (and the related Interest Accrual Period) is a per annum rate equal to the weighted average of the interest rates of the regular interests in Subsidiary REMIC 1 for such Distribution Date, weighted on the principal balances of such Subsidiary REMIC 1 Lower Tier Interests; provided, however, that for any Distribution Date on which the LT2-Swap IO Interest is entitled to a portion of the interest accruals on a Subsidiary REMIC 1 Lower Tier Interest having an “F” in its class designation, as described in footnote two below, such weighted average shall be computed by first subjecting the rate on such Subsidiary REMIC I Lower Tier Interest to a cap equal to the product of (a) Swap LIBOR and (b) 2 for such Distribution Date (the “Intermediate REMIC Rate”).

(2) The Class LT2-Swap IO is an interest-only Class and does not have a principal balance.  For the applicable Distribution Date listed in the first column in the table below, the Class LT2-Swap IO shall be entitled to interest accrued on each Lower Tier 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 each such Lower Tier Interest for such Distribution Date over (ii) product of (a) the Swap LIBOR and (b) 2 for such Distribution Date.

(3)

This interest shall have an initial principal balance equal to  (i) the aggregate of the initial principal balances of the interests in Subsidiary REMIC 1 minus (ii) the sum of the initial principal balances of the remaining Lower Tier Interests in the Intermediate REMIC.  This interest shall also be entitled to receive all Prepayment Charges payable on the Mortgage Loans.

(4)

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

(5)

The Class IR Interest is the sole class of residual interest in the Intermediate REMIC.  It does not have an interest rate or a principal balance.

On each Distribution Date, interest shall be allocated with respect to each of the Lower Tier Interests in the Intermediate REMIC based on the above-described interest rates, provided however, that interest that accrues on the Class LT2-Q Interest shall be deferred in an amount necessary to make the principal allocations described in the next paragraph.  Any interest so deferred shall itself bear interest at the interest rate for the Class LT2-Q Interest.  An amount equal to the interest so deferred shall be distributed as additional principal on the other Intermediate REMIC Lower Tier Interests having a principal balance in the manner described below.

On each Distribution Date, principal (together with an amount equal to the interest deferred on the Class LT2-Q Interest for such Distribution Date) shall be allocated, and Realized Losses shall be allocated, among the Lower Tier Interests in the Intermediate REMIC in the following order of priority:

(i)

First, to each of the Class LT2-AF-1A, Class LT2-AF-1B, Class LT2-AF-2, Class LT2-AF-3, Class LT2-AF-4, Class LT2-AF-5 and Class LT2-AF-6 Interests until the principal balance of each such Lower Tier Interest equals one-half of the Certificate Principal Balance of its corresponding Class of Certificates immediately after such Distribution Date;

(ii)

Second, sequentially, to the Class LT2-M-1, Class LT2-M-2, Class LT2-M-3, Class LT2-M-4, Class LT2-M-5, Class LT2-M-6, Class LT2-M-7, Class LT2-M-8, Class LT2-B-1 and Class LT2-B-2 Interests, until the principal balance of each such Lower Tier Interest equals one-half of the Certificate Principal Balance of its corresponding Class of Certificates immediately after such Distribution Date; and

(iii)

Third, to the Class LT2-Q Interest, any remaining amounts.

On each Distribution Date, the Prepayment Charges collected and received during the preceding Prepayment Period shall be allocated to the Class LT2-Q Interest.

The Master REMIC

The following table sets forth characteristics of the Certificates, together with the minimum denominations and integral multiples in excess thereof in which such Classes shall be issuable (except that one Certificate of each Class of Certificates may be issued in a different amount and, in addition, one Residual Certificate representing the Tax Matters Person Certificate may be issued in a different amount):

______________

(1) The lesser of (a) the Pass-Through Rate for the Class AF-1A Certificates and (b) the Net WAC Cap.

(2) The lesser of (a) the Pass-Through Rate for the Class AF-1B Certificates and (b) the Net WAC Cap.

(3) The lesser of (a) the Pass-Through Rate for the Class AF-2 Certificates and (b) the Net WAC Cap.

(4) The lesser of (a) the Pass-Through Rate for the Class AF-3 Certificates and (b) the Net WAC Cap.

(5) The lesser of (a) the Pass-Through Rate for the Class AF-4 Certificates and (b) the Net WAC Cap.

(6) The lesser of (a) the Pass-Through Rate for the Class AF-5 Certificates and (b) the Net WAC Cap.

(7) The lesser of (a) the Pass-Through Rate for the Class AF-6 Certificates and (b) the Net WAC Cap.

(8) The lesser of (a) the Pass-Through Rate for the Class M-1 Certificates and (b) the Net WAC Cap.

(9) The lesser of (a) the Pass-Through Rate for the Class M-2 Certificates and (b) the Net WAC Cap.

(10) The lesser of (a) the Pass-Through Rate for the Class M-3 Certificates and (b) the Net WAC Cap.

(11) The lesser of (a) the Pass-Through Rate for the Class M-4 Certificates and (b) the Net WAC Cap.

(12) The lesser of (a) the Pass-Through Rate for the Class M-5 Certificates and (b) the Net WAC Cap.

(13) The lesser of (a) the Pass-Through Rate for the Class M-6 Certificates and (b) the Net WAC Cap.

(14) The lesser of (a) the Pass-Through Rate for the Class M-7 Certificates and (b) the Net WAC Cap.

(15) The lesser of (a) the Pass-Through Rate for the Class M-8 Certificates and (b) the Net WAC Cap.

(16) The lesser of (a) the Pass-Through Rate for the Class B-1 Certificates and (b) the Net WAC Cap.

(17) The lesser of (a) the Pass-Through Rate for the Class B-2 Certificates and (b) the Net WAC Cap.

(18) This regular interest will be uncertificated and held by the Trustee in the manner described below.

(19) The Class MR Interest is the sole class of residual interest in the Master REMIC.  

(20) The Class CEM  Interest shall comprise three components, each of which is hereby designated as a regular interest in Master REMIC.  The first component is a principal-only component and represents the right to receive distributions from Master REMIC in an amount equal to the Overcollateralization Amount determined as of the Closing Date less $100.  The second component is an interest-only component and represents the right to receive on each Distribution Date interest accrued on the Lower-Tier Interests in the Intermediate REMIC (other than any interest-only interest) at a per annum rate equal to the excess, if any, of (i) the Intermediate REMIC Rate over (ii) the product of: (A) two and (B) the weighted average interest rate of the Intermediate REMIC Regular Interests (other than any interest-only regular interest), where the LT2-Q Interest is subject to a cap equal to zero and each remaining Intermediate REMIC Regular Interest is subject to a cap equal to the Pass-Through Rate on its Corresponding Class of Certificates, determined by substituting the Intermediate REMIC Rate for the Net WAC Cap.  The third component is an interest-only component and represents the right to receive all amounts distributable on the Class LT2-Swap IO Interest.

(21) The Class CE-2 Certificates are hereby designated as regular interests in Subsidiary REMIC 2 and do not represent any interest in any other REMIC formed hereby.

(22) The Class PM Interest is entitled to all Prepayment Charges.  In addition, the Class PM Interest (and the Class P Certificates) shall be entitled to receive $100.00.

(23) Any interest payable on this Class of Certificates reflecting an interest rate greater than the Intermediate REMIC Rate shall be treated as having been paid pursuant to the cap contract described in Section 8.11(l); and on any Distribution Date on which the Pass-Through Rate on a Class of Certificates is based on the  Net WAC Cap, the amount of interest that would have accrued on such Class of Certificates if the Intermediate REMIC Rate were substituted for the Net WAC Cap shall be treated as having been paid by the holders of the applicable Class of Certificates to the Swap Account, all pursuant to and as further provided in Section 8.11(l).

The Class P REMIC and the Class CE REMIC

The following table sets forth the characteristics of each of the Class CE REMIC, Class P REMIC and the characteristics of the corresponding regular interest and residual interest.

Corresponding REMIC	Designated Regular Interest	Designated Residual Interest	Corresponding Master REMIC Interest
Class CE	Class CE-1 Certificate (1)	Class CE-R (uncertificated)	Class CEM
Class P	Class P Certificate (1)	Class P-R (uncertificated)	Class PM

 

(1) This REMIC interest will have a principal and interest amount equal to the Corresponding Master REMIC Interest.  For each Distribution Date this REMIC interest will be entitled to all amounts payable on the Corresponding Master REMIC Interest.

The Class M-7 REMIC, Class M-8 REMIC and Class B REMICs

The following table sets forth the characteristics of the Class M-7 REMIC, the Class M-8 REMIC and each Class B REMIC and the characteristics of its corresponding regular interest and residual interest.

Corresponding  REMIC	Designated Regular Interest	Designated Residual Interest	Corresponding Master REMIC Interest
Class M-7	Class M-7 Certificate	Class M-7R (uncertificated)	Class M-7M
Class M-8	Class M-8 Certificate	Class M-8R (uncertificated)	Class M-8M
Class B-1	Class B-1 Certificate	Class B-1R (uncertificated)	Class BM-1
Class B-2	Class B-2 Certificate	Class B-2R (uncertificated)	Class BM-2

 

Each Designated Regular Interest will represent a REMIC regular interest in its Corresponding REMIC, will have a principal balance and interest rate identical to the principal balance and interest rate of its Corresponding Master REMIC Interest, and will have a minimum denomination of $100,000 and additional amounts in $1.00 increments.  Each Designated Regular Interest will be entitled to all amounts payable with respect to its Corresponding Master REMIC Interest.  Each Designated Residual Interest will represent the sole class of REMIC residual interest in its Corresponding REMIC and will not be entitled to any amounts payable with respect to its Corresponding Master REMIC Interest or otherwise.

The following provisions in the Preliminary Statement are intended to cause net interest and principal collections in respect of the Mortgage Loans to be distributed from the Subsidiary REMIC 1 to the Intermediate REMIC, from the Intermediate REMIC to the Master REMIC, from the Master REMIC to each Class of Certificates (other than the Class M-7, Class M-8, Class B, Class P and Class CE Certificates) and to the Class CE REMIC, the Class P REMIC, the Class M-7 REMIC, the Class M-8 REMIC and the two Class B REMICs, from the Class CE REMIC to the Class CE-1 Certificate, from the Class P REMIC to the Class P Certificates, from the Class M-7 REMIC to the Class M-7 Certificates, from the Class M-8 REMIC to the Class M-8 Certificates and from each Class B REMIC to the Class B Certificate that represents the Designated Regular Interest in that Class B REMIC.  The Preliminary Statement will be interpreted and applied consistently with such intent.

For any purpose for which the pass-through rates is calculated, the interest rate on the Mortgage Loans shall be appropriately adjusted to account for the difference between the monthly day count convention of the Mortgage Loans and the monthly day count convention of the regular interests issued by each of the REMICs.  For purposes of calculating the pass-through rates for each of the interests issued by the Subsidiary REMIC 1, the Intermediate REMIC, the Master REMIC and the Class CE REMIC, such rates shall be adjusted to equal a monthly day count convention based on the actual number of days in the preceding Collection Period and a 360-day year so that the Mortgage Loans and all regular interests will be using the same monthly day counting convention.

ARTICLE I

DEFINITIONS

Section 1.01

Defined Terms .

Whenever used in this Agreement or in the Preliminary Statement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article.  Unless otherwise specified, interest on the Floating Rate Certificates will be calculated on the basis of the actual number of days in the related Interest Accrual Period and a 360-day year.  Interest on the Fixed Rate Certificates and the Class P and Class CE Certificates will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

“40-Year Mortgage Loan”:  A Mortgage Loan which has a forty year original term to maturity.

“60+ Day Delinquent Loan”:  On any date of determination, each Mortgage Loan with respect to which any portion of a Monthly Payment is, as of the last day of the related Collection Period, two months or more past due, each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for which the Mortgagor has filed for bankruptcy after the Closing Date.

“Accepted Servicing Practices”:  With respect to any Mortgage Loan, those mortgage servicing practices set forth in Section 3.01(a) of this Agreement.

“Account”:  Any of the Collection Account, the Distribution Account, the Swap Account and the Basis Risk Reserve Fund.

“Accrued Certificate Interest”:  With respect to each Distribution Date and each Class of Floating Rate and Fixed Rate Certificates, an amount equal to the interest accrued at the applicable rate set forth or described opposite such Class in the table in the Preliminary Statement during the related Interest Accrual Period on the Certificate Principal Balance of such Class of Certificates immediately prior to such Distribution Date, reduced by such Class’ Interest Percentage of Relief Act Interest Shortfalls for such Distribution Date.

“Adjustable-Rate Mortgage Loan”:  A Mortgage Loan which has a rate at which interest accrues that adjusts based on an Index plus a related Gross Margin, as set forth and subject to the limitations in the related Mortgage Note.

“Adjustment Date”:  With respect to each Adjustable-Rate Mortgage Loan, each adjustment date, on which the Mortgage Interest Rate of an Adjustable-Rate Mortgage Loan changes pursuant to the related Mortgage Note.  The first Adjustment Date following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.

“Advance”:  Any P&I Advance or Servicing Advance.

“Advance Facility”:  As defined in Section 3.30 hereof.

“Advance Facility Notice”:  As defined in Section 3.30 hereof.

“Advance Financing Person”:  As defined in Section 3.30 hereof.

“Advance Reimbursement Amounts”:  As defined in Section 3.30 hereof.

“Adverse REMIC Event”:  As defined in Section 8.11(f) hereof.

“Affiliate”:  With respect to any Person, any other Person controlling, controlled by or under common control with such Person.  For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.

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

“Applied Realized Loss Amount”:  As defined in Section 4.04(a) hereof.

“Assignment”:  An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect or record the sale of the Mortgage.

“Available Funds”:  As to any Distribution Date, an amount equal to the excess of (i) the sum of (a) the aggregate of the Monthly Payments due during the related Collection Period and received by the Servicer on or prior to the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds, Principal Prepayments, Substitution Adjustment Amounts, the Purchase Price for any repurchased Mortgage Loan, the Termination Price with respect to the termination of the Trust pursuant to Section 9.01 hereof, any Reimbursement Amount or Subsequent Recovery deposited to the Collection Account and other unscheduled recoveries of principal and interest (excluding prepayment penalties) in respect of the Mortgage Loans during the related Prepayment Period, (c) the aggregate of any amounts received in respect of an REO Property withdrawn from any REO Account and deposited in the Collection Account for such Distribution Date, (d) any Compensating Interest for such Distribution Date, and (e) the aggregate of any Advances made by the Servicer for such Distribution Date over (ii) the sum of (a) amounts reimbursable or payable to the Servicer pursuant to Section 3.10 or to the Trustee pursuant to this Agreement, including without limitation Section 8.05, (b) Stayed Funds, (c) the Servicing Fee, (d) the Trustee Fee and (e) any amounts payable to the Swap Provider (including (1) the excess for such Distribution Date of any Net Swap Payment over any Net Swap Receipt and (2) any Swap Termination Payment owed to the Swap Provider but excluding any Defaulted Swap Termination Payment).

“Balloon Mortgage Loan”:  A Mortgage Loan that provides for the payment of a Balloon Payment at the maturity of such Mortgage Loan.

“Balloon Payment”:  A payment of the unamortized principal balance of a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding Monthly Payment.

“Bankruptcy Code”:  Title 11 of the United States Code, as amended.

“Basis Risk Reserve Fund”: The trust account created and maintained by the Trustee pursuant to Section 4.02(e) which shall be entitled “Basis Risk Reserve Fund, U.S. Bank National Association, as Trustee, in trust for registered Holders of C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1” and which must be an Eligible Account.  Amounts on deposit in the Basis Risk Reserve Fund shall not be invested.  The Basis Risk Reserve Fund shall not be an asset of any REMIC formed under this Agreement.

“Basis Risk Reserve Fund Deposit”:  With respect to each Distribution Date, an amount equal to the lesser of: (1) any Net WAC Cap Carryover Amounts for such Distribution Date that remain unpaid; and (2) any Monthly Excess Cashflow Amount remaining on such Distribution Date following the distributions pursuant to Section 4.02(b)–(xxxiii).

“Book-Entry Certificates”:  Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a Person maintaining an account with the Depository (directly, as a “Depository Participant,” or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 5.02 hereof).  On the Closing Date, the Class AF-1A, Class AF-1B, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class B-1 and Class B-2 Certificates shall be Book-Entry Certificates.

“Business Day”:  Any day other than a Saturday, a Sunday or a day on which banking and savings and loan institutions in the State of Delaware, the State of New York, the State in which the Servicer’s servicing operations are located, or any State in which the Trustee’s Corporate Trust Office is located are authorized or obligated by law or executive order to be closed.

“Certificate”:  Any Regular Certificate or Residual Certificate.

“Certificate Owner”:  With respect to each Book-Entry Certificate, any beneficial owner thereof.

“Certificate Principal Balance”:  With respect to any Class of Certificates (other than the Class CE-1, Class CE-2, Class P and Residual Certificates) and any Distribution Date, the Original Certificate Principal Balance plus any increases in the Certificate Principal Balance of such Certificate pursuant to Section 4.02(c) due to the receipt of Subsequent Recoveries reduced (but not below zero) by the sum of (i) all amounts actually distributed in respect of principal of such Class on all prior Distribution Dates and (ii) with respect to any class of Subordinate Certificates, Applied Realized Loss Amounts from previous Distribution Dates allocated thereto.  The Class CE-1, Class CE-2, Class P and Residual Certificates do not have a Certificate Principal Balance.  With respect to any Certificate (other than a Class CE, Class P or a Residual Certificate) of a Class and any Distribution Date, the portion of the Certificate Principal Balance of such Class represented by such Certificate equal to the product of the Percentage Interest evidenced by such Certificate and the Certificate Principal Balance of such Class.

“Certificate Register” and “Certificate Registrar”:  The register maintained and registrar appointed, respectively, pursuant to Section 5.02 hereof.

“Certificateholder” or “Holder”:  The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or Non-U.S. Person shall not be a Holder of a Residual Certificate for any purpose hereof.

 “Class”:  Collectively, Certificates or REMIC Regular Interests which have the same priority of payment and bear the same class designation and the form of which is identical except for variation in the Percentage Interest evidenced thereby.

“Class AF Certificates”:  The Class AF-1A, Class AF-1B, Class AF-2, Class AF-3, Class AF-4, Class AF-5 and Class AF-6 Certificates.

“Class AF-6 Lockout Distribution Amount”:  For any Distribution Date, the product of (x) the Class AF-6 Lockout Distribution Percentage for that Distribution Date and (y) the Class AF-6 Pro Rata Distribution Amount for that Distribution Date.

“Class AF-6 Lockout Distribution Percentage”: For a Distribution Date in any period listed in the table below, the applicable percentage listed opposite such period:

Distribution Dates	Lockout Percentage
February 2007 through and including January 2010	0%
February 2010 through and including January 2012	45%
February 2012 through and including January 2013	80%
February 2013 through and including January 2014	100%
February 2014 and thereafter	300%

 

“Class AF-6 Pro Rata Distribution Amount”: For any Distribution Date, an amount equal to the product of (x) a fraction, the numerator of which is the Certificate Principal Balance of the Class AF-6 Certificates immediately prior to that Distribution Date and the denominator of which is the aggregate Certificate Principal Balance of the Class AF Certificates immediately prior to that Distribution Date and (y) either (i) on any Distribution Date prior to the Stepdown Date or on which a Trigger Event is in effect, the Principal Distribution Amount for that Distribution Date or (ii) on any Distribution Date on or after the Stepdown Date and on which a Trigger Event is not in effect, the Senior Principal Distribution Amount for such Distribution Date.

 

“Class B Certificate”:  Any one of the Certificates with a “B” designated on the face thereof substantially in the form annexed hereto as Exhibit C, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

“Class B-1 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal Distribution Amount on such Distribution Date) and (viii) the Certificate Principal Balances of the B-1 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 92.70% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class B-2 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class B-1 Certificates (after taking into account the payment of the Class B-1 Principal Distribution Amount on such Distribution Date) and (ix) the Certificate Principal Balances of the B-2 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 94.80% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class CE Certificate”:  Any one of the Certificates with a “CE” designated on the face thereof substantially in the form annexed hereto as Exhibit E, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

“Class CE Distributable Amount”:  With respect to any Distribution Date, the aggregate of amounts distributable on the Class CEM Interest for such Distribution Date as provided in the Preliminary Statement.

“Class CE-2 Rate”: 0.35% per annum.

 “ Class CEM Interest”:  As defined in the Preliminary Statement.

“Class M Certificate”:  Any one of the Certificates with an “M” designated on the face thereof substantially in the form annexed hereto as Exhibit B, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

“Class M Certificateholders”:  Collectively, the Holders of the Class M Certificates.

“Class M-1/M-2/M-3 Principal Distribution Amount”:  As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date) and (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 76.40% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class M-4 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date) and (iii) the Certificate Principal Balances of the M-4 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 79.60% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class M-5 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date) and (iv) the Certificate Principal Balances of the M-5 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 82.60% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class M-6 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date) and (v) the Certificate Principal Balances of the M-6 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 85.50% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class M-7 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date) and (vi) the Certificate Principal Balances of the M-7 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 88.30% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class M-8 Principal Distribution Amount”: As of any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class AF Certificates (after taking into account the payment of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Class M-1, Class M-2 and Class M-3 Certificates (after taking into account the payment of the Class M-1/M-2/M-3 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date) and (vii) the Certificate Principal Balances of the M-8 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) approximately 90.70% and (ii) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (B) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period minus the Overcollateralization Floor.

“Class P Certificate”:  Any one of the Certificates with a “P” designated on the face thereof substantially in the form annexed hereto as Exhibit D, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

“Class R Certificate”:  Any one of the Certificates with an “R” designated on the face thereof substantially in the form annexed hereto as Exhibit F, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

“Class R-X Certificate”:  Any one of the Certificates with an “R-X” designated on the face thereof substantially in the form annexed hereto as Exhibit F, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

 “Closing Date”:  February 7, 2007.

“Code”:  The Internal Revenue Code of 1986, as it may be amended from time to time.

“Collection Account”:  The account or accounts created and maintained by the Servicer pursuant to Section 3.09, which shall be entitled “Collection Account, Litton Loan Servicing LP, as Servicer for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1,” and which must be an Eligible Account.

“Collection Period”:  With respect to any Distribution Date, the period from the second day of the calendar month preceding the month in which such Distribution Date occurs through the first day of the month in which such Distribution Date occurs.

“Combined Loan-to-Value Ratio”:  As of any date and Mortgage Loan, the fraction, expressed as a percentage, the numerator of which is the Principal Balance of the Mortgage Loan as of the Cut-off Date plus the principal balance of any related senior mortgage loan or loans, if any, at origination of the Mortgage Loan, and the denominator of which is the Value of the related Mortgaged Property.

“Commission”:  The United States Securities and Exchange Commission.

“Compensating Interest”:  As defined in Section 3.27 hereof.

“Condemnation Proceeds”:  All awards or settlements in respect of a taking of a Mortgaged Property, whether permanent or temporary, partial or entire, by exercise of the power of eminent domain or condemnation.

“Corporate Trust Office”:  With respect to the Trustee, the principal corporate trust office of the Trustee 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 60 Livingston Avenue, St. Paul, Minnesota 55107, Attention: Structured Finance, C-BASS 2007-CB1, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer and the Seller.

“Custodial Agreement”:  The Custodial Agreement, dated as of January 1, 2007, among the Trustee, the Servicer and the Custodian, as the same may be amended or supplemented pursuant to the terms thereof, which is attached hereto as Exhibit R.

“Custodial File”:  With respect to each Mortgage Loan, the file retained by the Trustee or the Custodian consisting of items in Section 2.01(a)(i)-(vi).

“Custodian”:  The Bank of New York, a New York banking corporation, or any successor custodian appointed pursuant to the terms of the Custodial Agreement.

“Cut-off Date”:  January 1, 2007.

“Cut-off Date Principal Balance”:  With respect to any Mortgage Loan, the unpaid principal balance thereof as of the Cut-off Date after application of funds received or advanced on or before such date (or as of the applicable date of substitution with respect to an Eligible Substitute Mortgage Loan).

“Data Tape Information”:  With respect to each Mortgage Loan, the following information as of the Cut-off Date provided by the Seller to the Depositor pursuant to the Purchase Agreement: (1) the Seller’s Mortgage Loan identifying number; (2) the Mortgagor’s name; (3) the street address of the Mortgaged Property including the city, state and zip codes; (4) a code indicating whether the Mortgagor is self-employed; (5) as to each Mortgage Loan, the Cut-off Date Principal Balance; (6) the Index; (7) a code indicating whether the Mortgaged Property is owner-occupied; (8) the number and type of residential units constituting the Mortgaged Property; (9) the original stated months to maturity; (10) the original amortization months to maturity; (11) the stated maturity date; (12) the amount of the Monthly Payment as of the Cut-off Date; (13) the first date on which the Monthly Payment was due on the Mortgage Loan and, if such date is not consistent with the Due Date currently in effect, such Due Date; (14) the “paid through date” based on payments received from the related Mortgagor; (15) the original principal amount of the Mortgage Loan; (16) with respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17) with respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage Rate; (18) with respect to each Adjustable Rate Mortgage Loan, the initial Periodic Mortgage Rate Cap; (19) with respect to each Adjustable Rate Mortgage Loan, the subsequent Periodic Mortgage Rate Cap; (20) with respect to each Adjustable Rate Mortgage Loan, the first payment Adjustment Date immediately following the Cut-off Date; (21) with respect to each Adjustable Rate Mortgage Loan, the first Interest Rate Adjustment Date immediately following the Cut-off Date; (22) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin; (23) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Rate adjustment period; (24) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate Mortgage Loan); (25) lien position (i.e., First-Lien or Second-Lien Mortgage Loan); (26) a code indicating the purpose of the loan (i.e., purchase, rate and term refinance, equity take-out refinance); (27) a code indicating the documentation style (i.e., full, asset verification, income verification and no documentation); (28) the credit risk score (FICO score); (29) the loan credit grade classification (as described in the underwriting guidelines); (30) the Mortgage Rate at origination; (31) the Mortgage Rate as of the Cut-off Date; (32) the value of the Mortgaged Property; (33) a code indicating the term and amount of Prepayment Charges applicable to such Mortgage Loan (including any prepayment penalty term), if any; (34) with respect to each First-Lien Mortgage Loan, the Loan-to-Value Ratio at origination, and with respect to each Second-Lien Mortgage Loan, the Combined Loan-to-Value Ratio at origination; (35) a code indicating the documentation style, as required by Standard & Poor’s criteria; (36) asset verification (Y/N); (37) the date of origination; (38) a code indicating whether the Mortgage Loan is a Balloon Mortgage Loan; (39) the Due Date for the first Scheduled Payment; (40) the original Scheduled Payment due; (41) the debt-to-income ratio with respect to the Mortgage Loan; (42) the Mortgage Rate calculation method (i.e., 30/360, simple interest, other); (43) a code indicating whether the Mortgage Loan is a Home Loan; (44) appraisal verification (Y/N); (45) type of appraisal verification, if any; and (46) with respect to Second-Lien Mortgage Loans, the outstanding principal balance of the superior lien at origination.  With respect to the Mortgage Loans in the aggregate, the Data Tape Information shall set forth the following information, as of the Cut-off Date:  (1) the number of Mortgage Loans; (2) the current aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.

“DBRS”: DBRS, Inc. and its successors, and if such company shall for any reason no longer perform the functions of a securities rating agency, “DBRS” shall be deemed to refer to any other “nationally recognized statistical rating organization” as set forth on the most current list of such organizations released by the Securities and Exchange Commission.  If DBRS is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(c) the address for notices to DBRS shall be DBRS, Inc., 55 Broadway, 15 ^th Floor, New York, New York 10006, Attention:  Quincy Tang, or such other address as DBRS may hereafter furnish to the Depositor, the Trustee and the Servicer.

“Debt Service Reduction”:  With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a Deficient Valuation.

“Defaulted Swap Termination Payment”: Any Swap Termination Payment required to be paid by the Supplemental Interest Trust to the Swap Provider pursuant to the Swap Agreement as a result of an Event of Default (as defined in the Swap Agreement) with respect to which the Swap Provider is the defaulting party or a Termination Event (as defined in the Swap Agreement) under the Swap Agreement with respect to which the Swap Provider is the sole Affected Party (as defined in the Swap Agreement).

“Defective Mortgage Loan”:  A Mortgage Loan replaced or to be replaced by one or more Eligible Substitute Mortgage Loans.

“Deficient Valuation”:  With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

“Definitive Certificates”:  Any Certificate evidenced by a Physical Certificate and any Certificate issued in lieu of a Book-Entry Certificate pursuant to Section 5.02.

“Delinquent”:  Any Mortgage Loan with respect to which the Monthly Payment and/or any Escrow Payment due on a Due Date is not made by the close of business on the next scheduled Due Date for such Mortgage Loan or any Mortgage Loan with respect to which any Servicing Advances made on or before the Cut-off Date has not been reimbursed by the related Mortgagor.

“Depositor”:  Bond Securitization, L.L.C., a Delaware limited liability company, or any successor in interest.

“Depository”:  The initial depository shall be The Depository Trust Company, whose nominee is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.  The Depository shall initially be the registered Holder of the Book-Entry Certificates.  The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York.

“Depository Participant”:  A broker, dealer, bank or other financial institution or other person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository.

“Determination Date”:  With respect to any Distribution Date, the 16th day of the calendar month in which such Distribution Date occurs or, if such 16th day is not a Business Day, the Business Day immediately following such 16th day.

“Directly Operate”:  With respect to any REO Property, the furnishing or rendering of services to the tenants thereof, the management or operation of such REO Property, the holding of such REO Property primarily for sale to customers, the performance of any construction work thereon or any use of such REO Property in a trade or business conducted by the Trust other than through an Independent Contractor; provided , however , that the Trustee (nor the Servicer under this Agreement) shall not be considered to Directly Operate an REO Property solely because the Trustee (or the Servicer under this Agreement) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property.

“Disqualified Organization”:  A “disqualified organization” under Section 860E of the Code, which as of the Closing Date is any of:  (i) the United States, any state or political subdivision thereof, any possession of the United States, any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (ii) any organization (other than a cooperative described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code unless such organization is subject to the tax imposed by Section 511 of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the Trustee based upon an Opinion of Counsel provided by nationally recognized counsel to the Trustee that the holding of an ownership interest in a Residual Certificate by such Person may cause the Trust Fund or any Person having an ownership interest in any Class of Certificates (other than such Person) to incur liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in a Residual Certificate to such Person.  A corporation will not be treated as an instrumentality of the United States or of any state or political subdivision thereof if all of its activities are subject to tax and a majority of its board of directors is not selected by a governmental unit.  The term “United States,” “state” and “international organization” shall have the meanings set forth in Section 7701 of the Code.

“Disqualified Non-U.S. Person”:  With respect to a Residual Certificate, any Non-U.S. Person or agent thereof other than (i) a Non-U.S. Person that holds the Residual Certificate in connection with the conduct of a trade or business within the United States and has furnished the transferor and the Trustee with an effective IRS Form W-8ECI or (ii) a Non-U.S. Person that has delivered to both the transferor and the Trustee an opinion of a nationally recognized tax counsel to the effect that the transfer of the Residual Certificate to it is in accordance with the requirements of the Code and the regulations promulgated thereunder and that such transfer of the Residual Certificate will not be disregarded for federal income tax purposes.

“Distribution Account”:  The trust account or accounts created and maintained by the Trustee pursuant to Section 3.09 which shall be entitled “Distribution Account, U.S. Bank National Association, as Trustee, in trust for the registered Holders of 2007-CB1 Trust, C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1” and which must be an Eligible Account.

“Distribution Date”:  The 25th day of any calendar month, or if such 25th day is not a Business Day, the Business Day immediately following such 25th day, commencing in February 2007.

“Distribution Information”:  The items calculated and reported by the Trustee pursuant to Section 4.03(a)(i)-(iii), (xiv)-(xxi), (xxiii), and (xxvii)-(xxxi) and any other information included in the Monthly Statement aggregated or calculated by the Trustee from (a) information contained in the Remittance Report or (b) other information furnished to the Trustee by the Servicer pursuant to Section 4.01(e).

“Due Date”:  With respect to each Mortgage Loan and any Distribution Date, the day of the calendar month in which such Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive of any grace period.

“Eligible Account”:  Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated “A–2” (or the equivalent) by each of the Rating Agencies at the time any amounts are held on deposit therein, (ii) an account or accounts the deposits in which are fully insured by the FDIC (to the limits established by such corporation), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee and to each Rating Agency, the Certificateholders will have a claim with respect to the funds in such account or a perfected first priority security interest against such collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution with which such account is maintained, (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity or (iv) an account otherwise acceptable to each Rating Agency without reduction or withdrawal of their then current ratings of the Certificates as evidenced by a letter from each Rating Agency to the Trustee.

“Eligible Substitute Mortgage Loan”:  A mortgage loan substituted for a Defective Mortgage Loan pursuant to the terms of this Agreement which must, on the date of such substitution, (i) have an outstanding principal balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of, and not more than 5% less than, the outstanding principal balance of the Defective Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, (ii) have a Mortgage Interest Rate, with respect to a Fixed-Rate Mortgage Loan, not less than the Mortgage Interest Rate of the Defective Mortgage Loan and not more than 1% in excess of the Mortgage Interest Rate of such Defective Mortgage Loan, (iii) if an Adjustable-Rate Mortgage Loan, have a Maximum Loan Rate not less than the Maximum Loan Rate for the Defective Mortgage Loan, (iv) if an Adjustable-Rate Mortgage Loan, have a Minimum Loan Rate not less than the Minimum Loan Rate of the Defective Mortgage Loan, (v) if an Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of the Defective Mortgage Loan, (vi) have the same Due Date as the Defective Mortgage Loan; (vii) if an Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two months later than the next Adjustment Date on the Defective Mortgage Loan, an Eligible Substitute Mortgage Loan must have all Adjustment Dates occurring during the same Interest Accrual Period during which Adjustment Dates occur with respect to the substituted Mortgage Loan, (viii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Defective Mortgage Loan, (ix) be current as of the date of substitution, (x) have a Combined Loan-to-Value Ratio as of the date of substitution equal to or lower than the Combined Loan-to-Value Ratio of the Defective Mortgage Loan as of such date, (xi) have a risk grading determined by the Seller at least equal to the risk grading assigned on the Defective Mortgage Loan, (xii) have been reunderwritten by the Seller in accordance with the same underwriting criteria and guidelines as the Defective Mortgage Loan, and (xiii) conform to each representation and warranty set forth in Section 2.04 hereof applicable to the Defective Mortgage Loan.  In the event that one or more mortgage loans are substituted for one or more Defective Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate principal balances, the Mortgage Interest Rates described in clause (ii) hereof shall be determined on the basis of weighted average Mortgage Interest Rates, the risk gradings described in clause (xi) hereof shall be satisfied as to each such mortgage loan, the terms described in clause (viii) hereof shall be determined on the basis of weighted average remaining term to maturity, the Combined Loan-to-Value Ratios described in clause (x) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (xiii) hereof must be satisfied as to each Eligible Substitute Mortgage Loan or in the aggregate, as the case may be.

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

“ERISA-Restricted Certificate”:  Any of the Class B-2, Class P, Class CE-1, Class CE-2, Class R-X and Class R Certificates, any Class M-7 Certificates that have not been underwritten, placed or sold by an underwriter that has been granted an Underwriter’s Exemption, and any Certificates of any other Class that has ceased to satisfy the requirements of an Underwriter’s Exemption.

“ERISA-Restricted Swap Certificate”:  Any of the Class AF, Class B-1 and Class M Certificates (other than any Class M-7 Certificates that have not been underwritten, placed or sold by an underwriter that has been granted an Underwriter’s Exemption).

 “Escrow Account”:  The account or accounts created and maintained pursuant to Section 3.11.

“Escrow Payments”:  The amounts constituting ground rents, taxes, assessments, water rates, mortgage insurance premiums, fire and hazard insurance premiums and other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan.

“Estate in Real Property”:  A fee simple estate in a parcel of real property.

“Event of Default”:  As defined in Section 7.01.

“Excess Servicing Fee”:  As defined in Section 4.02(h).

“Exchange Act”:  As defined in Section 8.12(a).

“Expense Fee”:  As to each Mortgage Loan and any Distribution Date, the product of the Expense Fee Rate and its Principal Balance as of that Distribution Date.

“Expense Fee Rate”:  With respect to each Mortgage Loan and any Distribution Date, the Servicing Fee Rate plus the Trustee Fee Rate.

“Extra Principal Distribution Amount”:  As of any Distribution Date, the lesser of (x) the Monthly Excess Cashflow Amount for such Distribution Date and (y) the Overcollateralization Deficiency for such Distribution Date.

“Fannie Mae”:  The Federal National Mortgage Association, or any successor thereto.

“Fannie Mae Guides”:  The Fannie Mae Sellers’ Guide and the Fannie Mae Servicers’ Guide and all amendments or additions thereto.

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

“Fidelity Bond”:  Shall have the meaning assigned thereto in Section 3.15.

“Final Recovery Determination”:  With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Seller or the Servicer pursuant to or as contemplated by this Agreement), a determination made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered.  The Servicer shall maintain records, prepared by a Servicing Officer, of each Final Recovery Determination made thereby.

“Fitch”:  Fitch, Inc. and its successors, and if such company shall for any reason no longer perform the functions of a securities rating agency, “Fitch” shall be deemed to refer to any other “nationally recognized statistical rating organization” as set forth on the most current list of such organizations released by the Securities and Exchange Commission.  For purposes of Section 10.05(c) the address for notices to Fitch shall be Fitch, Inc., One State Street Plaza, 30 ^th Floor, New York, New York 10004, Attention:  MBS Monitoring – Bond Securitization, L.L.C. Trust 2007-CB1, or such other address as Fitch may hereafter furnish to the Depositor and the Servicer.

“Fixed Coupon”:  For each Class of Fixed Rate Certificates specified below for each Distribution Date is as follows:

	(1)	(2)
Class AF-1B	6.004%	6.504%
Class AF-2	5.721%	6.221%
Class AF-3	5.737%	6.237%
Class AF-4	5.910%	6.410%
Class AF-5	6.018%	6.518%
Class AF-6	5.835%	6.335%
Class B-2	7.000%	7.500%

__________

(1)

For the Interest Accrual Period for each Distribution Date occurring on or prior to the first possible Optional Termination Date.

(2)

For each other Interest Accrual Period.

“Fixed Rate Certificates”:  The Class AF-1B, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6 and Class B-2 Certificates.

“Fixed-Rate Mortgage Loan”:  A Mortgage Loan which has a constant annual rate at which interest accrues in accordance with the provisions of the related Mortgage Note.

“Floating Rate Certificates”:  The Class AF-1A, Class M and Class B-1 Certificates.

 “Freddie Mac”:  The Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto.

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

“Independent”:  When used with respect to any specified Person, any such Person who (i) is in fact independent of the Depositor, the Servicer and their respective Affiliates, (ii) does not have any direct financial interest in or any material indirect financial interest in the Depositor or the Servicer or any Affiliate thereof, and (iii) is not connected with the Depositor or the Servicer or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided , however , that a Person shall not fail to be Independent of the Depositor or the Servicer or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any Class of securities issued by the Depositor or the Servicer or any Affiliate thereof, as the case may be.

“Independent Contractor”:  Either (i) any Person (other than the Servicer) that would be an “independent contractor” with respect to the Trust Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were a real estate investment trust (except that the ownership tests set forth in that section shall be considered to be met by any Person that owns, directly or indirectly, 35 percent or more of any Class of Certificates), so long as the Trust Fund does not receive or derive any income from such Person and provided that the relationship between such Person and the Trust Fund is at arm’s length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the Trustee has received an Opinion of Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to the effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code (determined without regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO Property to fail to qualify as Rents from Real Property.

“Index”:  With respect to each Adjustable-Rate Mortgage Loan and with respect to each related Adjustment Date, the index as specified in the related Mortgage Note.

“Initial Certificate Principal Balance”:  With respect to any Certificate other than a Class P, Class CE-1, Class CE-2 or Residual Certificate, the amount designated “Initial Certificate Principal Balance” on the face thereof.

“Insurance Proceeds”:  Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Servicer would follow in servicing mortgage loans held for its own account, subject to the terms and conditions of the related Mortgage Note and Mortgage.

“Interest Accrual Period”:  With respect to any Distribution Date and (i) with respect to the Floating Rate Certificates, the period from and including the preceding Distribution Date through and including the day prior to the current Distribution Date (or, in the case of the first Distribution Date, the period from and including the Closing Date through and including the day prior to the current Distribution Date), and (ii) with respect to the Fixed Rate Certificates and the Class CE Certificates, the calendar month immediately preceding the month in which such Distribution Date occurs.

“Interest Carry Forward Amount”:  For any Distribution Date and any Class of Certificates, the sum of (a) the portion of the Accrued Certificate Interest from Distribution Dates prior to the current Distribution Date remaining unpaid immediately prior to the current Distribution Date  and (b) interest on the amount in clause (a) above at the applicable Pass-Through Rate (to the extent permitted by applicable law).

“Interest Percentage”: With respect to any Class of Certificates and any Distribution Date, the ratio (expressed as a decimal carried to six places) of the Accrued Certificate Interest for such Class to the sum of the Accrued Certificate Interest for all classes in each case with respect to such Distribution Date and without taking into account any Relief Act Interest Shortfalls for such Distribution Date.

“Interest Remittance Amount”:  With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date attributable to interest received or advanced with respect to the Mortgage Loans or to Compensating Interest paid by the Servicer with respect to the Mortgage Loans.

“Intermediate REMIC Regular Interest”:  As defined in the Preliminary Statement.

“IRS”:  The Internal Revenue Service.

“Late Collections”:  With respect to any Mortgage Loan, all amounts received subsequent to the Determination Date immediately following any related Collection Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late payments or collections of principal and/or interest due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) but delinquent on a contractual basis for such Collection Period and not previously recovered.

“Lender”:  As defined in Section 3.30 hereof.

“LIBOR”:  With respect to each Interest Accrual Period, the rate determined by the Trustee on the related LIBOR Determination Date on the basis of the offered rate for one-month United States dollar deposits, as such rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.  If no such quotations are available on an LIBOR Determination Date, LIBOR for the related Interest Accrual Period will be established by the Trustee as follows:

(i)

If on such LIBOR Determination Date two or more Reference Banks provide such offered quotations, LIBOR for the related Interest Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/32%);

(ii)

If on any LIBOR Determination Date only one or none of the Reference Banks provides such offered quotations, LIBOR for the next Interest Accrual Period shall be whichever  is the higher of (1) LIBOR as determined on the previous LIBOR Determination Date or (2) the reserve interest rate, which is the rate per annum which the Trustee determines to be either (a) the arithmetic mean, rounded upwards if necessary to the nearest whole multiple of 1/32%, of the one-month United States dollar lending rates that New York City banks selected by the Trustee are quoting on the relevant LIBOR Determination Date, to the principal London offices of at least two of the Reference Banks to which quotations are, in the opinion of the Trustee, being so made, or (b) in the event that the calculation agent can determine no arithmetic mean, the lowest one-month United States dollar lending rate which New York City banks selected by the Trustee are quoting on the LIBOR Determination Date to leading European banks; and

(iii)

If no such quotations can be obtained, LIBOR for the related Interest Accrual Period shall be LIBOR for the prior Distribution Date.

“LIBOR Business Day”:  Any day on which banks in London, England and The City of New York are open and conducting transactions in foreign currency and exchange.

“LIBOR Determination Date”:  With respect to the Floating Rate Certificates, (i) for the first Distribution Date, the second LIBOR Business Day preceding the Closing Date and (ii) for each subsequent Distribution Date, the second LIBOR Business Day prior to the immediately preceding Distribution Date.

“Liquidated Mortgage Loan”:  As to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with the servicing procedures specified herein, as of the end of the related Prepayment Period, that all Liquidation Proceeds and Insurance Proceeds which it expects to recover with respect to the liquidation of the Mortgage Loan or disposition of the related REO Property have been recovered.

“Liquidation Proceeds”:  The amount (other than amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the Servicer in connection with (i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation or (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee’s sale, foreclosure sale or otherwise.

“Liquidation Report”:  As to any Distribution Date, the report with respect to any Liquidated Mortgage Loans for such Distribution Date in such form and containing such information as is agreed to by the Servicer and the Trustee.

“Majority Certificateholders”:  The Holders of Certificates evidencing at least 51% of the Voting Rights.

“Master REMIC Regular Interest”:  As defined in the Preliminary Statement.

“Maximum Loan Rate”:  With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Mortgage Interest Rate thereunder.

“ Maximum Rate Cap”: With respect to any Distribution Date and the Floating Rate Certificates, a per annum rate (expressed on the basis of an assumed 360-day year and the actual number of days elapsed during the related Interest Accrual Period) equal to (i) the Net Maximum WAC plus (ii) 12 times the quotient of (a) (1) the excess for such Distribution Date of any Net Swap Receipt over any Net Swap Payment and (2) Swap Termination Payment (other than a Defaulted Swap Termination Payment), if any, made to the Supplemental Interest Trust and (b) the Pool Balance as of the first day of the related Collection Period on the basis of an assumed 360-day year consisting of twelve 30-day months.

 “Minimum Loan Rate”:  With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Interest Rate thereunder.

“Monthly Excess Cashflow Amount”:  With respect to each Distribution Date, the sum of the Monthly Excess Interest Amount for such Distribution Date, the Overcollateralization Release Amount for such Distribution Date and (without duplication) any portion of the Principal Distribution Amount remaining after all distributions have been made pursuant to Section 4.02(a) hereof on such Distribution Date.

“Monthly Excess Interest Amount”:  With respect to each Distribution Date, the amount, if any, by which the Interest Remittance Amount for such Distribution Date exceeds the aggregate amount distributed on such Distribution Date pursuant to Section 4.02(d) hereof, plus interest on the Overcollateralization Amount accrued during the Interest Accrual Period related to that Distribution Date.

“Monthly Payment”:  With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined:  (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the Servicer pursuant to Section 3.01; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

“Monthly Statement”:  The statement delivered to the Certificateholders pursuant to Section 4.03.

“Moody’s”:  Moody’s Investors Service, Inc. and its successors, and if such company shall for any reason no longer perform the functions of a securities rating agency, “Moody’s” shall be deemed to refer to any other “nationally recognized statistical rating organization” as set forth on the most current list of such organizations released by the Securities and Exchange Commission.  If Moody’s is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(c) the address for notices to Moody’s shall be Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention:  Residential Mortgage Pass-Through Group, or such other address as Moody’s may hereafter furnish to the Depositor and the Servicer.

“Mortgage”:  The mortgage, deed of trust or other instrument creating a first or second lien on, or first or second priority security interest in, a Mortgaged Property securing a Mortgage Note.

“Mortgage File”:  The items pertaining to a particular Mortgage Loan contained in either the Servicing File or Custodial File.

 “Mortgage Interest Rate”:  With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note, which rate (i) in the case of each Fixed-Rate Mortgage Loan shall remain constant at the rate set forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect immediately following the Cut-off Date and (ii) in the case of each Adjustable-Rate Mortgage Loan (A) as of any date of determination until the first Adjustment Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect immediately following the Cut-off Date and (B) as of any date of determination thereafter shall be the rate as adjusted on the most recent Adjustment Date, to equal the sum, rounded to the nearest 0.125% as provided in the Mortgage Note, of the Index, determined as set forth in the related Mortgage Note, plus the related Gross Margin subject to the limitations set forth in the related Mortgage Note.  With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.  

“Mortgage Loan”:  Each mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as a part of the Trust Fund, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.

“Mortgage Loan Purchase Agreement”:  The agreement between the Seller and the Depositor, dated as of January 1, 2007, regarding the transfer of the Mortgage Loans by the Seller to or at the direction of the Depositor, a form of which is attached hereto as Exhibit P.

“Mortgage Loan Schedule”:  As of any date (i) with respect to the Mortgage Loans, the list of such Mortgage Loans included in the Trust Fund on such date.  The Mortgage Loan Schedule shall be prepared by the Seller and shall set forth the following information with respect to each Mortgage Loan:

(1)

the Seller’s Mortgage Loan identifying number;

(2)

the city, state, and zip code of the Mortgaged Property;

(3)

the type of Residential Dwelling constituting the Mortgaged Property or a designation that the Mortgaged Property is a multi-family property;

(4)

the occupancy status of the Mortgaged Property at origination;

(5)

the original months to maturity;

(6)

the date of origination;

(7)

the first payment date;

(8)

the stated maturity date;

(9)

the stated remaining months to maturity;

(10)

the original principal amount of the Mortgage Loan;

(11)

the Principal Balance of each Mortgage Loan as of the Cut-off Date;

(12)

the Mortgage Interest Rate of the Mortgage Loan as of the Cut-off Date;

(13)

the current principal and interest payment of the Mortgage Loan as of the Cut-off Date;

(14)

the contractual interest paid to date of the Mortgage Loan;

(15)

if the Mortgage Loan is not owner-financed, the Combined Loan-to-Value Ratio at origination;

(16)

a code indicating the loan performance status of the Mortgage Loan as of the Cut-off Date;

(17)

a code indicating whether the Mortgaged Property is in bankruptcy or in its forbearance period as of the Cut-off Date;

(18)

[reserved];

(19)

a code indicating the Index that is associated with such Mortgage Loan;

(20)

the Gross Margin;

(21)

the Periodic Rate Cap;

(22)

the Minimum Loan Rate;

(23)

the Maximum Loan Rate;

(24)

a code indicating whether the Mortgage Loan has a prepayment penalty and the type of prepayment penalty;

(25)

the first Adjustment Date immediately following the Cut-off Date;

(26)

the rate adjustment frequency;

(27)

the payment adjustment frequency;

(28)

a code indicating whether the Mortgage Loan is owner-financed;

(29)

a code indicating whether the Mortgage Loan is an interest only Mortgage Loan and, if so, the interest only period at origination;

(30)

a code indicating whether the Mortgage Loan is a Second Lien Mortgage Loan.

The Mortgage Loan Schedule shall set forth the following information, as of the Cut-off Date, with respect to the Mortgage Loans in the aggregate:  (1) the number of Mortgage Loans; (2) the current Principal Balance of the Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans.  The Mortgage Loan Schedule shall be amended from time to time by the Seller in accordance with the provisions of this Agreement.  With respect to any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan, determined in accordance with the definition of Cut-off Date herein.

“Mortgage Note”:  The original executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.

“Mortgage Pool”:  The pool of Mortgage Loans, identified on Schedule I from time to time, and any REO Properties acquired in respect thereof.

“Mortgaged Property”:  The underlying property securing a Mortgage Loan, including any REO Property, consisting of an Estate in Real Property improved by a Residential Dwelling or multi-family dwelling.

“Mortgagor”:  The obligor on a Mortgage Note.

“Net Liquidation Proceeds”:  With respect to any Liquidated Mortgage Loan or any other disposition of related Mortgaged Property (including REO Property) the related Liquidation Proceeds net of unreimbursed Advances, unreimbursed Servicing Advances, Expense Fees and any other accrued and unpaid servicing fees received and retained in connection with the liquidation of such Mortgage Loan or Mortgaged Property.

“Net Maximum Mortgage Interest Rate”:  For each Mortgage Loan, the applicable Maximum Loan Rate (or the applicable Mortgage Interest Rate if such Mortgage Loan is a Fixed-Rate Mortgage Loan) less the Expense Fee Rate.

“Net Maximum WAC”: With respect to any Distribution Date, the average of the Net Maximum Mortgage Interest Rates for the Mortgage Loans, weighted on the basis of the Principal Balances of the Mortgage Loans as of the first day of the related Collection Period.

“Net Mortgage Interest Rate”:  With respect to any Mortgage Loan and any Collection Period, the Mortgage Interest Rate borne by such Mortgage Loan minus the Expense Fee Rate for such Mortgage Loan and such Collection Period.

“Net Swap Payment”: With respect to any Distribution Date, any net payment (other than a Swap Termination Payment) payable by the Supplemental Interest Trust to the Swap Provider on the related Fixed Rate Payer Payment Date (as defined in the Swap Agreement).

“Net Swap Receipt”: With respect to any Distribution Date, any net payment (other than a Swap Termination Payment) made by the Swap Provider to the Supplemental Interest Trust on the related Floating Rate Payer Payment Date (as defined in the Swap Agreement).

 “Net WAC Cap”:  With respect to the Mortgage Loans as of any Distribution Date, a per annum rate equal to the product of (i) 12 times the quotient of (x) the total scheduled interest on the Mortgage Loans for the related Interest Accrual Period, net of Expense Fees less (1) the excess for such Distribution Date of any Net Swap Payment over any Net Swap Receipt and (2) Swap Termination Payment (other than a Defaulted Swap Termination Payment), if any, made to the Swap Provider and (y) the aggregate Principal Balance of the Mortgage Loans as of the first day of the related Collection Period, expressed with respect to the Floating Rate Certificates on the basis of an assumed 360-day year and the actual number of days elapsed during the related Interest Accrual Period and, with respect to the Fixed Rate Certificates, on the basis of an assumed 360-day year consisting of twelve 30-day months.

 “Net WAC Cap Carryover Amounts”: If on any Distribution Date, the Accrued Certificate Interest for any of the Fixed Rate or Floating Rate Certificates is based upon the Net WAC Cap, the excess of (i) the amount of interest such class would have been entitled to receive on such Distribution Date (calculated at an interest rate based on clause (a)(1) or (b)(1), as applicable, of the definition of its Pass-Through Rate but not more than Maximum Rate Cap) over (ii) the amount of interest such class was entitled to receive on such Distribution Date based on the Net WAC Cap, together with the unpaid portion of any such excess from prior Distribution Dates (and interest accrued thereon at the then applicable Pass-Through Rate (calculated at an interest rate based on clause (a)(1) or (b)(1), as applicable, of the definition of its Pass-Through Rate but not more than Maximum Rate Cap) on such class).

 “Nonrecoverable Advance”:  Any Advance previously made or proposed to be made in respect of a Mortgage Loan that, in the good faith business judgment of the Servicer, will not or, in the case of a proposed Advance, would not be ultimately recoverable from Late Collections on such Mortgage Loan as provided herein.

“Non-U.S. Person”:  A person that is not a U.S. Person.

“Notice of Final Distribution”:  The notice to be provided pursuant to Section 9.02 to the effect that final distribution on any of the Certificates shall be made only upon presentation and surrender thereof.

 “Offered Certificates”:  The Class AF-1A, Class AF-1B, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates.

“Officer’s Certificate”:  A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president (however denominated), or by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Servicer, the Seller or the Depositor, as applicable.

“Opinion of Counsel”:  A written opinion of counsel, who may, without limitation, be a salaried counsel for the Depositor or the Servicer except that any opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.

“Optional Termination Date”:  The first Distribution Date on which the Servicer (or an Affiliate) may elect to terminate the Mortgage Pool pursuant to Section 9.01.

 “Original Certificate Principal Balance”:  With respect to each Class of Certificates, the Certificate Principal Balance thereof on the Closing Date, as set forth opposite such Class in the Preliminary Statement, except with respect to the Class P, Class CE and Residual Certificates, which have an Original Certificate Principal Balance of zero.

 “Overcollateralization Amount”:  As of any Distribution Date, the excess, if any, of (x) the Pool Balance as of the last day of the immediately preceding Collection Period after giving effect to Principal Prepayments in the related Prepayment Period over (y) the aggregate Certificate Principal Balances of all Classes of Fixed Rate and Floating Rate Certificates (after taking into account all distributions of principal on such Distribution Date).

“Overcollateralization Deficiency”:  As of any Distribution Date, the excess, if any, of (x) the Targeted Overcollateralization Amount for such Distribution Date over (y) the Overcollateralization Amount for such Distribution Date, calculated for this purpose after taking into account the reduction on such Distribution Date of the Certificate Principal Balance of all Classes of Certificates resulting from the distribution of the Principal Distribution Amount (but not the Extra Principal Distribution Amount) on such Distribution Date, but prior to taking into account any Applied Realized Loss Amounts on such Distribution Date.

“Overcollateralization Floor”:  With respect to any Distribution Date, an amount equal to: (A) prior to the Distribution Date in January 2027, the product of 0.50% and the initial Pool Balance and (B) on or after the Distribution Date in January 2027, the greater of (i) the product of 0.50% and the initial Pool Balance and (ii) the sum of (x) the aggregate Principal Balance of the 40-Year Mortgage Loans as of the end of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (y) the product of 0.10% and the Pool Balance as of the Closing Date.

“Overcollateralization Release Amount”:  With respect to any Distribution Date after the Stepdown Date on which a Trigger Event is not in effect, the lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the excess, if any, of (i) the Overcollateralization Amount for such Distribution Date, assuming that 100% of the Principal Remittance Amount is applied as a principal payment on the Fixed Rate and Floating Rate Certificates on such Distribution Date, over (ii) the Targeted Overcollateralization Amount for such Distribution Date.  With respect to any Distribution Date on which a Trigger Event is in effect, zero.

“Ownership Interest”:  As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.

“P&I Advance”:  As to any Mortgage Loan or REO Property, any advance made by the Servicer in respect of any Remittance Date representing the aggregate of all payments of principal and interest, net of the Servicing Fee, that were due during the related Collection Period on the Mortgage Loans and that were delinquent on the related Determination Date, plus certain amounts representing assumed payments not covered by any current net income on the Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as determined pursuant to Section 4.01.

“Pass-Through Margin”:  For each Class of Floating Rate Certificates specified below for each Distribution Date is as follows:

	(1)	(2)
Class AF-1A	0.070%	0.140%
Class M-1	0.230%	0.345%
Class M-2	0.280%	0.420%
Class M-3	0.300%	0.450%
Class M-4	0.350%	0.525%
Class M-5	0.380%	0.570%
Class M-6	0.440%	0.660%
Class M-7	0.750%	1.125%
Class M-8……………………	1.100%	1.650%
Class B-1……………………	1.800%	2.700%

__________

(1)

For the Interest Accrual Period for each Distribution Date occurring on or prior to the first possible Optional Termination Date.

(2)

For each other Interest Accrual Period.

“Pass-Through Rate”:   For each Class of Fixed Rate and Floating Rate Certificates will be as set forth below:

(a)

for each Class of Floating Rate Certificates, a per annum rate equal to the lesser of (1) One-Month LIBOR plus the related Pass-Through Margin for that Class and that Distribution Date, and (2) the Net WAC Cap;

(b)

for each Class of Fixed Rate Certificates, a per annum rate equal to the lesser of (1) the Fixed Coupon for that Class and that Distribution Date and (2) the Net WAC Cap.

“PCAOB”:  The Public Company Accounting Oversight Board.

“Percentage Interest”:  With respect to any Certificate (other than a Class P or Class CE or Residual Certificate), a fraction, expressed as a percentage, the numerator of which is the Initial Certificate Principal Balance, as the case may be, represented by such Certificate and the denominator of which is the Original Certificate Principal Balance of the related Class. With respect to a Class CE, Class P or Residual Certificate, the portion of the Class evidenced thereby, expressed as a percentage, as stated on the face of such Certificate; provided , however , that the sum of all such percentages for each such Class totals 100%.

“Periodic Rate Cap”:  With respect to each Adjustable-Rate Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate for such Mortgage Loan may increase or decrease (without regard to the Maximum Loan Rate or the Minimum Loan Rate) on such Adjustment Date from the Mortgage Interest Rate in effect immediately prior to such Adjustment Date.

“Permitted Investments”:  Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued or managed by the Depositor, the Servicer, the Trustee or any of their respective Affiliates or for which an Affiliate of the Trustee serves as an advisor:

(i)

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

(ii)

(A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee or its agents acting in their respective commercial capacities) incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company or its ultimate parent has a short-term uninsured debt rating in one of the two highest available rating categories of S&P and Moody’s and the highest available rating category of Fitch and DBRS and provided that each such investment has an original maturity of no more than 365 days and (B) any other demand or time deposit or deposit which is fully insured by the FDIC;

(iii)

repurchase obligations with a term not to exceed 30 days with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated A-1+ or higher by S&P and Fitch, and rated A2 or higher by Moody’s, provided , however , that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (i) above and must (A) be valued daily at current market prices plus accrued interest or (B) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the Trustee in exchange for such collateral and (C) be delivered to the Trustee or, if the Trustee is supplying the collateral, an agent for the Trustee, in such a manner as to accomplish perfection of a security interest in the collateral by possession of certificated securities;

(iv)

securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any State thereof and that are rated by each Rating Agency in its highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment;

(v)

commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than 30 days after the date of acquisition thereof) that is rated by each Rating Agency in its highest short-term unsecured debt rating available at the time of such investment;

(vi)

units of money market funds registered under the Investment Company Act of 1940 including funds managed or advised by the Trustee or Affiliates thereof having the highest rating category by the applicable Rating Agency; and

(vii)

if previously confirmed in writing to the Trustee, any other demand, money market or time deposit, or any other obligation, security or investment, as may be acceptable to the Rating Agencies in writing as a permitted investment of funds backing securities having ratings equivalent to its highest initial rating of the Class AF Certificates;

provided , that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.

“Permitted Transferee”:  Any Person other than (i) the United States, any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing, (ii) a foreign government, international organization or any agency or instrumentality of either of the foregoing, (iii) an organization (except certain farmers’ cooperatives described in Section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income) on any excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to any Residual Certificate, (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a Person that is a Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a Residual Certificate is attributable to a foreign permanent establishment or fixed base, within the meaning of an applicable income tax treaty, of such Person or any other U.S. Person, (vi) an “electing large partnership” within the meaning of Section 775 of the Code and (vii) any other Person so designated by the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual Certificate to such Person may cause any Trust REMIC to fail to qualify as a REMIC at any time that the Certificates are outstanding.  The terms “United States”, “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions.  A corporation will not be treated as an instrumentality of the United States or of any State or political subdivision thereof for these purposes if all of its activities are subject to tax and, with the exception of Freddie Mac, a majority of its board of directors is not selected by such government unit.

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

“Plan Investor”:  As defined in Section 5.02(d).

“Pool Balance”:  As of any date of determination, the aggregate Principal Balance of the Mortgage Loans.

“Prepayment Charge”: With respect to any Prepayment Period, any prepayment premium, fee or charge payable by the a Mortgagor in connection with any Principal Prepayment pursuant to the terms of the related Mortgage Note.

“Prepayment Charge Schedule”:  As of the Cut-off Date, a list attached hereto as Schedule II (including the Prepayment Charge summary attached thereto), setting forth the following information with respect to each prepayment penalty:

(i)

the Mortgage Loan identifying number;

(ii)

a code indicating the type of Prepayment Charge;

(iii)

the state of origination of the related Mortgage Loan;

(iv)

the date on which the first monthly payment was due on the related Mortgage Loan;

(v)

the term of the related Prepayment Charge; and

(vi)

the principal balance of the related Mortgage Loan as of the Cut-off Date.

The Prepayment Charge Schedule shall be amended from time to time by the Servicer in accordance with the provisions of this Agreement and a copy of each related amendment shall be furnished by the Servicer to the Trustee and the Class P and Class CE Certificateholders.

"Prepayment Interest Excess": With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the portion of the related Prepayment Period occurring between the first day of the calendar month in which such Servicer Remittance Date occurs and the last day of the related Prepayment Period, an amount equal to interest at the applicable Net Mortgage Interest Rate on the amount of such Principal Prepayment for the number of days commencing on the first day of the calendar month in which such Distribution Date occurs and ending on the date on which such Principal Prepayment is so applied.

“Prepayment Interest Shortfall”:  With respect to any Distribution Date, for each Mortgage Loan that was during the related Prepayment Period the subject of a Principal Prepayment in full that was applied by the Servicer to reduce the outstanding principal balance of such loan on a date preceding the related Due Date, an amount equal to interest at the applicable Mortgage Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal Prepayment for the number of days commencing on the date on which the prepayment is applied and ending on the last day of the related Prepayment Period.

“Prepayment Period": With respect to the Mortgage Loans and any Distribution Date, the period commencing on the 16th day of the calendar month preceding the calendar month in which such Distribution Date occurs (or, in the case of the first Distribution Date, from the Cut-off Date) and ending on the 15th day of the calendar month in which the related Distribution Date occurs.

“Primary Insurance Policy”:  Each policy of primary guaranty mortgage insurance issued by a Qualified Insurer in effect with respect to any Mortgage Loan, or any replacement policy therefor obtained by the Servicer pursuant to Section 3.13.

“Principal Balance”:  As to any Mortgage Loan and any day, other than a Liquidated Mortgage Loan, the related Cut-off Date Principal Balance, minus all collections credited against the principal balance of any such Mortgage Loan and the principal portion of Advances.  For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Principal Balance of zero thereafter.  As to any REO Property and any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO Property minus any REO Principal Amortization received with respect thereto on or prior to such day.

“Principal Distribution Amount”:  As to any Distribution Date, the sum of (i) the Principal Remittance Amount minus , for Distribution Dates occurring on and after the Stepdown Date and for which a Trigger Event is not in effect, the Overcollateralization Release Amount, if any, and (ii) the Extra Principal Distribution Amount, if any.

“Principal Prepayment”:  Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date and which is not accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment.

“Principal Relocation Payment”:  A payment to a REMIC 1 Regular Interest other than a Regular Interest as provided in the Preliminary Statement.  Principal Relocation Payments shall be made of principal allocations comprising the Principal Remittance Amount less Realized Losses.

“Principal Remittance Amount”:  With respect to any Distribution Date, an amount equal to (A) the sum (less amounts available for reimbursement of Advances pursuant to Section 3.10 and expenses reimbursable pursuant to Section 6.03) of:  (i) each payment of principal on a Mortgage Loan due during the related Collection Period and received by the Servicer on or prior to the related Determination Date, and any Advances with respect thereto, (ii) all full and partial Principal Prepayments received by the Servicer on the Mortgage Loans during the related Prepayment Period, (iii) the Net Liquidation Proceeds allocable to principal actually collected by the Servicer on the Mortgage Loans during the related Prepayment Period and the Insurance Proceeds, Condemnation Proceeds and Subsequent Recoveries received by the Servicer with respect to the Mortgage Loans during that Collection Period, (iv) with respect to Defective Mortgage Loans that are Mortgage Loans repurchased with respect to such Prepayment Period, the portion of the Purchase Price allocable to principal, (v) any Substitution Adjustment Amounts received with respect to Mortgage Loans during the related Prepayment Period and not yet distributed and (vi) on the Distribution Date on which the Trust is to be terminated in accordance with Section 9.01 hereof, that portion of the Termination Price in respect of principal on the Mortgage Loans.

 “Private Certificates”:  Any of the Class M-8, Class B-1, Class B-2, Class P, Class CE-1, Class CE-2 and Residual Certificates.

“Property Insurance Proceeds”:  Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan, to the extent such proceeds are received by the Servicer and are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the Servicer’s servicing procedures, subject to the terms and conditions of the related Mortgage Note and Mortgage.

 “Prospectus Supplement”:  That certain Prospectus Supplement dated January 26, 2007 relating to the public offering of the Offered Certificates.

“PTCE 95-60”:  As defined in Section 5.02.

“Purchase Price”:  With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03, and as confirmed by an Officer’s Certificate from the Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Principal Balance thereof as of the date of purchase, (ii) in the case of (x) a Mortgage Loan, accrued interest on such Principal Balance at the applicable Mortgage Interest Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an Advance by the Servicer, which payment or Advance had as of the date of purchase been distributed pursuant to Sections 4.01 and 4.02, through the end of the calendar month in which the purchase is to be effected, and (y) an REO Property, its fair market value, determined in good faith by the Servicer, (iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees and Trustee Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the Collection Account in respect of such Mortgage Loan or REO Property pursuant to Section 3.13, and (v) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the Servicer or the Trustee in respect of the breach or defect giving rise to the purchase obligation including any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory or abusive lending law.

“Qualified Insurer”:  Any insurance company acceptable to Fannie Mae or Freddie Mac.

“Rating Agency” or “Rating Agencies”:  DBRS, Fitch, Moody’s and S&P, or their respective successors.  If such agencies or their successors are no longer in existence, “Rating Agencies” shall be such nationally recognized statistical rating organizations as set forth on the most current list of such organizations released by the Securities and Exchange Commission and designated by the Depositor, notice of which designation shall be given to the Trustee and the Servicer.

“Realized Loss”:  With respect to a Liquidated Mortgage Loan, the amount by which the remaining unpaid principal balance of the Mortgage Loan plus accrued and unpaid interest thereon at the Mortgage Interest Rate through the last day of the month of liquidation, exceeds the amount of Net Liquidation Proceeds applied to the principal balance of the related Mortgage Loan.  To the extent the Servicer receives Subsequent Recoveries with respect to any Liquidated Mortgage Loan, the amount of the Realized Loss with respect to that Liquidated Mortgage Loan will be reduced by such Subsequent Recoveries.

“Record Date”:  With respect to all of the Floating Rate Certificates and any Distribution Date, the Business Day immediately preceding such Distribution Date; provided , however , that if any such Certificate becomes a Definitive Certificate, the Record Date for such Certificate shall be the last Business Day of the month immediately preceding the month in which such Distribution Date occurs.  With respect to the Fixed Rate Certificates and the Class P, Class CE and Residual Certificates and any Distribution Date, the last Business Day of the month immediately preceding the month in which such Distribution Date occurs (or the Closing Date, in the case of the first Distribution Date).

“Reference Banks”:  Deutsche Bank, Barclays Bank PLC, The Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in interest; provided, however, that if any of the foregoing banks are not able to serve as a Reference Bank, then any leading banks selected by the Depositor which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) not controlling, under the control of or under common control with the Depositor or any Affiliate thereof, and (iii) which have been designated as such by the Depositor.

“Regular Certificate”:  Any of the Floating Rate and Fixed Rate Certificates, the Class P Certificates and the Class CE Certificates.

“Regulation AB”:  Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

“Related Documents”:  With respect to any Mortgage Loan, the related Mortgage Notes, Mortgages and other related documents.

“Relief Act”:  The Servicemembers Civil Relief Act, as amended.

“Relief Act Interest Shortfall”:  With respect to any Distribution Date, for any Mortgage Loan with respect to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Collection Period as a result of the application of the Relief Act or similar state laws, the amount by which (i) interest collectible on such Mortgage Loan during such Collection Period is less than (ii) one month’s interest on the Principal Balance of such Mortgage Loan at the Mortgage Interest Rate for such Mortgage Loan before giving effect to the application of the Relief Act or similar state laws.

“REMIC”:  A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.

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

“REMIC Regular Interest”:  Any of the Master REMIC Regular Interests, the Intermediate REMIC Regular Interests, the Subsidiary REMIC 1 Regular Interests, the Class CE-2 Certificates, the Class P Certificates, and the Class CEM Interest.

“REMIC Swap Rate”:  For each Swap Payment Date (and the related Accrual Period), a per annum rate equal to 10.383%.

“Remittance Report”:  A report prepared by the Servicer and delivered to the Trustee pursuant to Section 4.01(e) in a form mutually agreed upon by the Servicer and the Trustee.

“Rents from Real Property”:  With respect to any REO Property, gross income of the character described in Section 856(d) of the Code.

“REO Disposition”:  The sale or other disposition of an REO Property on behalf of the Trust Fund.

“REO Principal Amortization”:  With respect to any REO Property, for any calendar month, the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to Section 3.13 in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to Section 3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of such REO Property or the related Mortgage Loan.

“REO Property”:  A Mortgaged Property acquired by the Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.13.

“Reportable Event”:  As defined in Section 8.12(g).

“Request for Release”:  The Request for Release submitted by the Servicer to the Trustee or the Custodian, substantially in the form of Exhibit G.

“Residential Dwelling”:  Any one of the following:  (i) a one-family dwelling, (ii) a two- to four-family dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible condominium project, (iv) a one-family dwelling in a planned unit development, which is not a co-operative, or (v) a mobile or manufactured home (as defined in 42 United States Code, Section 5402(6)).

“Residual Certificates”:  The Class R and Class R-X Certificates.

“Residual Interest”:  The sole Class of “residual interests” in each REMIC within the meaning of Section 860G(a)(2) of the Code.

“Responsible Officer”:  When used with respect to the Trustee, any officer assigned to the Corporate Trust Division (or any successor thereto), including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary, any trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and in each case having direct responsibility for the administration of this Agreement.

“Rule 144A Information”:  As defined in Section 5.02(d) hereof.

“S&P”:  Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors, and if such company shall for any reason no longer perform the functions of a securities rating agency, “S&P” shall be deemed to refer to any other “nationally recognized statistical rating organization” as set forth on the most current list of such organizations released by the Securities and Exchange Commission.  If S&P is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(c) the address for notices to S&P shall be Standard & Poor’s, 55 Water Street, New York, New York 10041, Attention:  Bond Securitization, L.L.C. Trust 2007-CB1, or such other address as S&P may hereafter furnish to the Depositor and the Servicer.

“Sarbanes Certification”:  As defined in Section 8.12(b).

“Securities Act”:  The Securities Act of 1933, as amended.

“Seller”:  Credit-Based Asset Servicing and Securitization LLC, or its successor in interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

“Senior Certificate”:  Any one of the Certificates with an “AF” designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Trustee on behalf of the Trust and authenticated and delivered by the Certificate Registrar, representing the right to distributions as set forth herein and therein.

“Senior Certificateholders”:  Collectively, the Holders of the Senior Certificates.

“Senior Credit Support Depletion Date”:  The Distribution Date on which the aggregate Certificate Principal Balances of the Subordinate Certificates has been reduced to zero.

“Senior Enhancement Percentage”:  For any Distribution Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate Principal Balances of the Subordinate Certificates and (ii) the Overcollateralization Amount, in each case before taking into account the distribution of the Principal Distribution Amount on such Distribution Date by (y) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period.

“Senior Principal Distribution Amount”:  As of any Distribution Date (i) before the Stepdown Date or on which a Trigger Event is in effect, the Principal Distribution Amount and (ii) on or after the Stepdown Date and as long as a Trigger Event is not in effect, the excess of (a) the sum of the Certificate Principal Balances of the Class AF Certificates immediately prior to such Distribution Date over (b) the lesser of (x) the product of (1) 61.60% and (2) the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (y) the amount by which Pool Balance as of the last day of the related Collection Period, after giving effect to Principal Prepayments in the related Prepayment Period, exceeds the Overcollateralization Floor.

“Senior Specified Enhancement Percentage”:  On any date of determination thereof, 38.40%.

“Servicer”:  Litton Loan Servicing LP, a Delaware limited partnership, or any successor servicer appointed as herein provided, in its capacity as Servicer hereunder.

“Servicer Affiliate”:  A Person (i) controlling, controlled by or under common control with the Servicer or which is 50% or more owned by the Servicer and (ii) which is qualified to service residential mortgage loans.

“Servicer Event of Default”:  One or more of the events described in Section 7.01.

“Servicer Remittance Date”:  With respect to any Distribution Date, the Business Day immediately preceding such Distribution Date.

“Servicer’s Assignee”:  As defined in Section 6.05(c) hereof.

“Servicing Advances”:  All customary, reasonable and necessary “out of pocket” costs and expenses (including legal fees) incurred by the Servicer in the performance of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration and protection of the Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures and litigation, in respect of a particular Mortgage Loan, (iii) the management (including reasonable fees in connection therewith) and liquidation of any REO Property and (iv) the performance of its obligations under Sections 3.01, 3.09, 3.13 and 3.15.  The Servicing Advances shall also include any reasonable “out-of-pocket” costs and expenses (including legal fees) incurred by the Servicer in connection with executing and recording instruments of satisfaction, deeds of reconveyance or Assignments of Mortgage in connection with any satisfaction or foreclosure in respect of any Mortgage Loan to the extent not recovered from the Mortgagor or otherwise payable under this Agreement.  The Servicer shall not be required to make any Nonrecoverable Advances.

“Servicing Criteria”:  The “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time a form of which as of the Closing Date are listed on Exhibit N-2.

“Servicing Fee”:  With respect to each Mortgage Loan (including each REO Property) and for any calendar month, an amount equal to one month’s interest (or in the event of any payment of interest which accompanies a Principal Prepayment in full made by the Mortgagor during such calendar month, interest for the number of days covered by such payment of interest) at the Servicing Fee Rate on the same principal amount on which interest on such Mortgage Loan accrues for such calendar month.

“Servicing Fee Rate”:  With respect to each Mortgage Loan, for so long as Litton is the servicer of such Mortgage Loan, 0.15% per annum, otherwise 0.50% per annum.

“Servicing Officer”:  Any officer of the Servicer involved in, or responsible for, the administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by the Servicer to the Trustee and the Depositor on the Closing Date, as such list may from time to time be amended.

“Servicing Rights Pledgee”:  One or more lenders, selected by the Servicer, to which the Servicer may pledge and assign all of its right, title and interest in, to and under this Agreement pursuant to and as provided in Section 6.04.

“Special Hazard Losses”: Realized Losses that result from direct physical damage to Mortgaged Properties caused by natural disasters and other hazards (i) which are not covered by hazard insurance policies (such as earthquakes) and (ii) for which claims have been submitted and rejected by the related hazard insurer and any shortfall in insurance proceeds for partial damage due to the application of the co-insurance clauses contained in hazard insurance policies.

“Standard & Poor’s Glossary”:  The Standard & Poor’s LEVELS Glossary, in effect as of the Closing Date.

“Startup Day”:  As defined in Section 8.11(b) hereof.

“Stayed Funds”:  Any payment required to be made under the terms of the Certificates and this Agreement but which is not remitted by the Servicer because the Servicer is the subject of a proceeding under the Bankruptcy Code and the making of such remittance is prohibited by Section 362 of the Bankruptcy Code.

“Stepdown Date”:  The earlier to occur of (x) the later to occur of (A) the Distribution Date in February 2010 and (B) the first Distribution Date on which the Senior Enhancement Percentage is greater than or equal to the Senior Specified Enhancement Percentage and (y) the first Distribution Date after which the aggregate Certificate Principal Balance of the Class AF Certificates is reduced to zero.

“Subcontractor”:  Any third-party or Affiliated vendor, subcontractor or other Person utilized by a Servicer, a Subservicer, the Trustee or the Custodian, as applicable, that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the mortgage-backed securities market) of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans.

“Subordinate Certificates”:  The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class B-1 and Class B-2 Certificates.

“Subsequent Recoveries”:  As to any Distribution Date, with respect to a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior calendar month, unexpected amounts received by the Servicer (net of any related expenses permitted to be reimbursed pursuant to Section 3.09) specifically related to such Liquidated Mortgage Loan.

“Subservicer”:  Any Person that services Mortgage Loans on behalf of a Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by a Servicer under this Agreement, with respect to some or all of the Mortgage Loans, that are identified in Item 1122(d) of Regulation AB.

“Subservicing Account”:  As defined in Section 3.08.

“Subservicing Agreements”:  As defined in Section 3.02(a).

“Subsidiary REMIC 1 Regular Interest”:  As defined in the Preliminary Statement.

“Substitution Adjustment Amount”:  As defined in Section 2.03 hereof.

“Supplemental Interest Trust”: The corpus of a trust created pursuant to Section 4.07 of this Agreement and designated as the “Supplemental Interest Trust,” consisting of the Swap Agreement, the Swap Account and the right to receive any Net Swap Receipt and Swap Termination Payments from the Swap Provider, subject to the obligation to pay the amounts specified in Section 4.07.  The Supplemental Interest Trust is not an asset of any REMIC created hereunder.

“Supplemental Interest Trust Trustee”: The Trustee, acting not in its individual capacity but solely as Trustee of the Supplemental Interest Trust, and any successors and assigns in such capacity.

“Swap Account”: The trust account created and maintained by the Supplemental Interest Trust Trustee pursuant to Section 4.07 which shall be entitled “Swap Account, U.S. Bank National Association, as Supplemental Interest Trust Trustee, in trust for registered Holders of C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1” and which must be an Eligible Account.  Amounts on deposit in the Swap Account shall not be invested.  The Swap Account shall not be an asset of any REMIC formed under this Agreement.

“Swap Agreement”: The interest rate swap agreement, dated as of February 7, 2007, between the Swap Provider and the Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust, a copy of which is attached hereto as Exhibit Q.

“Swap LIBOR”: A per annum rate equal to the floating rate payable by the Swap Provider under the Swap Agreement determined by taking into account the day count convention used to determine the amount of the payment required by the Swap Provider and expressing such rate as so determined on an actual/360 basis.

“Swap Notional Balance”: With respect to each Distribution Date, an amount equal to the amount set forth for such period on Schedule I of the Swap Agreement.

“Swap Provider”: JPMorgan Chase Bank, National Association.

“Swap Termination Payment”: Any payment payable by the Supplemental Interest Trust or the Swap Provider upon termination of the Swap Agreement as a result of an Event of Default (as defined in the Swap Agreement) or a Termination Event (as defined in the Swap Agreement).

“Targeted Overcollateralization Amount”:  As of any Distribution Date, (x) prior to the Stepdown Date, 2.60% of the initial Pool Balance and (y) on and after the Stepdown Date, (A) so long as a Trigger Event is not in effect as of such Distribution Date, the lesser of (a) 2.60% of the initial Pool Balance and (b) the greater of (i) 5.20% of the the Pool Balance as of the last day of the related Collection Period after giving effect to Principal Prepayments in the related Prepayment Period and (ii) the Overcollateralization Floor, or (B) if a Trigger Event is in effect as of such Distribution Date, the greater of (a) the Targeted Overcollateralization Amount as of the immediately preceding Distribution Date and (b) the Overcollateralization Floor. The Targeted Overcollateralization Amount will equal zero if the Certificate Principal Balances of each of the Fixed Rate and Floating Rate Certificates have been reduced to zero.

“Tax Matters Person”:  The Holder of the Class R Certificates designated as “tax matters person” of each Trust REMIC, in the manner provided under Treasury Regulations Section 1.860F–4(d) and Treasury Regulations Section 301.6231(a)(7)–1.

“Tax Returns”:  The federal income tax returns on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of the Trust for each of the eight REMICs created pursuant to this Agreement under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.

“Telerate Page 3750”:  The display page currently so designated on the Moneyline Telerate Service (or such other page as may replace the Telerate Page 3750 page on that service for the purpose of displaying London interbank offered rates of major banks).

“Termination Price”:  As defined in Section 9.01 hereof.

“Transfer”:  Any direct or indirect transfer or sale of any Ownership Interest in a Certificate.

“Transfer Affidavit”:  As defined in Section 5.02(c).

“Transferor Certificate”:  As described in Section 5.02(b).

“Trigger Event”:  With respect to any Distribution Date, if (i) the six-month rolling average of 60+ Day Delinquent Loans equals or exceeds 41.67% of the Senior Enhancement Percentage; or (ii) the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Collection Period (reduced by the aggregate amount of Subsequent Recoveries received through the last day of such Collection Period) divided by the initial Pool Balance exceeds the applicable percentages set forth below with respect to such Distribution Date:

Distribution Date Occurring In	Percentage*
February 2009 through January 2010	1.30%*
February 2010 through January 2011	2.95%*
February 2011 through January 2012	4.70%*
February 2012 through January 2013	6.10%*
February 2013 through January 2014	6.95%*
February 2014 and thereafter	7.05%

*

The percentages set forth in the table above are the percentages applicable for the first Distribution Date in the corresponding range of Distribution Dates.  The percentage for each succeeding Distribution Date in a range increases incrementally by 1/12 of the positive difference between the percentage applicable to the first Distribution Date in that range and the percentage applicable to the first Distribution Date in the succeeding range.

“Trust”:  C-BASS 2007-CB1 Trust, the trust created hereunder in Section 2.01.

“Trust Fund”:  The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to a portion of which nine REMIC elections are to be made, such entire Trust Fund consisting of:  (i) such Mortgage Loans as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all collections thereon and proceeds thereof, (ii) any REO Property, together with all collections thereon and proceeds thereof, (iii) the Trustee’s rights with respect to the Mortgage Loans under all insurance policies required to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement (including any security interest created thereby), and (v) the Collection Account, the Distribution Account, the Basis Risk Reserve Fund and any REO Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto.

“Trustee”:  U.S. Bank National Association, a national banking association, or any successor Trustee appointed as herein provided.

“Trustee Fee”:  With respect to any Distribution Date, the product of (x) one-twelfth of the Trustee Fee Rate and (y) the aggregate of the Principal Balances of all Mortgage Loans as of the opening of business on the first day of the related Collection Period.

“Trustee Fee Rate”:  With respect to the Mortgage Pool, 0.005% per annum.

“Underwriter’s Exemption”:  Any exemption listed under footnote 1 of, and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002), or any successor exemption.

“United States Person” or “U.S. Person”:  (i) A citizen or resident of the United States, (ii) a corporation, partnership or other entity treated as a corporation or partnership for United States federal income tax purposes organized in or under the laws of the United States or any state thereof or the District of Columbia (unless, in the case of a partnership, Treasury regulations provide otherwise) or (iii) an estate the income of which is includible in gross income for United States tax purposes, regardless of its source, or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have authority to control all substantial decisions of the trust.  Notwithstanding the preceding sentence, to the extent provided in Treasury regulations, certain Trusts in existence on August 20, 1996, and treated as United States persons prior to such date, that elect to continue to be treated as United States persons will also be a U.S. Person.

“Unpaid Realized Loss Amount”:  With respect to each Class of Subordinate Certificates and any Distribution Date, the excess of (x) the cumulative amount of Applied Realized Loss Amounts allocated to such class pursuant to Section 4.04 for all Distribution Dates over (y) the cumulative amount of payments in respect of Unpaid Realized Loss Amounts to such Class for all prior Distribution Dates pursuant to Section 4.02(b) and any reductions applied thereto as specified in Section 4.04 due to the receipt of Subsequent Recoveries.

“Value”:  With respect to any Mortgaged Property, the value thereof as determined by an independent appraisal made at the time of the origination of the related Mortgage Loan or the sale price, if the appraisal is not available; except that, with respect to any Mortgage Loan that is a purchase money mortgage loan, the lesser of (i) the value thereof as determined by an independent appraisal made at the time of the origination of such Mortgage Loan, if any, and (ii) the sales price of the related Mortgaged Property.

“Voting Rights”:  The portion of the voting rights of all of the Certificates which is allocated to any Certificate.  The Voting Rights allocated among Holders of the Fixed Rate and Floating Rate Certificates shall be 98%.  Such Voting Rights shall be allocated among each such class according to the fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of all the Certificates of such Class then outstanding and the denominator of which is the aggregate Certificate Principal Balance of all of the Certificates then outstanding.  The Voting Rights allocated to each such Class of Certificates shall be allocated among all Holders of each such Class in proportion to the outstanding Certificate Principal Balance of such Certificates; provided , however , that any Certificate registered in the name of the Servicer, the Depositor, the Trustee or any of their respective Affiliates shall not be included in the calculation of Voting Rights; provided , further , that only such Certificates as are known by a Responsible Officer of the Trustee to be so registered will be so excluded.  The Class CE-1 and Class P Certificates shall each be allocated 1% of the Voting Rights.  The Class CE-2 Certificates will not have any Voting Rights.

“Weighted Average Net Mortgage Rate”:  The weighted average (based on Principal Balance as of the first day of the related Collection Period or, in the case of the first Distribution Date, the Cut-Off Date) of the Net Mortgage Interest Rates of the Mortgage Loans, expressed as an annual rate and calculated on the basis of twelve months consisting of 30 days each and a 360-day year.

“Written Order to Authenticate”:  A written order by which the Depositor directs the Trustee to execute, authenticate and deliver the Certificates.

Section 1.02

Accounting .

Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions.

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES

Section 2.01

Conveyance of Mortgage Loans .

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee, on behalf of the Trust, without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to (i) each Mortgage Loan identified on the Mortgage Loan Schedule, including the related Cut-off Date Principal Balance, all interest accruing thereon after the Cut-off Date and all collections in respect of interest and principal due after the Cut-off Date; (ii) the Mortgage File for each such Mortgage Loan; (iii) property which secured each such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure, (iv) its interest in any insurance policies in respect of the Mortgage loans, (v) all proceeds of any of the foregoing, (vi) the rights of the Depositor under the Mortgage Loan Purchase Agreement and (vii) all other assets included or to be included in the Trust Fund.  Such assignment includes all interest and principal due to the Depositor or the Servicer after the Cut-off Date with respect to the Mortgage Loans.

In connection with such transfer and assignment, the Seller, on behalf of the Depositor, does hereby deliver or cause to be delivered to, and deposit with the Custodian on behalf of the Trustee, the following documents or instruments with respect to each Mortgage Loan (a “Mortgage File”) so transferred and assigned:

(i)

the original Mortgage Note, endorsed either (A) in blank or (B) in the following form:  “Pay to the order of U.S. Bank National Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1, without recourse,” or with respect to any lost Mortgage Note, an original Lost Note Affidavit, together with a copy of the related Mortgage Note;

(ii)

the original Mortgage with evidence of recording thereon, and the original recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon or, if such Mortgage or power of attorney has been submitted for recording but has not been returned from the applicable public recording office, has been lost or is not otherwise available, a copy of such Mortgage or power of attorney, as the case may be, certified to be a true and complete copy of the original submitted for recording;

(iii)

an original Assignment of Mortgage, in form and substance acceptable for recording.  The Mortgage shall be assigned either (A) in blank or (B) to “U.S. Bank National Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1, without recourse”;

(iv)

an original, or a certified copy thereof, of any intervening assignment of Mortgage showing a complete chain of assignments;

(v)

the original or a certified copy of lender’s title insurance policy; and

(vi)

the original or copies of each assumption, modification, written assurance or substitution agreement, if any.

The Servicer shall cause the Assignments of Mortgage which were delivered in blank to be completed and shall cause all Assignments referred to in Section 2.01(a)(iii) hereof and, to the extent necessary, in Section 2.01(a)(iv) hereof to be recorded. The Servicer shall be required to deliver such assignments for recording within 30 days of the Closing Date. The Servicer shall furnish the Custodian with a copy of each Assignment of Mortgage submitted for recording. In the event that any such Assignment is lost or returned unrecorded because of a defect therein, the Servicer shall promptly have a substitute Assignment prepared or have such defect cured, as the case may be, and thereafter cause each such Assignment to be duly recorded.

If any of the documents referred to in Section 2.01(b)(ii), (iii) or (iv) above has as of the Closing Date been submitted for recording but either (x) has not been returned from the applicable public recording office or (y) has been lost or such public recording office has retained the original of such document, the obligations of the Seller to deliver such documents shall be deemed to be satisfied upon (1) delivery to the Custodian no later than the Closing Date, of a copy of each such document certified by the Seller in the case of (x) above or the applicable public recording office in the case of (y) above to be a true and complete copy of the original that was submitted for recording and (2) if such copy is certified by the Seller, delivery to the Custodian, promptly upon receipt thereof of either the original or a copy of such document certified by the applicable public recording office to be a true and complete copy of the original.  The Seller shall deliver or cause to be delivered to the Custodian promptly upon receipt thereof any other documents constituting a part of a Mortgage File received with respect to any Mortgage Loan, including, but not limited to, any original documents evidencing an assumption or modification of any Mortgage Loan.

Upon discovery or receipt of notice of any materially defective document in, or that a document is missing from, a Mortgage File, the Seller shall have 120 days to cure such defect or 150 days following the Closing Date, in the case of missing Mortgages or Assignments or deliver such missing document to the Trustee or the Custodian.  If the Seller does not cure such defect or deliver such missing document within such time period, the Seller shall either repurchase or substitute for such Mortgage Loan in accordance with Section 2.03.

In the event that any Mortgage Note is endorsed in blank as of the Closing Date, promptly following the Closing Date the Servicer shall cause to be completed such endorsements “Pay to the order of U.S. Bank National Association, as Trustee for the C-BASS Mortgage Loan Asset-Backed Certificates, Series 2007-CB1, without recourse.”

In the event that any Assignments of Mortgage is not recorded or is improperly recorded  (as a result of actions taken or not taken by a person other than the Servicer), neither the Servicer nor the Trustee shall have any liability for its failure to receive notices related to such Assignment of Mortgage.

The Depositor herewith delivers to the Trustee executed copies of the Mortgage Loan Purchase Agreement.

The parties hereto understand and agree that it is not intended that any Mortgage Loan be included in the Trust that is a “High Cost Home Loan” as defined by the Homeownership and Equity Protection Act of 1994 or any other applicable predatory or abusive lending law.

Section 2.02

Acceptance by Trustee of the Mortgage Loans .

The Trustee acknowledges the receipt by the Custodian on its behalf, subject to the provisions of Section 2.01 and subject to the review described below and any exceptions noted on the exception report described in the next paragraph below, the documents referred to in Section 2.01 above and all other assets included in the definition of “Trust Fund” and declares that the Custodian on behalf of the Trust Fund holds and will hold such documents and the other documents delivered to it constituting a Mortgage File pursuant to the Custodial Agreement, and that the Custodian on behalf of the Trust Fund holds or will hold all such assets and such other assets included in the definition of “Trust Fund” in trust for the exclusive use and benefit of all present and future Certificateholders.  

The Trustee agrees, for the benefit of the Certificateholders, to review (or cause the Custodian to review pursuant to the Custodial Agreement) each Mortgage File within 60 days after the Closing Date (or, with respect to any document delivered after the Startup Day, within 60 days of receipt and with respect to any Qualified Substitute Mortgage, within 60 days after the assignment thereof) and to certify, or cause the Custodian to certify, in substantially the form attached hereto as Exhibit H-1 that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents required to be delivered to it pursuant to Section 2.01 of this Agreement are in its possession, (ii) such documents have been reviewed by it and have not been mutilated, damaged or torn and relate to such Mortgage Loan, (iii) based on its examination and only as to the foregoing, the information set forth in the Data Tape Information that corresponds to items (1), (2), (3), (9), (31) and (33) but only as to whether there is a Prepayment Charge) of the Mortgage Loan Schedule accurately reflects information set forth in the Mortgage File, (iv) all Assignments of Mortgage or intervening assignments of mortgage, as applicable, have been submitted for recording and (v) each Mortgage Note has been endorsed as provided in Section 2.01(a)(i) of this Agreement and each Mortgage has been assigned in accordance with Section 2.01(a)(iii) of this Agreement.  It is herein acknowledged that, in conducting such review, the Custodian is under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face.

Prior to the first anniversary date of this Agreement the Trustee shall deliver, (or cause the Custodian to deliver) to the Depositor and the Servicer a final certification in the form annexed hereto as Exhibit H-2 evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon.

If in the process of reviewing the Mortgage Files and making or preparing, as the case may be, the certifications referred to above, the Trustee (or the Custodian, as applicable) finds any document or documents constituting a part of a Mortgage File to be missing or defective in any material respect, at the conclusion of its review the Trustee, upon its notification by the Custodian, if applicable, shall so notify the Seller, the Depositor, the Trustee and the Servicer.  In addition, upon the discovery by the Seller, Depositor, or the Servicer (or upon receipt by the Trustee of written notification of such breach) of a breach of any of the representations and warranties made by the Seller in the related Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interests of the related Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties.

The Depositor and the Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans and the Related Documents, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to the Trustee and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor.  In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and does hereby grant to the Trustee, on behalf of the Trust, a first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans and the Related Documents, and that this Agreement shall constitute a security agreement under applicable law.

Section 2.03

Repurchase or Substitution of Mortgage Loans by the Seller .

(a)

Upon discovery or receipt from the Custodian of written notice of any materially defective document in, or that a document is missing from, a Mortgage File or receipt from the Depositor, the Seller, the Servicer or the Custodian of written notice of the breach by the Seller of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement or in Section 2.04 in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders, the Trustee (or the Custodian, as applicable) shall promptly notify the Seller and the Servicer of such defect, missing document or breach and request that the Seller deliver such missing document or cure such defect or breach within 120 days or 150 days following the Closing Date, in the case of missing Mortgages or Assignments from the date the Seller was notified of such missing document, defect or breach, and if the Seller does not deliver such missing document or cure such defect or breach in all material respects during such period and such breach or defect materially and adversely affects the interests of the Certificateholders, the Trustee, shall enforce the Seller’s obligation under the Mortgage Loan Purchase Agreement and inform the Seller of its obligation to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the Determination Date following the expiration of such 120 day period (subject to Section 2.03(e)); provided that, in connection with any such breach that is susceptible to cure but that could not reasonably have been cured within such 120 day or 150 day period, if the Seller shall have commenced to cure such breach within such 120 day or 150 day period, the Seller shall be permitted to proceed thereafter diligently and expeditiously to cure the same within the additional period provided under the Mortgage Loan Purchase Agreement.  The Purchase Price for the repurchased Mortgage Loan shall be deposited in the Collection Account, and, upon receipt of written certification from the Servicer of such deposit, the Trustee shall cause the Custodian to release to the Seller the related Mortgage File and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan released pursuant hereto and neither the Trustee nor the Custodian shall have any further responsibility with regard to such Mortgage File.  In lieu of repurchasing any such Mortgage Loan as provided above, the Seller may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Defective Mortgage Loan) and substitute one or more Eligible Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(d). In addition to the foregoing, in case of a breach of the Seller’s representation set forth in Section 3.01(f) of the Mortgage Loan Purchase Agreement, the Seller shall reimburse the Trust for all costs or damages incurred by the Trust as a result of a violation of any predatory or abusive lending laws referred to therein (such amount, the “Reimbursement Amount”).  The Reimbursement Amount shall be delivered to the Servicer for deposit into the Collection Account within 10 days from the date the Seller was notified by the Trustee of the amount of all costs and damages.  It is understood and agreed that the obligation of the Seller to pay the Reimbursement Amount for deposit into the Collection Account and either to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy against the Seller respecting such omission, defect or breach available to the Trustee, on behalf of the Certificateholders.

(b)

[Reserved].

(c)

Within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of any representation, warranty or covenant of the Servicer set forth in Section 2.05 which materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the Servicer shall cure such breach in all material respects.

(d)

Any substitution of Eligible Substitute Mortgage Loans for Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the last Business Day that is within two years after the Closing Date.  As to any Defective Mortgage Loan for which the Seller substitutes an Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected by the Seller delivering to the Custodian on behalf of the Trustee, for such Eligible Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01(b), together with an Officer’s Certificate providing that each such Eligible Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Adjustment Amount (as described below), if any, in connection with such substitution.  The Trustee shall acknowledge (or cause the Custodian to acknowledge) receipt for such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, shall review (or cause the Custodian to review) such documents as specified in Section 2.02 and deliver (or cause the Custodian to deliver) to the Servicer, with respect to such Eligible Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit H-1, with any applicable exceptions noted thereon.  Within one year of the date of substitution, the Trustee shall deliver (or cause the Custodian to deliver) to the Servicer a certification substantially in the form of Exhibit H-2 hereto with respect to such Eligible Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.  Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the month of substitution are not part of the Trust Fund and will be retained by the Seller.  For the month of substitution, distributions to Certificateholders will reflect the collections and recoveries in respect of such Defective Mortgage Loan in the Collection Period preceding the month of substitution and the Depositor or the Seller, as the case may be, shall thereafter be entitled to retain all amounts subsequently received in respect of such Defective Mortgage Loan.  The Seller shall give or cause to be given written notice to the Certificateholders that such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Defective Mortgage Loan from the terms of this Agreement and the substitution of the Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee.  Upon such substitution, such Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this Agreement and, in the case of a substitution effected by the Seller, the Mortgage Loan Purchase Agreement, including, in the case of a substitution effected by the Seller all applicable representations and warranties thereof included in the Mortgage Loan Purchase Agreement and all applicable representations and warranties thereof set forth in Section 2.04, in each case as of the date of substitution.

For any month in which the Seller substitutes one or more Eligible Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Servicer will determine the amount (the “Substitution Adjustment Amount”), if any, by which the aggregate Purchase Price of all such Defective Mortgage Loans exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of the principal balance thereof as of the date of substitution, together with one month’s interest on such principal balance at the applicable Net Mortgage Interest Rate.  On the date of such substitution, the Seller will deliver or cause to be delivered to the Servicer for deposit in the Collection Account an amount equal to the Substitution Adjustment Amount, if any, and upon receipt by the Trustee or the Custodian of the related Eligible Substitute Mortgage Loan or Loans and certification by the Servicer of such deposit, the Trustee shall cause the Custodian to release to the Seller the related Mortgage File or Files and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall deliver to it and as shall be necessary to vest therein any Defective Mortgage Loan released pursuant hereto.

In addition, the Seller shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(l) of the Code or on “contributions after the startup date” under Section 860G(d)(l) of the Code, or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.  If such Opinion of Counsel can not be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given.

(e)

Upon discovery by the Seller, the Servicer or the Trustee that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties in this Agreement.  In connection therewith, the Seller shall repurchase or, subject to the limitations set forth in Section 2.03(d), substitute one or more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan.  In addition, upon discovery that a Mortgage Loan is defective in a manner that would cause it to be a “defective obligation” within the meaning of Treasury regulations relating to REMICs, the Seller shall cure the defect or make the required purchase or substitution no later than 90 days after the earlier of the discovery of the defect and receipt of notification of the defect.  Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.03(a), if made by the Seller.  The Trustee shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty.

Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that any functions with respect to the custody, acceptance, inspection, review and release of the Mortgage Files pursuant to Sections 2.01, 2.02 and 2.03 and preparation and delivery of any acknowledgment of receipt or certification (including, without limitation, the certifications in the form of Exhibit H-1 and Exhibit H-2) shall be performed by the Custodian pursuant to the terms and conditions of the Custodial Agreement.  The fees and expenses of the Custodian shall be paid by the Servicer.

Section 2.04

Representations and Warranties of the Seller with Respect to the Mortgage Loans .

The Seller hereby represents and warrants to the Trustee for the benefit of the Certificateholders and the Depositor that as of the Closing Date or as of such other date specifically provided herein:

(a)

The representations and warranties made by the Seller pursuant to Section 3.01 of the Mortgage Loan Purchase Agreement are hereby being made to the Trustee and are true and correct as of the Closing Date.

(b)

Any written agreement between the Mortgagor in respect of a Mortgage Loan and the Servicer modifying such Mortgagor’s obligation to make payments under the Mortgage Loan (such modified Mortgage Loan, a “Modified Mortgage Loan”) involved the application of some assessment of the Mortgagor’s ability to repay the Modified Mortgage Loan.

With respect to the representations and warranties set forth in this Section 2.04 that are made to the best of the Seller’s knowledge or as to which the Seller has no knowledge, if it is discovered by the Depositor, the Seller, the Servicer or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interest therein of the Certificateholders then, notwithstanding the Seller’s lack of knowledge with respect to the substance of such representation and warranty being inaccurate at the time the representation or warranty was made, such inaccuracy shall be deemed a breach of the applicable representation or warranty.

Upon discovery by the Depositor, the Seller, the Servicer or the Trustee of a breach of any of the representations and warranties contained in this Section that materially and adversely affects the value of any Mortgage Loan or the interest therein of the Certificateholders, the party discovering the breach shall give prompt written notice to the others and in no event later than two Business Days from the date of such discovery.  Within ninety days of its discovery or its receipt of notice of any such missing or materially defective documentation or any such breach of a representation or warranty, the Seller shall promptly deliver such missing document or cure such defect or breach in all material respects, or in the event such defect or breach cannot be cured, the Seller shall repurchase the affected Mortgage Loan or cause the removal of such Mortgage Loan from the Trust Fund and substitute for it one or more Eligible Substitute Mortgage Loans, in either case, in accordance with Section 2.03.

It is understood and agreed that the representations and warranties set forth in this Section 2.04 shall survive delivery of the Mortgage Files to the Trustee and shall inure to the benefit of the Certificateholders notwithstanding any restrictive or qualified endorsement or assignment.  It is understood and agreed that the obligations of the Seller set forth in this Section 2.03(a) to cure, substitute for or repurchase a Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement constitute the sole remedies available to the Depositor and to the Certificateholders or to the Trustee on their behalf respecting a breach of the representations and warranties contained in this Section 2.04.

Section 2.05

Representations, Warranties and Covenants of the Servicer .

The Servicer hereby represents, warrants and covenants to the Trustee, for the benefit of each of the Trustee and the Certificateholders and to the Depositor that as of the Closing Date or as of such date specifically provided herein:

(i)

The Servicer is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation and has all licenses necessary to carry on its business as now being conducted, except for such licenses, certificates and permits the absence of which, individually or in the aggregate, would not have a material adverse effect on the ability of the Servicer to conduct its business as it is presently conducted, and is licensed, qualified and in good standing in the states where the Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Servicer or to ensure the enforceability or validity of each Mortgage Loan; the Servicer has the power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Servicer and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Servicer, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally; and all requisite corporate action has been taken by the Servicer to make this Agreement valid and binding upon the Servicer in accordance with its terms;

(ii)

The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Servicer and will not result in the breach of any term or provision of the certificate of formation or the limited partnership agreement of the Servicer or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which the Servicer or its property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Servicer or its property is subject;

(iii)

The Servicer is an approved seller/servicer of conventional mortgage loans for Fannie Mae and has not been suspended as a mortgagee or servicer by the FHA and has the facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same type as the Mortgage Loans.  The Servicer is, and shall remain for as long as it is servicing the Mortgage Loans hereunder, in good standing as a servicer of mortgage loans for HUD, Fannie Mae or Freddie Mac, and no event has occurred, including but not limited to a change in insurance coverage, which would make the Servicer unable to comply with HUD, Fannie Mae or Freddie Mac eligibility requirements or which would require notification to any of HUD, Fannie Mae or Freddie Mac;

(iv)

This Agreement, and all documents and instruments contemplated hereby which are executed and delivered by the Servicer, constitute and will constitute valid, legal and binding obligations of the Servicer, enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by applicable bankruptcy laws and general principles of equity;

(v)

The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(vi)

There is no action, suit, proceeding or investigation pending or, to its knowledge, threatened against the Servicer that, either individually or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Servicer, or in any material impairment of the right or ability of the Servicer to carry on its business substantially as now conducted, or in any material liability on the part