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POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement
POOLING AND SERVICING AGREEMENT | Document Parties: BANC OF AMERICA FUNDING 2007-2 TRUST | WELLS FARGO BANK, N.A., | U.S. BANK NATIONAL ASSOCIATION, You are currently viewing:
This Pooling and Servicing Agreement involves

BANC OF AMERICA FUNDING 2007-2 TRUST | WELLS FARGO BANK, N.A., | U.S. BANK NATIONAL ASSOCIATION,

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Title: POOLING AND SERVICING AGREEMENT
Governing Law: New York     Date: 3/14/2007

POOLING AND SERVICING AGREEMENT, Parties: banc of america funding 2007-2 trust , wells fargo bank n.a. , u.s. bank national association
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<PAGE>
                                                                     Exhibit 4.1

                                                                  --------------
                                                                  EXECUTION COPY
                                                                   --------------


================================================================================




                      BANC OF AMERICA FUNDING CORPORATION,
                                  as Depositor,

                             WELLS FARGO BANK, N.A.,
                as Master Servicer and Securities Administrator,

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,
                                    as Trustee



                         POOLING AND SERVICING AGREEMENT

                             Dated February 27, 2007


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

                       Mortgage Pass-Through Certificates

                                  Series 2007-2





================================================================================

 

<PAGE>

                                TABLE OF CONTENTS

                                                                             Page


ARTICLE I DEFINITIONS....19

   Section 1.01        Defined Terms...........................................19
   Section 1.02        Interest Calculations...................................94

ARTICLE II CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES.............................................94

   Section 2.01        Conveyance of Mortgage Loans............................94
   Section 2.02        Acceptance by the Trustee or Custodian of the Mortgage
                       Loans...................................................99
   Section 2.03        Representations, Warranties and Covenants of the
                      Master Servicer........................................104
   Section 2.04        Representations and Warranties of the Depositor as to
                      the Mortgage Loans.....................................105
   Section 2.05        Designation of Interests in the REMICs.................106
   Section 2.06        Designation of Start-up Day............................107
   Section 2.07        REMIC Certificate Maturity Date........................107
   Section 2.08        Execution and Delivery of Certificates.................107
   Section 2.09        Establishment of the Trust.............................108
   Section 2.10        Purpose and Powers of the Trust........................108
   Section 2.11        Rights of the NIMS Insurer.............................108

ARTICLE III ADMINISTRATION AND MASTER SERVICING
  OF MORTGAGE LOANS...........................................................109

   Section 3.01        Master Servicing of the Mortgage Loans.................109
   Section 3.02        Monitoring of Servicers................................110
   Section 3.03        Fidelity Bond; Errors and Omissions Insurance..........111
   Section 3.04        Access to Certain Documentation........................112
   Section 3.05        Maintenance of Primary Mortgage Insurance Policy;
                      Claims.................................................112
   Section 3.06        Rights of the Depositor, the Securities Administrator
                      and the Trustee in Respect of the Master Servicer......113
   Section 3.07        Trustee to Act as Master Servicer......................113
   Section 3.08        Servicer Custodial Accounts and Escrow Accounts........113
   Section 3.09        Collection of Mortgage Loan Payments; Master Servicer
                      Custodial Account, Certificate Account, Cap Carryover
                      Reserve Account, Class 1-A-16 Reserve Fund, Class
                      1-A-18 Reserve Fund and Interest Rate Cap Agreements...114
   Section 3.10        Access to Certain Documentation and Information
                      Regarding the Mortgage Loans...........................119
   Section 3.11        Permitted Withdrawals from the Certificate Account and
                      the Master Servicer Custodial Account..................119
   Section 3.12        Maintenance of Hazard Insurance and Other Insurance....121
   Section 3.13        Presentment of Claims and Collection of Proceeds.......121

                                      -i-

 
<PAGE>

   Section 3.14        Enforcement of Due-On-Sale Clauses; Assumption
                      Agreements.............................................122
   Section 3.15        Realization Upon Defaulted Mortgage Loans; REO
                      Property...............................................122
   Section 3.16        Trustee to Cooperate; Release of Mortgage Files........124
   Section 3.17        Documents, Records and Funds in Possession of the
                      Master Servicer to be Held for the Trustee.............125
   Section 3.18        Master Servicer Compensation...........................125
   Section 3.19        Advances...............................................125
   Section 3.20        Annual Statement as to Compliance......................126
   Section 3.21        Assessments of Compliance and Attestation Reports......127
   Section 3.22        Reports to the Commission..............................129

ARTICLE IV MASTER SERVICER'S CERTIFICATE.....................................136

   Section 4.01        Master Servicer's Certificate..........................136

ARTICLE V PAYMENTS AND STATEMENTS TO CERTIFICATEHOLDERS;
REMIC ADMINISTRATION....136

   Section 5.01        Distributions..........................................136
   Section 5.02        Priorities of Distributions on the Shifting Interest
                      Certificates...........................................137
   Section 5.03        Priorities of Distributions on the Overcollateralized
                      Certificates...........................................148
   Section 5.04        Allocation of Losses...................................160
   Section 5.05        Statements to Certificateholders.......................164
   Section 5.06        REMIC Tax Returns and Reports to Certificateholders....171
   Section 5.07        Tax Matters Person.....................................172
   Section 5.08        Rights of the Tax Matters Person in Respect of the
                      Securities Administrator...............................172
   Section 5.09        REMIC and Grantor Trust Related Covenants..............172
   Section 5.10         Determination of One-Month LIBOR.......................174
   Section 5.11        Master Servicer, Securities Administrator and Trustee
                      Indemnification........................................175
   Section 5.12        Grantor Trust Administration...........................175
   Section 5.13        Distributions on the Exchangeable Certificates.........176
   Section 5.14        Supplemental Interest Trust............................177
   Section 5.15        Tax Treatment of Swap Payments and Swap Termination
                      Payments...............................................178

ARTICLE VI THE CERTIFICATES..................................................179

   Section 6.01        The Certificates.......................................179
   Section 6.02        Registration of Transfer and Exchange of Certificates..180
   Section 6.03        Mutilated, Destroyed, Lost or Stolen Certificates......185
   Section 6.04        Persons Deemed Owners..................................185
    Section 6.05        Transfer of Exchangeable REMIC Certificates and
                      Exchangeable Certificates..............................185
   Section 6.06        Exchanges of Exchangeable REMIC Certificates and
                      Exchangeable Certificates..............................186

                                      -ii-

 
<PAGE>

ARTICLE VII THE DEPOSITOR AND THE MASTER SERVICER............................187

   Section 7.01        Respective Liabilities of the Depositor and the Master
                      Servicer...............................................187
   Section 7.02        Merger or Consolidation of the Depositor or the Master
                      Servicer...............................................187
   Section 7.03        Limitation on Liability of the Depositor, the Master
                      Servicer and Others....................................188
   Section 7.04        Depositor and Master Servicer Not to Resign............189

ARTICLE VIII DEFAULT.........................................................189

   Section 8.01        Events of Default......................................189
   Section 8.02        Remedies of Trustee....................................191
   Section 8.03        Directions by Certificateholders and Duties of Trustee
                      During Event of Default................................191
   Section 8.04        Action upon Certain Failures of the Master Servicer
                      and upon Event of Default..............................192
   Section 8.05        Trustee to Act; Appointment of Successor...............192
   Section 8.06        Notification to Certificateholders.....................193

ARTICLE IX THE TRUSTEE AND THE SECURITIES ADMINISTRATOR......................193

   Section 9.01        Duties of Trustee and Securities Administrator.........193
   Section 9.02        Certain Matters Affecting the Trustee and the
                      Securities Administrator...............................199
   Section 9.03        Neither Trustee nor Securities Administrator Liable
                      for Certificates or Mortgage Loans.....................200
   Section 9.04        Trustee and Securities Administrator May Own
                      Certificates...........................................201
   Section 9.05        Eligibility Requirements for Trustee and the
                      Securities Administrator...............................201
   Section 9.06        Resignation and Removal of Trustee and the Securities
                       Administrator..........................................202
   Section 9.07        Successor Trustee or Securities Administrator..........203
   Section 9.08        Merger or Consolidation of Trustee or Securities
                      Administrator..........................................204
   Section 9.09        Appointment of Co-Trustee or Separate Trustee..........204
   Section 9.10        Authenticating Agents..................................206
   Section 9.11        Securities Administrator's Fees and Expenses and
                      Trustee's Fees and Expenses............................206
   Section 9.12        Appointment of Custodian...............................207
   Section 9.13        Paying Agents..........................................207
   Section 9.14        Limitation of Liability................................208
   Section 9.15        Trustee or Securities Administrator May Enforce Claims
                      Without Possession of Certificates.....................209
   Section 9.16        Suits for Enforcement..................................209
   Section 9.17        Waiver of Bond Requirement.............................209
   Section 9.18        Waiver of Inventory, Accounting and Appraisal
                      Requirement............................................209

ARTICLE X TERMINATION........................................................210

   Section 10.01       Termination upon Purchase or Liquidation of All
                      Mortgage Loans.........................................210
   Section 10.02       Additional Termination Requirements....................212

                                     -iii-

 
<PAGE>

ARTICLE XI MISCELLANEOUS PROVISIONS..........................................213

   Section 11.01       Amendment..............................................213
   Section 11.02       Recordation of Agreement; Counterparts.................215
   Section 11.03       Limitation on Rights of Certificateholders.............215
   Section 11.04       Governing Law..........................................216
   Section 11.05       Notices................................................217
   Section 11.06       Severability of Provisions.............................217
   Section 11.07       Certificates Nonassessable and Fully Paid..............217
   Section 11.08       Access to List of Certificateholders...................218
   Section 11.09       Recharacterization.....................................218
   Section 11.10       Regulation AB Compliance; Intent of the Parties;
                      Reasonableness.........................................218
   Section 11.11       Third Party Beneficiary................................219

                                      -iv-

 

<PAGE>


                                            EXHIBITS
                Form of Face of Class 1-A-R Certificate
Exhibit A-1A1                 Form of Face of Class 1-A-1 Certificate
Exhibit A-1A2                 Form of Face of Class 1-A-2 Certificate
Exhibit A-1A3                  Form of Face of Class 1-A-3 Certificate
Exhibit A-1A4                 Form of Face of Class 1-A-4 Certificate
Exhibit A-1A5                 Form of Face of Class 1-A-5 Certificate
Exhibit A-1A6                 Form of Face of Class 1-A-6 Certificate
Exhibit A-1A7                 Form of Face of Class 1-A-7 Certificate
Exhibit A-1A8                 Form of Face of Class 1-A-8 Certificate
Exhibit A-1A9                 Form of Face of Class 1-A-9 Certificate
Exhibit A-1A10                Form of Face of Class 1-A-10 Certificate
Exhibit A-1A11                Form of Face of Class 1-A-11 Certificate
Exhibit A-1A12                Form of Face of Class 1-A-12 Certificate
Exhibit A-1A13                Form of Face of Class 1-A-13 Certificate
Exhibit A-1A14                Form of Face of Class 1-A-14 Certificate
Exhibit A-1A15                Form of Face of Class 1-A-15 Certificate
Exhibit A-1A16                Form of Face of Class 1-A-16 Certificate
Exhibit A-1A17                Form of Face of Class 1-A-17 Certificate
Exhibit A-1A18                Form of Face of Class 1-A-18 Certificate
Exhibit A-1A19                Form of Face of Class 1-A-19 Certificate
Exhibit A-1A20                Form of Face of Class 1-A-20 Certificate
Exhibit A-1A21                Form of Face of Class 1-A-21 Certificate
Exhibit A-1A22                Form of Face of Class 1-A-22 Certificate
Exhibit A-1A23                Form of Face of Class 1-A-23 Certificate
Exhibit A-1A24                Form of Face of Class 1-A-24 Certificate
Exhibit A-1A25                 Form of Face of Class 1-A-25 Certificate
Exhibit A-1A26                Form of Face of Class 1-A-26 Certificate
Exhibit A-1A27                Form of Face of Class 1-A-27 Certificate
Exhibit A-1A28                Form of Face of Class 1-A-28 Certificate
Exhibit A-1A29                Form of Face of Class 1-A-29 Certificate
Exhibit A-1A30                Form of Face of Class 1-A-30 Certificate
Exhibit A-1A31                Form of Face of Class 1-A-31 Certificate
Exhibit A-1A32                Form of Face of Class 1-A-32 Certificate
Exhibit A-1A33                Form of Face of Class 1-A-33 Certificate
Exhibit A-1A34                Form of Face of Class 1-A-34 Certificate
Exhibit A-1A35                Form of Face of Class 1-A-35 Certificate
Exhibit A-1A36                 Form of Face of Class 1-A-36 Certificate
Exhibit A-1A37                Form of Face of Class 1-A-37 Certificate
Exhibit A-1A38                Form of Face of Class 1-A-38 Certificate
Exhibit A-1A39                Form of Face of Class 1-A-39 Certificate
Exhibit A-1A40                Form of Face of Class 1-A-40 Certificate
Exhibit A-1A41                Form of Face of Class 1-A-41 Certificate
Exhibit A-1A42                Form of Face of Class 1-A-42 Certificate
Exhibit A-2A1                 Form of Face of Class 2-A-1 Certificate

                                      -v-

 
<PAGE>

Exhibit A-30IO                Form of Face of Class 30-IO Certificate
Exhibit A-30PO                Form of Face of Class 30-PO Certificate
Exhibit A-TA1A                Form of Face of Class T-A-1A Certificate
Exhibit A-TA1B                Form of Face of Class T-A-1B Certificate
Exhibit A-TA2                 Form of Face of Class T-A-2 Certificate
Exhibit A-TA3                 Form of Face of Class T-A-3 Certificate
Exhibit A-TA4                  Form of Face of Class T-A-4 Certificate
Exhibit A-TA5                 Form of Face of Class T-A-5 Certificate
Exhibit A-TA6                 Form of Face of Class T-A-6 Certificate
Exhibit B-M1                  Form of Face of Class M-1 Certificate
Exhibit B-B1                  Form of Face of Class B-1 Certificate
Exhibit B-B2                  Form of Face of Class B-2 Certificate
Exhibit B-B3                  Form of Face of Class B-3 Certificate
Exhibit B-B4                  Form of Face of Class B-4 Certificate
Exhibit B-B5                  Form of Face of Class B-5 Certificate
Exhibit B-B6                  Form of Face of Class B-6 Certificate
Exhibit B-TM1                 Form of Face of Class T-M-1 Certificate
Exhibit B-TM2                 Form of Face of Class T-M-2 Certificate
Exhibit B-TM3                 Form of Face of Class T-M-3 Certificate
Exhibit B-TM4                 Form of Face of Class T-M-4 Certificate
Exhibit B-TM5                 Form of Face of Class T-M-5 Certificate
Exhibit B-TB1                  Form of Face of Class T-B-1 Certificate
Exhibit B-CE                  Form of Face of Class CE Certificate
Exhibit B-P                   Form of Face of Class P Certificate
Exhibit C                     Form of Reverse of all Certificates
Exhibit D-1                    Loan Group 1 Mortgage Loan Schedule
Exhibit D-2                   Loan Group 2 Mortgage Loan Schedule
Exhibit D-T2                  Loan Group T2 Mortgage Loan Schedule
Exhibit E                     Request for Release of Documents
Exhibit F                      Form of Certification of Establishment of Account
Exhibit G-1                   Form of Transferor's Certificate
Exhibit G-2A                  Form 1 of Transferee's Certificate
Exhibit G-2B                  Form 2 of Transferee's Certificate
Exhibit H                     Form of Transferee Representation Letter for ERISA
                             Restricted Certificates
Exhibit I                     Form of Affidavit Regarding Transfer of Residual
                             Certificate
Exhibit J                     List of Recordation States
Exhibit K                     Form of Initial Certification
Exhibit L                     Form of Final Certification
Exhibit M                     Form of Sarbanes-Oxley Certification
Exhibit N                      Relevant Servicing Criteria
Exhibit O                     Additional Form 10-D Disclosure
Exhibit P                     Additional Form 10-K Disclosure
Exhibit Q                     Form 8-K Disclosure Information
Exhibit R                     Form of Back-up Certification
Exhibit S                     Form of Additional Disclosure Notification

                                      -vi-

 
<PAGE>

Exhibit T-1                   Class 1-A-16 Interest Rate Cap Agreement
Exhibit T-2                   Class 1-A-18 Interest Rate Cap Agreement
Exhibit T-3                   Class T-A-4 Interest Rate Cap Agreement
Exhibit U-1                   Interest Rate Swap Agreement A
Exhibit U-2                   Interest Rate Swap Agreement B
Exhibit U-3                   Interest Rate Swap Agreement C
Exhibit V                     Principal Balance Schedules
Exhibit W                     Available Combinations
Exhibit X                     Form of Request for Exchange of Exchangeable REMIC
                             Certificates or Exchangeable
                             Certificates
Exhibit Y                     Form of Transferor Certificate Regarding Transfer
                             of Residual Certificate

                                     -vii-

 

<PAGE>

                          POOLING AND SERVICING AGREEMENT

     THIS POOLING AND SERVICING   AGREEMENT,   dated   February 27, 2007, is hereby
executed   by and   among   BANC   OF   AMERICA   FUNDING   CORPORATION,   as   depositor
(together with its permitted   successors and assigns,   the   "Depositor"),   WELLS
FARGO BANK, N.A., as master servicer (together with its permitted successors and
assigns,    in   such    capacity,    the   "Master    Servicer")   and   as   securities
administrator   (together   with its   permitted   successors   and assigns,   in such
capacity, the "Securities   Administrator"),   and U.S. BANK NATIONAL ASSOCIATION,
as trustee (together with its permitted successors and assigns, the "Trustee").

                          W I T N E S S E T H T H A T:
                            - - - - - - - - - - - - - -

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

                              PRELIMINARY STATEMENT

     The Depositor intends to sell pass-through certificates (collectively,   the
"Certificates"),   to be   issued   hereunder   in   multiple   Classes,   which in the
aggregate,    together   with   the    Uncertificated    Class    Swap-IOA    Interest,
Uncertificated    Class   Swap-IOB   Interest   and   Uncertificated   Class   Swap-IOC
Interest issued by the Upper-Tier II REMIC,   will evidence the entire beneficial
ownership interest in the Trust Estate created hereunder.   The Certificates will
consist of sixty-eight   Classes of Certificates,   designated as the Class 1-A-1,
Class 1-A-2,   Class 1-A-3,   Class 1-A-4,   Class 1-A-5, Class 1-A-6, Class 1-A-7,
Class 1-A-8,   Class 1-A-9,   Class   1-A-10,   Class 1-A-11,   Class   1-A-12,   Class
1-A-13,   Class 1-A-14,   Class 1-A-15,   Class 1-A-16, Class 1-A-17, Class 1-A-18,
Class 1-A-19,   Class 1-A-20,   Class 1-A-21,   Class 1-A-22,   Class 1-A-23,   Class
1-A-24,   Class 1-A-25,   Class 1-A-26,   Class 1-A-27, Class 1-A-28, Class 1-A-29,
Class 1-A-30,   Class 1-A-31,   Class 1-A-32,   Class 1-A-33,   Class 1-A-34,   Class
1-A-35,   Class 1-A-36,   Class 1-A-37,   Class 1-A-38, Class 1-A-39, Class 1-A-40,
Class 1-A-41, Class 1-A-42, Class 2-A-1, Class 30-IO, Class 30-PO, Class T-A-1A,
Class T-A-1B,   Class T-A-2,   Class T-A-3, Class T-A-4, Class T-A-5, Class T-A-6,
Class M-1,   Class B-1,   Class B-2,   Class B-3,   Class B-4, Class B-5, Class B-6,
Class T-M-1,   Class T-M-2,   Class T-M-3,   Class T-M-4, Class T-M-5, Class T-B-1,
Class CE,   Class P and the Class 1-A-R   Certificates.   The   descriptions   of the
Shifting Interest Lower-Tier REMIC, the Shifting Interest Middle-Tier REMIC, the
Shifting Interest   Upper-Tier REMIC, the Lower-Tier II REMIC, the Middle-Tier II
REMIC   and the   Upper-Tier   II REMIC   that   follow   are part of the   Preliminary
Statement.   Any   inconsistencies   or   ambiguities   in this   Agreement   or in the
administration   of this   Agreement   shall be   resolved   pursuant to the terms of
Section   11.01   hereof in a manner   that   preserves   the   validity of such REMIC
elections described below.


 
<PAGE>


                       Shifting Interest Lower-Tier REMIC

     As provided herein,   the Securities   Administrator will make an election to
treat the segregated pool of assets consisting of the Shifting Interest Mortgage
Loans and certain other related   assets subject to this Agreement (but exclusive
of the Class 1-A-16 Interest Rate Cap Agreement,   the Class 1-A-18 Interest Rate
Cap Agreement, Class 1-A-16 Reserve Fund and the Class 1-A-18 Reserve Fund) as a
real   estate   mortgage   investment   conduit   ("REMIC")   for   federal   income tax
purposes, and such segregated pool of assets will be designated as the "Shifting
Interest   Lower-Tier   REMIC." The Class SI-LR   Interest will   represent the sole
class of "residual   interests"   in the Shifting   Interest   Lower-Tier   REMIC for
purposes of the REMIC Provisions. The following table irrevocably sets forth the
designation,   the Uncertificated Shifting Interest Lower-Tier REMIC Pass-Through
Rate, the initial Uncertificated   Balance, and solely for purposes of satisfying
Treasury Regulations Section 1.860G-1(a)(4)(iii),   the "latest possible maturity
date"   for   each of the   Uncertificated   Shifting   Interest   Lower-Tier   Regular
Interests.   None of the Uncertificated   Shifting Interest   Lower-Tier   Interests
will be certificated.

<TABLE>
<CAPTION>
------------------------ ----------------------------- --------------------------------
                                                           Uncertificated Shifting
                             Initial Uncertificated         Interest Lower-Tier REMIC
    Designation(1)                  Balance                     Pass-Through Rate
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>

          1-L                    $522,200,947.46                      6.10%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-LS                         $25,242.56                      6.10%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-LIO                    $21,847,716.91(2)                   6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-LPO                     $3,755,105.72                       (3)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          2-L                     $43,274,158.38                   Variable(4)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         2-LS                          $2,078.24                   Variable(4)
------------------------ ----------------------------- --------------------------------
</TABLE>

(1)   Solely   for   purposes   of   Section    1.860G-1(a)(4)(iii)   of   the   Treasury
     regulations,   the Distribution Date immediately following the maturity date
     for the Shifting   Interest   Mortgage Loan with the latest maturity date has
     been    designated   as   the   "latest    possible    maturity   date"   for   each
     Uncertificated Shifting Interest Lower-Tier Regular Interest.

(2)   Calculated in accordance with the definition of "Notional Amount" herein.

(3)   The Class 1-LPO Interest will not bear interest.

(4)   Calculated in accordance   with the definition of   "Uncertificated   Shifting
     Interest Lower-Tier REMIC Pass-Through Rate" herein.

                                      -2-

 

<PAGE>


                       Shifting Interest Middle-Tier REMIC

     As provided herein,   the Securities   Administrator will make an election to
treat the segregated pool of assets   consisting of the   Uncertificated   Shifting
Interest   Lower-Tier   Regular   Interests   as a   REMIC   for   federal   income   tax
purposes, and such segregated pool of assets will be designated as the "Shifting
Interest   Middle-Tier   REMIC." The Class SI-MR   Interest will represent the sole
class of "residual   interests" in the Shifting   Interest   Middle-Tier   REMIC for
purposes of the REMIC Provisions. The following table irrevocably sets forth the
designation, the Uncertificated Shifting Interest Middle-Tier REMIC Pass-Through
Rate, the initial Uncertificated   Balance, and solely for purposes of satisfying
Treasury Regulations Section 1.860G-1(a)(4)(iii),   the "latest possible maturity
date"   for each of the   Uncertificated   Shifting   Interest   Middle-Tier   Regular
Interests.   None of the Uncertificated   Shifting Interest Middle-Tier   Interests
will be certificated.

<TABLE>
<CAPTION>
------------------------ ----------------------------- --------------------------------
                                                            Uncertificated Shifting
                              Initial Uncertificated        Interest Middle-Tier REMIC
  Designations(1)                     Balance                     Pass-Through Rate
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>

MRI-1-A-1                               $49,697,800.00                7.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-R                                      $100.00                6.10%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-2                              $106,425,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-3                                $5,366,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-4                               $68,234,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-5                               $24,601,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-6                               $75,649,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-7                               $17,185,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-8                               $19,820,200.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-1-A-9                              $130,000,000.00                6.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-2-A-1                               $41,198,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-IO                                $21,847,716.91(3)                 (4)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-PO                                    $3,755,105.72                0.00%
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-M-1                                   $9,679,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-B-1                                   $4,839,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-B-2                                   $4,269,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-B-3                                   $3,131,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-B-4                                   $2,277,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-B-5                                   $1,708,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRI-B-6                                  $1,423,326.64             Variable(2)
------------------------ ----------------------------- --------------------------------
</TABLE>

(1)   Solely   for   purposes   of   Section    1.860G-1(a)(4)(iii)   of   the   Treasury
     regulations,   the Distribution Date immediately following the maturity date
     for the Shifting   Interest   Mortgage Loan with the latest maturity date has
     been    designated   as   the   "latest    possible    maturity   date"   for   each
     Uncertificated Shifting Interest Middle-Tier Regular Interest.

(2)   Calculated in accordance   with the definition of   "Uncertificated   Shifting
     Interest Middle-Tier REMIC Pass-Through Rate" herein.

(3)   Calculated in accordance with the definition of "Notional Amount" herein.

(4)   For federal income tax purposes, the Class MRI-IO Interest will be entitled
     to 100% of the amounts distributed on the Uncertificated   Shifting Interest
     Lower-Tier Class 1-LIO Interest.

                                      -3-

 
<PAGE>

     The foregoing   Shifting   Interest   Lower-Tier   REMIC and Shifting   Interest
Middle-Tier   REMIC structure is intended to cause all the cash from the Shifting
Interest Mortgage Loans to flow through the Shifting   Interest   Upper-Tier REMIC
as   cash   flow on a   Shifting   Interest   Upper-Tier   Regular   Interest,   without
creating   any   shortfall,   actual or potential   (other than for losses),   to any
Shifting Interest Upper-Tier Regular Interest.   To the extent that the structure
is believed to diverge from such intention, the party identifying such ambiguity
or drafting error shall notify the other parties hereto,   and the parties hereto
shall attempt to resolve such   ambiguity or drafting   error in   accordance   with
Section 11.01 hereto.

                                       -4-

 

<PAGE>


                       Shifting Interest Upper-Tier REMIC

     As provided herein,   the Securities   Administrator will make an election to
treat the segregated pool of assets   consisting of the   Uncertificated   Shifting
Interest   Middle-Tier   Regular   Interests   as a REMIC   for   federal   income   tax
purposes, and such segregated pool of assets will be designated as the "Shifting
Interest   Upper-Tier   REMIC." The Class SI-UR   Interest will   represent the sole
class of "residual   interests"   in the Shifting   Interest   Upper-Tier   REMIC for
purposes of the REMIC Provisions. The following table irrevocably sets forth (or
describes)   the   designation,   the   Interest   Rate,   and Initial   Uncertificated
Balance   or   Notional   Amount   for each   Shifting   Interest   Upper-Tier   Regular
Interest   comprising the "regular interests" in the Shifting Interest Upper-Tier
REMIC for purposes of the REMIC Provisions and solely for purposes of Satisfying
Treasury Regulations Section 1.860G-1(a)(4)(iii),   the "latest possible maturity
date" for each class of Shifting Interest Upper-Tier Regular Interests.

<TABLE>
<CAPTION>
------------------------ ----------------------------- --------------------------------
                            Initial Uncertificated  
    Designation(1)         Balance or Notional Amount             Interest Rate
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>

         1-A-R                              $100.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-1                       $49,697,800.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-3                      $106,425,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-4                        $4,434,375.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-5                        $5,366,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-6                          $223,583.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-7                       $68,234,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          1-A-8                        $2,843,083.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         1-A-9                       $24,601,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-10                         $1,025,041.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-11                        $75,649,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-12                         $3,152,041.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-13                       $17,185,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-14                          $716,041.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-15                        $9,362,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-16                      $110,560,000.00                     (4)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-17                        $6,555,000.00                     (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-18                       $19,440,000.00                    (5)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-19                      $130,000,000.00(3)                 (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-20                           $10,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-21                           $10,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-22                        $3,783,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        1-A-23                          $100,200.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
       1-A-28(3)                     $49,697,800.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         2-A-1                       $41,198,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         30-IO                       $21,847,716.91(3)                 (6)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         30-PO                        $3,755,105.72                    (7)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          M-1                         $9,679,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
</TABLE>

                                      -5-

 
<PAGE>

<TABLE>
<CAPTION>

------------------------ ----------------------------- --------------------------------
                            Initial Uncertificated  
    Designation(1)         Balance or Notional Amount             Interest Rate
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
          B-1                         $4,839,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          B-2                         $4,269,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          B-3                         $3,131,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          B-4                         $2,277,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          B-5                         $1,708,000.00                    (2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          B-6                         $1,423,326.64                    (2)
------------------------ ----------------------------- --------------------------------
</TABLE>

(1)   Solely   for   purposes   of   Section    1.860G-1(a)(4)(iii)   of   the   Treasury
     regulations,   the Distribution Date immediately following the maturity date
     for the Shifting   Interest   Mortgage Loan with the latest maturity date has
     been   designated as the "latest   possible   maturity date" for each Shifting
     Interest Upper-Tier Regular Interest.

(2)   Interest   will   accrue   on   these   Shifting   Interest    Upper-Tier   Regular
     Interests   at a rate equal to the   Pass-Through   Rate of the   Corresponding
     Class of Shifting Interest Certificates.

(3)   Calculated in accordance with the definition of "Notional Amount" herein.

(4)   Interest   will accrue on the   Shifting   Interest   Upper-Tier   Class   1-A-16
     Regular   Interest   at   a   rate   equal   to   the   Pass-Through   Rate   of   the
     Corresponding   Class   of   Shifting   Interest   Certificates.    The   Shifting
     Interest   Upper-Tier   Class 1-A-16 Regular Interest will not be entitled to
     any amounts in respect of the Class 1-A-16 Interest Rate Cap Agreement.

(5)   Interest   will accrue on the   Shifting   Interest   Upper-Tier   Class   1-A-18
     Regular   Interest   at   a   rate   equal   to   the   Pass-Through   Rate   of   the
     Corresponding   Class   of   Shifting   Interest   Certificates.    The   Shifting
     Interest   Upper-Tier   Class 1-A-18 Regular Interest will not be entitled to
     any amounts in respect of the Class 1-A-18 Interest Rate Cap Agreement.

(6)   The   Class   30-IO   Interest   will   be   entitled   to   100%   of   the   amounts
     distributed   on the   Uncertificated   Shifting   Interest   Middle-Tier   Class
     MRI-IO Regular Interest.

(7)   The Class 30-PO Interest will not bear interest.

                                      -6-

 

<PAGE>

                                Lower-Tier II REMIC

     As provided herein,   the Securities   Administrator will make an election to
treat the   segregated   pool of assets   consisting of the Group T2 Mortgage Loans
and certain other related assets subject to this Agreement (but exclusive of the
Class T-A-4   Interest   Rate Cap   Agreement,   the Class T-A-4   Interest   Rate Cap
Agreement   Account,   the   Supplemental   Interest   Trust,   the Interest Rate Swap
Agreements,   the Swap Account and the Cap Carryover   Reserve   Account) as a real
estate mortgage   investment   conduit   ("REMIC") for federal income tax purposes,
and such   segregated   pool of assets will be   designated as the   "Lower-Tier   II
REMIC." The Class II-LR   Interest   will   represent   the sole class of   "residual
interests" in the Lower-Tier II REMIC for purposes of the REMIC Provisions.   The
following   table   irrevocably   sets forth the   designation,   the   Uncertificated
Lower-Tier II REMIC Pass-Through Rate, the initial   Uncertificated   Balance, and
solely    for    purposes    of      satisfying     Treasury     Regulations     Section
1.860G-1(a)(4)(iii),   the   "latest   possible   maturity   date"   for   each   of the
Uncertificated   Lower-Tier   II   Regular   Interests.   None of the   Uncertificated
Lower-Tier II Interests will be certificated.

<TABLE>
<CAPTION>

----------------------------- ------------------------ --------------------------------
                               Initial Uncertificated     Uncertificated Lower-Tier II
       Designation(1)                   Balance                REMIC Pass-Through Rate
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
            LRII-I                      $177,623,923.77             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-17-A                      $4,074,257.10             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-17-B                      $4,074,257.10             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-18-A                      $4,760,988.52             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-18-B                      $4,760,988.52             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-19-A                       $4,576,078.76             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-19-B                       $4,576,078.76             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-20-A                       $4,398,338.29             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-20-B                       $4,398,338.29             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-21-A                       $4,227,489.56             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-21-B                       $4,227,489.56             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-22-A                      $4,063,265.73             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-22-B                      $4,063,265.73             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-23-A                      $3,905,410.28             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-23-B                      $3,905,410.28             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-24-A                      $2,628,995.69             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-24-B                      $2,628,995.69              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-25-A                      $1,803,913.85              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-25-B                      $1,803,913.85              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-26-A                      $1,733,817.79             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-26-B                      $1,733,817.79             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-27-A                      $1,666,440.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-27-B                      $1,666,440.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-28-A                      $1,318,581.44             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-28-B                      $1,318,581.44             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-37-A                      $1,120,582.49             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-37-B                      $1,120,582.49             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
</TABLE>

                                      -7-

 
<PAGE>
<TABLE>
<CAPTION>

----------------------------- ------------------------ --------------------------------
                               Initial Uncertificated     Uncertificated Lower-Tier II
       Designation(1)                   Balance               REMIC Pass-Through Rate
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
         LRIIA-38-A                         $579,338.98             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-38-B                        $579,338.98             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-39-A                         $66,267.96             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-39-B                         $66,267.96             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-40-A                         $63,690.21             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-40-B                         $63,690.21             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-41-A                         $61,212.51              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-41-B                         $61,212.51              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-42-A                         $58,831.02              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-42-B                         $58,831.02             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-43-A                         $56,542.00             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-43-B                         $56,542.00             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-44-A                         $54,341.85             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-44-B                         $54,341.85             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-45-A                         $52,227.16             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-45-B                         $52,227.16             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-46-A                         $50,194.57             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-46-B                         $50,194.57             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-47-A                         $48,240.93             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-47-B                         $48,240.93             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-48-A                         $46,363.18             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-48-B                         $46,363.18             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-49-A                         $44,558.36             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-49-B                         $44,558.36             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-50-A                         $61,658.92             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-50-B                         $61,658.92             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-51-A                         $69,451.34             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-51-B                         $69,451.34             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-52-A                         $66,747.06             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-52-B                         $66,747.06             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-53-A                         $64,147.84             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-53-B                         $64,147.84             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-54-A                         $61,649.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-54-B                         $61,649.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-55-A                         $59,248.51             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-55-B                         $59,248.51             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-56-A                         $56,940.69             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-56-B                         $56,940.69             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-57-A                         $54,722.57             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-57-B                         $54,722.57             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-58-A                         $52,590.67             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-58-B                         $52,590.67             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
</TABLE>

                                      -8-

 
<PAGE>
<TABLE>
<CAPTION>

----------------------------- ------------------------ --------------------------------
                               Initial Uncertificated     Uncertificated Lower-Tier II
       Designation(1)                   Balance               REMIC Pass-Through Rate
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>

         LRIIA-59-A                         $50,541.62             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-59-B                         $50,541.62             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-60-A                         $48,572.25             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-60-B                         $48,572.25             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-61-A                         $46,679.44             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-61-B                         $46,679.44             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-62-A                        $404,124.26             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIA-62-B                        $404,124.26             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-28-A                        $566,191.21             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-28-B                        $566,191.21             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-29-A                      $3,078,851.60             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-29-B                      $3,078,851.60             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-30-A                      $2,959,179.21             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-30-B                      $2,959,179.21             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-31-A                      $2,844,149.79             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-31-B                      $2,844,149.79             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-32-A                      $2,733,583.50             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-32-B                      $2,733,583.50             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-33-A                      $2,627,307.44             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-33-B                      $2,627,307.44             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-34-A                      $2,525,155.39             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-34-B                      $2,525,155.39             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-35-A                      $2,426,967.57             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-35-B                      $2,426,967.57             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-36-A                      $2,332,590.40             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-36-B                      $2,332,590.40             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-40-A                        $874,576.13             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-40-B                        $874,576.13             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-41-A                      $1,018,435.06             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-41-B                      $1,018,435.06             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-42-A                        $964,672.23             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-42-B                        $964,672.23             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-43-A                        $913,243.46             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-43-B                        $913,243.46             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-44-A                        $864,054.00             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-44-B                        $864,054.00             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-45-A                        $817,012.81             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-45-B                        $817,012.81             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-46-A                        $772,032.48             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-46-B                        $772,032.48             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-47-A                        $106,613.41             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIB-47-B                        $106,613.41             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
</TABLE>

                                      -9-

 
<PAGE>
<TABLE>
<CAPTION>

----------------------------- ------------------------ --------------------------------
                               Initial Uncertificated     Uncertificated Lower-Tier II
       Designation(1)                   Balance               REMIC Pass-Through Rate
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
         LRIIC-1-A                       $1,896,401.58             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-1-B                       $1,896,401.58             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-2-A                       $2,090,453.08             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-2-B                       $2,090,453.08             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-3-A                       $2,277,792.54             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-3-B                       $2,277,792.54             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-4-A                       $2,457,296.35             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-4-B                       $2,457,296.35             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-5-A                       $2,627,867.48             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-5-B                       $2,627,867.48             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-6-A                       $2,788,446.50             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-6-B                       $2,788,446.50             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-7-A                       $2,938,022.29             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-7-B                       $2,938,022.29             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-8-A                       $3,075,584.25             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-8-B                       $3,075,584.25             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-9-A                       $3,200,192.35             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-9-B                       $3,200,192.35             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-10-A                      $3,304,965.54             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-10-B                      $3,304,965.54             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-11-A                      $3,376,383.18             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-11-B                      $3,376,383.18             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-12-A                      $3,157,208.78             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
          LRIIC-12-B                      $3,157,208.78             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
          LRIIC-13-A                      $3,034,637.27             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-13-B                      $3,034,637.27             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-14-A                      $2,916,816.48             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-14-B                      $2,916,816.48             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-15-A                      $2,803,562.52             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-15-B                       $2,803,562.52             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-16-A                       $2,694,698.64             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-16-B                       $2,694,698.64             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-17-A                         $459,671.19             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-17-B                         $459,671.19             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-24-A                       $1,124,680.94             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-24-B                       $1,124,680.94             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-25-A                      $1,803,913.84             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-25-B                      $1,803,913.84             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-26-A                      $1,733,817.80             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-26-B                      $1,733,817.80             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-27-A                      $1,666,440.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-27-B                      $1,666,440.63              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
</TABLE>

                                      -10-

 
<PAGE>
<TABLE>
<CAPTION>

----------------------------- ------------------------ --------------------------------
                               Initial Uncertificated     Uncertificated Lower-Tier II
       Designation(1)                   Balance               REMIC Pass-Through Rate
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
         LRIIC-28-A                      $1,318,581.43             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-28-B                      $1,318,581.43             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-37-A                        $590,125.72             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-37-B                        $590,125.72             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-38-A                          $47,403.05             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-38-B                          $47,403.05             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-39-A                          $45,559.26             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-39-B                          $45,559.26             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-40-A                          $43,787.05             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-40-B                          $43,787.05             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-41-A                          $42,083.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-41-B                          $42,083.63             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-42-A                         $40,446.36             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-42-B                         $40,446.36             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-43-A                         $38,872.65             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-43-B                         $38,872.65             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-44-A                         $37,360.05              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-44-B                         $37,360.05              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-45-A                         $35,906.19              Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-45-B                         $35,906.19             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-46-A                         $34,508.79             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-46-B                         $34,508.79             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-47-A                         $33,165.67             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-47-B                         $33,165.67             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-48-A                         $31,874.71             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-48-B                         $31,874.71             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-49-A                         $30,633.90             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-49-B                         $30,633.90             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-50-A                         $10,606.02             Variable(2)
----------------------------- ------------------------ --------------------------------
----------------------------- ------------------------ --------------------------------
         LRIIC-50-B                         $10,606.02             Variable(2)
----------------------------- ------------------------ --------------------------------
</TABLE>


(1)   Solely   for   purposes   of   Section    1.860G-1(a)(4)(iii)   of   the   Treasury
     regulations,   the Distribution Date immediately following the maturity date
     for the Group T2   Mortgage   Loan   with the   latest   maturity   date has been
     designated as the "latest possible   maturity date" for each   Uncertificated
     Lower-Tier II Regular Interest.

(2)   Calculated in accordance with the definition of "Uncertificated   Lower-Tier
     II REMIC Pass-Through Rate" herein.

                                      -11-

 

<PAGE>


                              Middle-Tier II REMIC

     As provided herein,   the Securities   Administrator will make an election to
treat the segregated pool of assets consisting of the Uncertificated   Lower-Tier
II   Regular   Interests   as a REMIC for   federal   income tax   purposes,   and such
segregated pool of assets will be designated as the   "Middle-Tier II REMIC." The
Class II-MR   Interest will   represent the sole class of "residual   interests" in
the Middle-Tier REMIC for purposes of the REMIC Provisions.   The following table
irrevocably sets forth the designation,   the Uncertificated Middle-Tier II REMIC
Pass-Through Rate, the initial   Uncertificated   Balance, and solely for purposes
of satisfying   Treasury   Regulations   Section   1.860G-1(a)(4)(iii),   the "latest
possible maturity date" for each of the Middle-Tier   Regular Interests.   None of
the Uncertificated Middle-Tier II Regular Interests will be certificated.

<TABLE>
<CAPTION>

------------------------ ----------------------------- --------------------------------
                             Initial Uncertificated       Uncertificated Middle-Tier II
    Designations(1)                 Balance                  REMIC Pass-Through Rate
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
MRII-AA                                $418,466,543.99             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A1A                                   $800,000.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A1B                                   $961,430.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A2                                    $598,300.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A3                                    $326,760.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A4                                    $545,140.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A5                                    $665,810.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-A6                                      $99,340.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-M1                                     $104,620.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-M2                                      $55,510.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-M3                                      $21,350.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-M4                                      $21,350.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-M5                                      $21,350.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-B1                                      $29,900.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-ZZ                                   $4,289,273.55             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-P                                          $100.00             Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-IOA                              (3)                          Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-IOB                              (3)                          Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
MRII-IOC                              (3)                           Variable(2)
------------------------ ----------------------------- --------------------------------
</TABLE>

(1)   Solely   for   purposes   of   Section    1.860G-1(a)(4)(iii)   of   the   Treasury
     regulations,   the Distribution Date immediately following the maturity date
     for the Group T2   Mortgage   Loan   with the   latest   maturity   date has been
     designated as the "latest possible   maturity date" for each   Uncertificated
     Middle-Tier II Regular Interest.

(2)   Calculated in accordance with the definition of "Uncertificated Middle-Tier
     II REMIC Pass-Through Rate" herein.

(3)   The Class MRII-IOA   Interest,   the Class MRII-IOB   Interest,   and the Class
     MRII-IOC   Interest   will   have    Uncertificated    Balances    calculated   in
     accordance with the definition of "Uncertificated Balance" herein.

     The foregoing   Lower-Tier II REMIC and   Middle-Tier   II REMIC   structure is
intended to cause all the cash from the Group T2 Mortgage   Loans to flow through
the   Upper-Tier   II REMIC as cash flow on an   Upper-Tier   II   Regular   Interest,
without creating any shortfall,   actual or potential (other than for losses), to
any Upper-Tier II Regular Interest. To the extent that the structure is believed

                                       -12-

 
<PAGE>

to diverge from such intention, the party identifying such ambiguity or drafting
error   shall   notify the other   parties   hereto,   and the parties   hereto   shall
attempt to resolve such ambiguity or drafting   error in accordance   with Section
11.01 hereto.

                                      -13-

 

<PAGE>

                               Upper-Tier II REMIC

     As provided herein,   the Securities   Administrator will make an election to
treat the segregated pool of assets consisting of the Uncertificated Middle-Tier
II   Regular   Interests   as a REMIC for   federal   income tax   purposes,   and such
segregated   pool of assets will be designated as the   "Upper-Tier II REMIC." The
Class II-UR   Interest will   represent the sole class of "residual   interests" in
the Upper-Tier II REMIC for purposes of the REMIC Provisions.

     The following table irrevocably sets forth (or describes) the Upper-Tier II
Regular   Interest   designation,   the   Initial   Uncertificated   Balance   and   the
Uncertificated   Upper-Tier   II REMIC   Pass-Through   Rate for each   Upper-Tier II
Regular Interest   comprising the "regular   interests" in the Upper-Tier II REMIC
for purposes of the REMIC   Provisions   and,   solely for   purposes of   satisfying
Treasury Regulations Section 1.860G-1(a)(4)(iii),   the "latest possible maturity
date" for each Upper-Tier II Regular Interest.

<TABLE>
<CAPTION>

------------------------ ----------------------------- --------------------------------
                            Initial Uncertificated       Uncertificated Upper- Tier II
    Designation(1)                  Balance                  REMIC Pass-Through Rate
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
<S>      <C>     <C>     <C>     <C>     <C>     <C>
        T-A-1A                      $80,000,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
        T-A-1B                      $96,143,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-A-2                      $59,830,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-A-3                      $32,676,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-A-4                      $54,514,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-A-5                      $66,581,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-A-6                       $9,934,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-M-1                      $10,462,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-M-2                       $5,551,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-M-3                       $2,135,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-M-4                       $2,135,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-M-5                       $2,135,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
         T-B-1                       $2,990,000.00                 Variable(2)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
          CE                          (3)                              (3)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
           P                               $100.00                     (4)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
       Swap-IOA                       (5)                              (5)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
       Swap-IOB                       (5)                              (5)
------------------------ ----------------------------- --------------------------------
------------------------ ----------------------------- --------------------------------
       Swap-IOC                       (5)                              (5)
------------------------ ----------------------------- --------------------------------
</TABLE>

(1)   Solely   for   purposes   of   Section    1.860G-1(a)(4)(iii)   of   the   Treasury
     regulations,   the Distribution Date immediately following the maturity date
     for the Group T2   Mortgage   Loan   with the   latest   maturity   date has been
     designated as the "latest   possible   maturity date" for each   Upper-Tier II
     Regular Interest.

(2)   Interest   will accrue on these   Upper-Tier   II Regular   Interests   at a per
     annum   rate equal to the lesser of (i) the   related   Pass-Through   Rate and
     (ii) the Upper-Tier II REMIC Net WAC Cap.

     On any   Distribution   Date on which the   Certificate   Interest Rate for the
     Corresponding Class of Certificates exceeds the Upper-Tier II REMIC Net WAC
     Cap, interest accruals based on such excess shall be treated as having been
     paid from Cap Carryover Reserve Account or the Supplemental Interest Trust,
     as applicable.   On any Distribution Date on which the Certificate   Interest
     Rate on a Class of   Certificates   is based on the applicable   Pool Cap, the
     excess of the amount of interest   that would have   accrued on such Class of
     Certificates   if the Upper-Tier II REMIC Net WAC Cap were   substituted   for

                                      -14-

 
<PAGE>

     the applicable Pool Cap over the interest   accruals based on the applicable
     Pool Cap shall be   treated   as having   been   paid by the   related   Class of
     Certificates to the   Supplemental   Interest   Trust,   all pursuant to and as
     further provided in Sections 5.14 and 5.15 herein.

(3)   Solely for REMIC purposes,   the Class CE Upper-Tier II Regular Interest (i)
     will   have   an   initial    Uncertificated    Balance   equal   to   the   Initial
     Overcollateralization    Amount    and   (ii)   will   bear    interest    at   its
     Pass-Through Rate on its Notional Amount.

(4)   The Class P Upper-Tier II Regular Interest will not bear interest.

(5)   Solely for federal   income tax purposes,   the Class Swap IOA   Upper-Tier II
     Regular Interest,   the Class Swap IOB Upper-Tier II Regular   Interest,   and
     the   Class   Swap   IOC    Upper-Tier   II   Regular    Interest   will   not   have
     Uncertificated Balances or Uncertificated   Upper-Tier II REMIC Pass-Through
     Rates, but will be entitled to 100% of the amounts distributed on the Class
     MRII-IOA Middle-Tier II Regular Interest, the Class MRII-IOB Middle-Tier II
     Regular Interest,   and the Class MRII-IOC   Middle-Tier II Regular Interest,
     respectively.

                                      -15-

 
<PAGE>


                             SUMMARY OF CERTIFICATES

     The   following   table   sets   forth   characteristics   of   the   Certificates,
together with the minimum denominations and integral multiples in excess thereof
in which the Classes of Certificates shall be issuable:

<TABLE>
<CAPTION>

                          Initial Class Certificate
                         Balance, Initial Notional           Pass-
                          Amount, Maximum Initial           Through                                  Integral
                         Class Certificate Balance          Rate or                                Multiples in
                        or Maximum Initial Notional       Certificate            Minimum             Excess of
Classes                           Amount                  Interest Rate          Denomination           Minimum
<S>      <C>     <C>     <C>     <C>     <C>     <C>

Class 1-A-R                          $100                    6.1000%                   $100              N/A
Class 1-A-1                   $49,697,800                       (1)                   $1,000              $1
Class 1-A-2                  $111,791,000                    6.0000%                 $1,000              $1
Class 1-A-3                  $106,425,000                    5.7500%                 $1,000              $1
Class 1-A-4                    $4,434,375                    6.0000%             $1,000,000              $1
Class 1-A-5                    $5,366,000                    5.7500%                 $1,000              $1
Class 1-A-6                      $223,583                    6.0000%               $223,583              N/A
Class 1-A-7                   $68,234,000                    5.7500%                 $1,000              $1
Class 1-A-8                    $2,843,083                    6.0000%             $1,000,000              $1
Class 1-A-9                   $24,601,000                    5.7500%                 $1,000              $1
Class 1-A-10                   $1,025,041                    6.0000%             $1,000,000              $1
Class 1-A-11                  $75,649,000                     5.7500%                 $1,000              $1
Class 1-A-12                   $3,152,041                    6.0000%             $1,000,000              $1
Class 1-A-13                  $17,185,000                    5.7500%                 $1,000               $1
Class 1-A-14                     $716,041                    6.0000%               $716,041              N/A
Class 1-A-15                   $9,362,000                    6.0000%                 $1,000              $1
Class 1-A-16                 $110,560,000                       (2)                  $1,000              $1
Class 1-A-17                   $6,555,000                    6.0000%                 $1,000              $1
Class 1-A-18                  $19,440,000                       (2)                  $1,000              $1
Class 1-A-19                 $130,000,000                       (3)              $1,000,000              $1
Class 1-A-20                      $10,000                    6.0000%                 $1,000              $1
Class 1-A-21                      $10,000                    6.0000%                 $1,000              $1
Class 1-A-22                   $3,783,000                    6.0000%                 $1,000              $1
Class 1-A-23                     $100,200                    6.0000%                  $1,000              $1
Class 1-A-24                 $111,791,000                    5.7500%                 $1,000              $1
Class 1-A-25                    4,657,958                    6.0000%             $1,000,000              $1
Class 1-A-26                  $106,425,000                    6.0000%                 $1,000              $1
Class 1-A-27                   $5,366,000                    6.0000%                 $1,000              $1
Class 1-A-28                  $49,697,800                        (4)              $1,000,000              $1
Class 1-A-29                  $11,921,000                    6.0000%                 $1,000              $1
Class 1-A-30                  $68,234,000                    6.0000%                 $1,000              $1
Class 1-A-31                   $24,601,000                    6.0000%                 $1,000              $1
Class 1-A-32                  $75,649,000                    6.0000%                 $1,000              $1
</TABLE>

                                      -16-

 
<PAGE>
<TABLE>
<CAPTION>

                         Initial Class Certificate
                         Balance, Initial Notional           Pass-
                          Amount, Maximum Initial           Through                                  Integral
                          Class Certificate Balance          Rate or                                Multiples in
                        or Maximum Initial Notional       Certificate            Minimum             Excess of
Classes                           Amount                   Interest Rate         Denomination           Minimum
<S>      <C>     <C>     <C>     <C>     <C>     <C>

Class 1-A-33                  $17,185,000                     6.0000%               $1,000                $1
Class 1-A-34                  $92,835,000                      5.7500%               $1,000                $1
Class 1-A-35                   $3,868,124                     6.0000%           $1,000,000                $1
Class 1-A-36                  $92,835,000                     6.0000%               $1,000                 $1
Class 1-A-37                  $92,834,000                     5.7500%               $1,000                $1
Class 1-A-38                   $3,868,082                     6.0000%           $1,000,000                $1
Class 1-A-39                  $92,834,000                     6.0000%               $1,000                $1
Class 1-A-40                 $185,669,000                     5.7500%               $1,000                $1
Class 1-A-41                   $7,736,206                     6.0000%           $1,000,000                $1
Class 1-A-42                 $185,669,000                     6.0000%               $1,000                $1
Class 2-A-1                   $41,198,000                        (5)                $1,000                $1
Class 30-IO                    $21,847,716                     6.0000%           $1,000,000                $1
Class 30-PO                    $3,755,105                        (6)               $25,000                $1
Class M-1                      $9,679,000                        (7)               $25,000                $1
Class B-1                      $4,839,000                        (7)               $25,000                $1
Class B-2                      $4,269,000                        (7)               $25,000                $1
Class B-3                      $3,131,000                        (7)               $25,000                $1
Class B-4                      $2,277,000                        (7)               $25,000                $1
Class B-5                      $1,708,000                         (7)               $25,000                $1
Class B-6                      $1,423,326                        (7)               $25,000                $1
Class T-A-1A                  $80,000,000                        (8)                $1,000                 $1
Class T-A-1B                  $96,143,000                     5.8058%(9)            $1,000                $1
Class T-A-2                   $59,830,000                        (8)                $1,000                $1
Class T-A-3                   $32,676,000                        (8)                $1,000                $1
Class T-A-4                   $54,514,000                        (8)                $1,000                $1
Class T-A-5                   $66,581,000                     5.9644%(10)           $1,000                $1
Class T-A-6                    $9,934,000                     5.9713%(10)           $1,000                $1
Class T-M-1                   $10,462,000                     6.1643%(10)          $25,000                $1
Class T-M-2                     $5,551,000                        (8)               $25,000                $1
Class T-M-3                    $2,135,000                        (8)               $25,000                $1
Class T-M-4                    $2,135,000                        (8)                $25,000                $1
Class T-M-5                    $2,135,000                        (8)               $25,000                $1
Class T-B-1                    $2,990,000                     6.5400%(10)          $25,000                $1
Class CE                               (11)                       (11)                  N/A                N/A
Class P                              $100                        (12)                 $100                N/A
</TABLE>                                                                       

(1)   During the initial   Interest   Accrual   Period,   interest will accrue on the
     Class   1-A-1   Certificates   at the rate of 5.6200%   per annum.   During each
     Interest Accrual Period thereafter, interest will accrue on the Class 1-A-1
     Certificates   at a per annum rate equal to (i) 0.3000% plus (ii)   One-Month
     LIBOR, subject to a minimum rate of 0.3000% and a maximum rate of 7.0000%.

                                      -17-

 
<PAGE>

(2)   During the initial   Interest   Accrual   Period,   interest will accrue on the
     Class   1-A-16 and Class   1-A-18   Certificates   at the rate of   5.9200%   per
     annum. During each Interest Accrual Period thereafter, interest will accrue
     on the Class 1-A-16 and Class 1-A-18 Certificates at a per annum rate equal
     to (i) 0.6000%   plus (ii)   One-Month   LIBOR,   subject to a minimum   rate of
     0.6000% and a maximum rate of 6.0000%.

(3)   During the initial   Interest   Accrual   Period,   interest will accrue on the
     Class   1-A-19   Certificates   at the rate of 0.0800% per annum.   During each
     Interest   Accrual   Period   thereafter,   interest   will   accrue on the Class
     1-A-19   Certificates   at a per annum rate equal to (i)   5.4000%   minus (ii)
     One-Month LIBOR, subject to a minimum rate of 0.0000% and a maximum rate of
     5.4000%.

(4)   During the initial   Interest   Accrual   Period,   interest will accrue on the
     Class   1-A-28   Certificates   at the rate of 1.3800% per annum.   During each
     Interest   Accrual   Period   thereafter,   interest   will   accrue on the Class
     1-A-28   Certificates   at a per annum rate equal to (i)   6.7000%   minus (ii)
     One-Month LIBOR, subject to a minimum rate of 0.0000% and a maximum rate of
     6.7000%.

(5)   During each   Interest   Accrual   Period,   interest   will accrue on the Class
     2-A-1   Certificates at a per annum rate equal to the Net WAC of the Group 2
     Mortgage Loans.

(6)   The Class 30-PO   Certificates are Principal Only   Certificates and will not
     be entitled to distributions in respect of interest.

(7)   Interest will accrue on these   Certificates for each Distribution Date at a
     per   annum   rate   equal   to   the   weighted   average   (based   on   the   Group
     Subordinate   Amount   for each   Shifting   Interest   Loan   Group) of (i) with
     respect to Loan Group 1, 6.100% and (ii) with   respect to Loan Group 2, the
     Net WAC for the Group 2 Mortgage Loans.

(8)   The Certificate   Interest Rate for these   Certificates   will be a per annum
     rate equal to the lesser of (i) the sum of Certificate One-Month LIBOR plus
     the applicable   Certificate Margin (the   "Pass-Through   Rate") and (ii) the
     Pool Cap.

(9)   The Certificate   Interest Rate for these   Certificates   will be a per annum
     rate equal to the lesser of (i) the fixed   interest rate   specified in this
     table (the "Pass-Through Rate") and (ii) the Pool Cap.

(10) The Certificate   Interest Rate for these   Certificates   will be a per annum
     rate equal to the lesser of (i) the fixed   interest rate   specified in this
     table (the   "Pass-Through   Rate") and (ii) the Pool Cap.   The   Pass-Through
     Rate for these   Certificates will increase by 0.50% per annum following the
     Group T2 Optional Termination Date.

(11) Solely for federal income tax purposes,   the Class CE Certificates will (i)
     have   an   initial    Class    Certificate    Balance    equal   to   the   Initial
     Overcollateralization   Amount   and (ii) be   entitled   to 100% of the amount
     distributed on the Class CE Upper-Tier II Regular Interest.

(12) The Class P Certificates will not bear interest.

                                      -18-

 

<PAGE>


                                   ARTICLE I

                                   DEFINITIONS

     Section 1.01 Defined Terms.

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

     10-K Filing Deadline: As defined in Section 3.22(c).

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

     60+ Day Delinquent Loan: For each Distribution Date, each Group T2 Mortgage
Loan   (including   each Group T2 Mortgage Loan in   foreclosure   and each Group T2
Mortgage Loan for which the Mortgagor has filed for bankruptcy after the Closing
Date) with   respect to which any portion of a Monthly   Payment is, as of the Due
Date in the prior calendar month,   two months or more past due and each Group T2
Mortgage Loan relating to an REO Property.

     Accretion   Termination   Date:   For (i) the Class 1-A-20   Certificates,   the
earlier to occur of (1) the Distribution Date following the Distribution Date on
which the   aggregate   Class   Certificate   Balance of the Class   1-A-16 and Class
1-A-18   Certificates   has been reduced to zero and (2) the Senior Credit Support
Depletion Date and (ii) the Class 1-A-21   Certificates,   the earlier to occur of
(1) the Distribution Date following the Distribution Date on which the aggregate
Class   Certificate   Balance of the Class   1-A-16,   Class 1-A-18 and Class 1-A-20
Certificates   has   been   reduced   to   zero   and (2) the   Senior   Credit   Support
Depletion Date.

     Additional Disclosure Notification: The form of notification to be included
with any Additional   Form 10-D   Disclosure,   Additional   Form 10-K Disclosure or
Form 8-K Disclosure Information which is attached hereto as Exhibit S.

     Additional    Form   10-D    Disclosure:    As   defined   in   Section    3.22(b).

     Additional    Form   10-K    Disclosure:    As   defined   in   Section    3.22(c).

     Additional Servicer: A Subcontractor   engaged by the Master Servicer or the
Securities Administrator that is a "servicer" within the meaning of Item 1101 of
Regulation AB and meets any of the criteria in Item 1108(a)(2)(i)   through (iii)
of Regulation AB.

     Adjusted   Pool   Amount:   With   respect   to any   Distribution   Date and each
Shifting   Interest Loan Group,   the Cut-off Date Pool   Principal   Balance of the
Mortgage   Loans in such   Shifting   Interest   Loan Group minus the sum of (i) all
amounts in respect of   principal   received in respect of the   Mortgage   Loans in
such   Shifting   Interest   Loan Group   (including,   without   limitation,   amounts
received   as   Monthly   Payments,    Periodic   Advances,    Principal   Prepayments,
Liquidation   Proceeds and   Substitution   Adjustment   Amounts) and distributed to
Holders of the related Shifting Interest   Certificates on such Distribution Date
and all prior   Distribution Dates and (ii) the principal portion of all Realized
Losses (other than Debt Service   Reductions)   incurred on the Mortgage   Loans in

                                      -19-

 
<PAGE>

such   Shifting   Interest Loan Group from the Cut-off Date through the end of the
month preceding such Distribution Date.

      Adjusted Pool Amount   (Non-PO   Portion):   With respect to any   Distribution
Date and each Shifting Interest Loan Group, the difference   between the Adjusted
Pool Amount for such   Shifting   Interest Loan Group and the Adjusted Pool Amount
(PO Portion) for such Shifting Interest Loan Group.

     Adjusted Pool Amount (PO Portion):   With respect to any   Distribution   Date
and each   Shifting   Interest   Loan Group,   the sum of the amount,   calculated as
follows,   with   respect   to each   Outstanding   Mortgage   Loan   in such   Shifting
Interest Loan Group: the product of (i) the PO Percentage for such Mortgage Loan
and (ii)   the   remainder   of (A) the   Cut-off   Date   Principal   Balance   of such
Mortgage   Loan minus (B) the sum of (x) all   amounts   in   respect   of   principal
received   in respect   of such   Mortgage   Loan   (including,   without   limitation,
amounts received as Monthly Payments, Periodic Advances,   Principal Prepayments,
Liquidation   Proceeds and   Substitution   Adjustment   Amounts) and distributed to
Holders of the related Shifting Interest   Certificates on such Distribution Date
and all prior   Distribution   Dates and (y) the principal portion of any Realized
Loss (other than a Debt Service   Reduction)   incurred on such Mortgage Loan from
the Cut-off Date through the end of the month preceding such Distribution Date.

     Advance: A Periodic Advance or a Servicing Advance.

     Administrative   Fee Rate:   With respect to each   Mortgage   Loan,   an amount
equal to the sum of the related   Servicing Fee Rate and the related LPMI Premium
Rate, if any.

     Administrative   Fees:   With   respect to any Loan Group,   the sum of (a) the
related   Servicing   Fee and (b) with respect to any Mortgage   Loan covered by an
LPMI Policy, a fee based on the LPMI Premium Rate.

     Aggregate Denomination:   As to any Class of Exchangeable REMIC Certificates
or Exchangeable Certificates and any date of determination, the aggregate of the
Denominations of the Outstanding Certificates of such Class on such date.

     Aggregate   Subordinate   Percentage:   With respect to any Distribution Date,
the   percentage,   carried to six places rounded up, obtained by dividing (i) the
aggregate   Class   Certificate   Balance of the Class M-1 and Class B Certificates
immediately prior to such Distribution Date by (ii) the aggregate Pool Principal
Balance (Non-PO Portion) of both Shifting Interest Loan Groups.

     Agreement:    This   Pooling   and   Servicing    Agreement   together   with   all
amendments hereof and supplements hereto.

     Applied Realized Loss Amount:   Any of a Senior Applied Realized Loss Amount
or a Subordinated Applied Realized Loss Amount.

     Appraised   Value:   With respect to any Mortgaged   Property,   either (i) the
lesser of (a) the appraised   value   determined   in an appraisal   obtained by the
originator   generally no more than four months prior to   origination   (or,   with
respect to newly   constructed   properties,   no more than twelve   months prior to

                                      -20-

 
<PAGE>

origination) of such Mortgage Loan or, in certain cases, an automated   valuation
model (if   applicable)   or tax   assessed   value and (b) the sales price for such
property,   except that, in the case of Mortgage Loans the proceeds of which were
used to refinance an existing   mortgage loan, the Appraised Value of the related
Mortgaged   Property is the appraised   value   thereof   determined in an appraisal
obtained at the time of refinancing or, in certain cases, an automated valuation
model   (if   applicable)   or tax   assessed   value,   or (ii) the   appraised   value
determined   in an   appraisal   made at the request of a Mortgagor   subsequent   to
origination in order to eliminate the   Mortgagor's   obligation to keep a Primary
Mortgage Insurance Policy in force.

     Assessment of Compliance: As defined in Section 3.21(a).

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

     Attestation Report: As defined in Section 3.21(b).

     Authenticating Agents: As defined in Section 9.10.

     Back-up Certification: As defined in Section 3.22(e).

     BAFC: Banc of America Funding Corporation.

     BAMCC: Banc of America Mortgage Capital Corporation.

     BANA:   Bank   of   America,    National    Association,    a   national    banking
association, or its successor in interest.

     BANA Servicing Agreement: The Servicing Agreement, dated February 27, 2007,
by and between BAFC, as depositor, and BANA, as servicer.

     BBA: As defined in Section 5.10.

     Book-Entry Certificate: All Classes of Certificates other than the Physical
Certificates.

     BPP Mortgage Loan: Any Mortgage Loan which includes a Borrowers   Protection
Plan(R)   addendum to the related Mortgage Note whereby BANA agrees to cancel (i)
certain   payments of   principal   and   interest on such   Mortgage   Loan for up to
twelve months upon the disability or involuntary   unemployment   of the Mortgagor
or (ii)   the   outstanding   principal   balance   of the   Mortgage   Loan   upon   the
accidental   death of the   Mortgagor;   provided   that such   Borrowers   Protection
Plan(R) has not been terminated in accordance with its terms.

     BPP Mortgage   Loan   Payment:   With respect to any BPP   Mortgage   Loan,   the
Monthly Covered Amount or Total Covered Amount, if any, payable by BANA pursuant
to Section 7(b) of the Mortgage Loan Purchase Agreement.

     Business   Day:   Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking   institutions in the State of North Carolina,   the State of New
York, the states in which the servicing offices of any Servicer are located, the

                                       -21-

 
<PAGE>

state or states in which the master servicing offices of the Master Servicer are
located   or the   state or states in which the   Corporate   Trust   Offices   of the
Trustee and the Securities   Administrator are located are required or authorized
by law or executive order to be closed.

     Buy-Down   Account:   The separate   Eligible   Account or Accounts created and
maintained by a Servicer as set forth in Section 3.08.

     Buy-Down   Agreement:   An agreement   governing the   application   of Buy-Down
Funds with respect to a Buy-Down Mortgage Loan.

     Buy-Down   Funds:   Money advanced by a builder,   seller or other   interested
party to reduce a   Mortgagor's   monthly   payment   during the initial   years of a
Buy-Down Mortgage Loan.

     Buy-Down Mortgage Loan: Any Mortgage Loan in respect of which,   pursuant to
a   Buy-Down   Agreement,   the   monthly   interest   payments   made   by the   related
Mortgagor   will be less than the   scheduled   monthly   interest   payments on such
Mortgage Loan, with the resulting difference in interest payments being provided
from related Buy-Down Funds.

     Calculated   Principal   Distribution:   As defined   in Section   5.04(b)(iii).

     Calculation   Balance:   With   respect   to each class of   Exchangeable   REMIC
Certificates   and   as   of   any   date   of   determination,   an   amount   equal   the
then-current   Class Certificate   Balance of such Exchangeable REMIC Certificates
if such Class   Certificate   Balance had been calculated under the condition that
no   Exchangeable   REMIC   Certificates   of such   Class   are   ever   exchanged   for
Exchangeable Certificates.

     Cap Carryover Amount: If on any Distribution   Date, the   Overcollateralized
Accrued Certificate Interest for any Offered   Overcollateralized   Certificate or
the Class   T-B-1   Certificates   is based on the Pool Cap,   the excess of (i) the
amount of   interest   such   Class   would   have been   entitled   to receive on such
Distribution   Date based on its Pass-Through Rate without regard to the Pool Cap
over (ii) the amount of interest such Class received on such   Distribution   Date
based on the Pool 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 on such Class   without   regard to the Pool Cap).   For federal
income tax purposes, each application of the Pool Cap shall be an application of
the   Upper-Tier   II   REMIC   Net WAC   Cap for   purposes   of   calculating   the Cap
Carryover Amount.

     Cap Carryover Reserve Account:   The Eligible Account created and maintained
by the Securities   Administrator   pursuant to Section 3.09(i) in the name of the
Securities   Administrator,   on behalf of the   Trustee,   for the   benefit   of the
Holders   of the   Offered   Overcollateralized   Certificates   and the Class   T-B-1
Certificates and designated "Wells Fargo Bank, N.A., as Securities Administrator
for U.S. Bank National Association,   as Trustee, in trust for registered holders
of Banc of   America   Funding   Corporation   Mortgage   Pass-Through   Certificates,
Series   2007-2."   Funds in the Cap   Carryover   Reserve   Account shall be held in

                                      -22-

 
<PAGE>

trust for the Holders of the   Offered   Overcollateralized   Certificates   and the
Class T-B-1   Certificates for the uses and purposes set forth in this Agreement.
Funds in the Cap Carryover   Reserve   Account shall be held   uninvested.   The Cap
Carryover   Reserve   Account shall not be an asset of any REMIC formed under this
Agreement.

     Cap Provider: Bank of America, National Association.

     Certificate:   Any of the   Banc   of   America   Funding   Corporation   Mortgage
Pass-Through   Certificates,   Series   2007-2   that are   issued   pursuant   to this
Agreement.

     Certificate   Account:   The Eligible   Account   created and maintained by the
Securities   Administrator   pursuant   to   Section   3.09(b)   in   the   name   of the
Securities   Administrator,   on behalf of the   Trustee,   for the   benefit   of the
Certificateholders   and   designated   "Wells   Fargo   Bank,   N.A.,   as   Securities
Administrator   for U.S.   Bank   National   Association,   as Trustee,   in trust for
registered holders of Banc of America Funding Corporation Mortgage   Pass-Through
Certificates, Series 2007-2." The Certificate Account shall be deemed to consist
of ten   sub-accounts;   one for   each   of the   Loan   Groups   (the   "Loan   Group 1
Sub-Account,"    the   "Loan   Group   2    Sub-Account"    and   the   "Loan   Group   T2
Sub-Account"),   and one for each of the Exchangeable   Certificates Grantor Trust
Account,   the   Lower-Tier   II   Certificate    Sub-Account,    the   Middle-Tier   II
Certificate Sub-Account, the Upper-Tier II Certificate Sub-Account, the Shifting
Interest Lower-Tier Certificate   Sub-Account,   the Shifting Interest Middle-Tier
Certificate    Sub-Account   and   the   Shifting   Interest   Upper-Tier   Certificate
Sub-Account.   Funds in the   Certificate   Account   shall be held in trust for the
Holders   of the   Certificates   for the   uses   and   purposes   set   forth   in this
Agreement.

     Certificate   Balance:   With respect to any   Certificate   at any date (other
than a Class CE   Certificate),   the maximum   dollar amount of principal to which
the Holder   thereof is then entitled   hereunder,   such amount being equal to the
product of the Percentage Interest of such Certificate and the Class Certificate
Balance of the Class of Certificates of which such Certificate is a part.

     Certificate   Custodian:   Initially,   Wells Fargo Bank, N.A.; thereafter any
other   Certificate   Custodian   acceptable to the   Depository and selected by the
Securities Administrator.

     Certificate    Interest   Rate:    With   respect   to   each   Class   of   Offered
Overcollateralized   Certificates and the Class T-B-1 Certificates, the per annum
rate set   forth or   calculated   in the   table   under   the   caption   "Summary   of
Certificates" in the Preliminary Statement.

     Certificate   Margin:   With   respect   to each   class   of   Overcollateralized
Certificates that are LIBOR Certificates, the following percentages:
<TABLE>
<CAPTION>

                                                      On or Prior to Group                   After the
                                                    T2 Optional Termination              Group T2 Optional
                                                               Date                       Termination Date
<S>      <C>     <C>     <C>     <C>     <C>     <C>

         Class T-A-1A Certificates                            0.060%                           0.060%
         Class T-A-2 Certificates                             0.130%                           0.130%
         Class T-A-3 Certificates                             0.160%                           0.320%
         Class T-A-4 Certificates                             0.400%                            0.800%
         Class M-2 Certificates                               0.550%                           0.825%
</TABLE>

                                      -23-

 
<PAGE>
<TABLE>
<CAPTION>

                                                       On or Prior to Group                   After the
                                                    T2 Optional Termination              Group T2 Optional
                                                              Date                       Termination Date
<S>      <C>     <C>     <C>     <C>     <C>     <C>

         Class M-3 Certificates                               0.850%                           1.275%
         Class M-4 Certificates                               1.050%                           1.575%
          Class M-5 Certificates                               1.200%                           1.800%
</TABLE>

     Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the   beneficial   owner   of a   Book-Entry   Certificate.   With   respect   to any
Definitive Certificate, the Certificateholder of such Certificate.

     Certificate   Register:   The register   maintained   pursuant to Section 6.02.

     Certificate   Registrar:   The registrar   appointed pursuant to Section 6.02.

     Certificateholder:   The Person in whose name a Certificate is registered in
the   Certificate   Register,   except   that,   solely for the purpose of giving any
consent   pursuant to this Agreement,   any Certificate   registered in the name of
the Depositor,   the Master Servicer or any affiliate thereof shall be deemed not
to be   outstanding   and the   Percentage   Interest   and Voting   Rights   evidenced
thereby   shall not be taken into account in   determining   whether the   requisite
amount of Percentage   Interests or Voting Rights,   as the case may be, necessary
to   effect   any such   consent   has been   obtained,   unless   such   entity   is the
registered owner of the entire Class of Certificates,   provided that neither the
Securities   Administrator   nor the Trustee shall be responsible for knowing that
any   Certificate   is   registered in the name of an affiliate of the Depositor or
the Master Servicer unless one of its Responsible   Officers has actual knowledge
thereof.

     Certification Parties: As defined in Section 3.22(e).

     Certifying Person: As defined in Section 3.22(e).

     Class: As to the Certificates,   the Class 1-A-R,   Class 1-A-1, Class 1-A-2,
Class 1-A-3,   Class 1-A-4,   Class 1-A-5,   Class 1-A-6, Class 1-A-7, Class 1 A-8,
Class 1-A-9,   Class 1-A-10,   Class 1-A-11,   Class   1-A-12,   Class 1-A-13,   Class
1-A-14,   Class 1 A-15, Class 1-A-16,   Class 1-A-17,   Class 1-A-18, Class 1-A-19,
Class 1-A-20,   Class 1-A-21,   Class 1-A-22,   Class 1-A-23,   Class 1-A-24,   Class
1-A-25,   Class 1-A-26,   Class 1-A-27,   Class 1-A-28, Class 1-A-29, Class 1-A-30,
Class 1-A-31,   Class 1-A-32,   Class 1-A-33,   Class 1-A-34,   Class 1-A-35,   Class
1-A-36,   Class 1-A-37,   Class 1-A-38,   Class 1-A-39, Class 1-A-40, Class 1-A-41,
Class 1-A-42, Class 2-A-1, Class 30-IO, Class 30-PO, Class M-1, Class B-1, Class
B-2, Class B-3,   Class B-4,   Class B-5,   Class B-6, Class T-A-1A,   Class T-A-1B,
Class T-A-2,   Class T-A-3,   Class T-A-4,   Class T-A-5, Class T-A-6, Class T-M-1,
Class T-M-2,   Class T-M-3,   Class T-M-4,   Class T-M-5, Class T-B-1, Class CE and
Class P Certificates, as the case may be.

     Class 1-A-3 Loss Amount:   With respect to any   Distribution   Date after the
Senior Credit Support   Depletion   Date,   the amount,   if any, by which the Class
Certificate Balance of the Class 1-A-3 Certificates would be reduced as a result
of the allocation of any reduction pursuant to Section 5.04(b)(i) to such Class,
without regard to the operation of Section 5.04(b)(iv).

                                      -24-

 
<PAGE>

     Class 1-A-4 Notional   Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i)   4.1666666667% of the Calculation   Balance of the
Class 1-A-3 Certificates and (ii) a fraction,   (a) the numerator of which is the
Aggregate   Denomination of all Outstanding Class 1-A-4   Certificates and (b) the
denominator of which is the Maximum   Initial   Notional Amount of the Class 1-A-4
Certificates.

     Class 1-A-5 Loss Allocation   Amount:   With respect to any Distribution Date
after the Senior   Credit   Support   Depletion   Date,   the lesser of (a) the Class
Certificate   Balance   of the   Class   1-A-5   Certificates   with   respect   to such
Distribution   Date prior to any   reduction   for the Class 1-A-5 Loss   Allocation
Amount and (b) the Class   1-A-3 Loss Amount   with   respect to such   Distribution
Date.

     Class 1-A-6 Notional   Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i)   4.1666604547% of the Calculation   Balance of the
Class 1-A-5 Certificates and (ii) a fraction,   (a) the numerator of which is the
Aggregate   Denomination of all Outstanding Class 1-A-6   Certificates and (b) the
denominator of which is the Maximum   Initial   Notional Amount of the Class 1-A-6
Certificates.

     Class 1-A-7 Loss Amount:   With respect to any   Distribution   Date after the
Senior Credit Support   Depletion   Date,   the amount,   if any, by which the Class
Certificate Balance of the Class 1-A-7 Certificates would be reduced as a result
of the allocation of any reduction pursuant to Section 5.04(b)(i) to such Class,
without regard to the operation of Section 5.04(b)(iv).

         Class 1-A-8 Notional Amount: With respect to each Distribution Date, an
amount equal to product of (i) 4.1666661782% of the Calculation Balance of the
Class 1-A-7 Certificates and (ii) a fraction, (a) the numerator of which is the
Aggregate Denomination of all Outstanding Class 1-A-8 Certificates and (b) the
denominator of which is the Maximum Initial Notional Amount of the Class 1-A-8
Certificates.

         Class 1-A-9 Loss Amount: With respect to any Distribution Date after
the Senior Credit Support Depletion Date, the amount, if any, by which the Class
Certificate Balance of the Class 1-A-9 Certificates would be reduced as a result
of the allocation of any reduction pursuant to Section 5.04(b)(i) to such Class,
without regard to the operation of Section 5.04(b)(iv).

         Class 1-A-10 Notional Amount: With respect to each Distribution Date,
an amount equal to product of (i) 4.1666639567% of the Calculation Balance of
the Class 1-A-9 Certificates and (ii) a fraction, (a) the numerator of which is
the Aggregate Denomination of all Outstanding Class 1-A-10 Certificates and (b)
the denominator of which is the Maximum Initial Notional Amount of the Class
1-A-10 Certificates.

         Class 1-A-11 Loss Amount: With respect to any Distribution Date after
the Senior Credit Support Depletion Date, the amount, if any, by which the Class
Certificate Balance of the Class 1-A-11 Certificates would be reduced as a
result of the allocation of any reduction pursuant to Section 5.04(b)(i) to such
Class, without regard to the operation of Section 5.04(b)(iv).

                                      -25-

 
<PAGE>

     Class 1-A-12 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i)   4.1666657854% of the Calculation   Balance of the
Class 1-A-11 Certificates and (ii) a fraction, (a) the numerator of which is the
Aggregate   Denomination of all Outstanding Class 1-A-12 Certificates and (b) the
denominator of which is the Maximum Initial   Notional Amount of the Class 1-A-12
Certificates.

     Class 1-A-13 Loss Amount:   With respect to any Distribution   Date after the
Senior Credit Support   Depletion   Date,   the amount,   if any, by which the Class
Certificate   Balance   of the Class   1-A-13   Certificates   would be   reduced as a
result of the allocation of any reduction pursuant to Section 5.04(b)(i) to such
Class, without regard to the operation of Section 5.04(b)(iv).

     Class 1-A-14 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i)   4.1666627873% of the Calculation   Balance of the
Class 1-A-13 Certificates and (ii) a fraction, (a) the numerator of which is the
Aggregate   Denomination of all Outstanding Class 1-A-14 Certificates and (b) the
denominator of which is the Maximum Initial   Notional Amount of the Class 1-A-14
Certificates.

     Class 1-A-15 Loss Allocation Amount:   With respect to any Distribution Date
after the Senior   Credit   Support   Depletion   Date,   the lesser of (a) the Class
Certificate   Balance   of the Class   1-A-15   Certificates   with   respect   to such
Distribution   Date prior to any reduction   for the Class 1-A-15 Loss   Allocation
Amount and (b) the sum of the Class   1-A-7   Loss   Amount,   the Class   1-A-9 Loss
Amount,   the Class   1-A-11   Loss   Amount and the Class   1-A-13   Loss Amount with
respect to such Distribution Date.

     Class 1-A-16   Interest Rate Cap Agreement:   The interest rate cap agreement
between   the   Securities   Administrator,   on   behalf of the   Trust,   and the Cap
Provider,   which   will be for the   benefit   of the   Class   1-A-16   Certificates,
substantially   in the form   attached   hereto as Exhibit   T-1.   The Class   1-A-16
Interest Rate Cap Agreement shall not be an asset of any REMIC formed under this
Agreement.

     Class 1-A-16 Loss Amount:   With respect to any Distribution   Date after the
Senior Credit Support   Depletion   Date,   the amount,   if any, by which the Class
Certificate   Balance   of the Class   1-A-16   Certificates   would be   reduced as a
result of the allocation of any reduction pursuant to Section 5.04(b)(i) to such
Class, without regard to the operation of Section 5.04(b)(iv).

     Class 1-A-16 Reserve Fund: The Eligible   Account   created and maintained by
the   Securities   Administrator   pursuant   to Section   3.09(j) in the name of the
Securities   Administrator,   on behalf of the   Trustee,   for the   benefit   of the
Holders of the Class 1-A-16   Certificates   and designated   "Class 1-A-16 Reserve
Fund, Wells Fargo Bank, N.A., as Securities Administrator for U.S. Bank National
Association,   as   Trustee,   in trust for   registered   holders of Banc of America
Funding Corporation Mortgage Pass-Through Certificates,   Series 2007-2." Amounts
on deposit in the Class 1-A-16   Reserve   Fund shall not be   invested.   The Class
1-A-16   Reserve   Fund   shall   not be an asset of any   REMIC   formed   under   this
Agreement.

                                      -26-

 
<PAGE>

     Class 1-A-17 Loss Allocation Amount:   With respect to any Distribution Date
after the Senior   Credit   Support   Depletion   Date,   the lesser of (a) the Class
Certificate   Balance   of the Class   1-A-17   Certificates   with   respect   to such
Distribution   Date prior to any reduction   for the Class 1-A-17 Loss   Allocation
Amount and (b) the sum of the Class 1-A-16 Loss Amount and the Class 1-A-18 Loss
Amount with respect to such Distribution Date.

     Class 1-A-18   Interest Rate Cap Agreement:   The interest rate cap agreement
between   the   Securities   Administrator,   on   behalf of the   Trust,   and the Cap
Provider,   which   will be for the   benefit   of the   Class   1-A-18   Certificates,
substantially   in the form   attached   hereto as Exhibit   T-2.   The Class   1-A-18
Interest Rate Cap Agreement shall not be an asset of any REMIC formed under this
Agreement.

     Class 1-A-18 Loss Amount:   With respect to any Distribution   Date after the
Senior Credit Support   Depletion   Date,   the amount,   if any, by which the Class
Certificate   Balance   of the Class   1-A-18   Certificates   would be   reduced as a
result of the allocation of any reduction pursuant to Section 5.04(b)(i) to such
Class, without regard to the operation of Section 5.04(b)(iv).

     Class 1-A-18 Reserve Fund: The Eligible   Account   created and maintained by
the   Securities   Administrator   pursuant   to Section   3.09(j) in the name of the
Securities   Administrator,   on behalf of the   Trustee,   for the   benefit   of the
Holders of the Class 1-A-18   Certificates   and designated   "Class 1-A-18 Reserve
Fund, Wells Fargo Bank, N.A., as Securities Administrator for U.S. Bank National
Association,   as   Trustee,   in trust for   registered   holders of Banc of America
Funding Corporation Mortgage Pass-Through Certificates,   Series 2007-2." Amounts
on deposit in the Class 1-A-18   Reserve   Fund shall not be   invested.   The Class
1-A-18   Reserve   Fund   shall   not be an asset of any   REMIC   formed   under   this
Agreement.

     Class 1-A-19 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to the aggregate Class Certificate   Balance of the Class 1-A-16 and
Class 1-A-18 Certificates.

     Class 1-A-20 Accrual Distribution Amount: For any Distribution Date and the
Class 1-A-20   Certificates   prior to the related Accretion   Termination Date, an
amount with   respect to such Class equal to the sum of (i) the amount   allocated
but not currently   distributable   as interest to such Class   pursuant to Section
5.02(a)(i)   that is   attributable   to clause (i) of the   definition of "Interest
Distribution    Amount,"   and   (ii)   the   amount    allocated   but   not   currently
distributable   as interest to such Class pursuant to Section   5.02(a)(i) that is
attributable to clause (ii) of the definition of "Interest Distribution Amount."

     Class 1-A-21 Accrual Distribution Amount: For any Distribution Date and the
Class 1-A-21   Certificates   prior to the related Accretion   Termination Date, an
amount with   respect to such Class equal to the sum of (i) the amount   allocated
but not currently   distributable   as interest to such Class   pursuant to Section
5.02(a)(i)   that is   attributable   to clause (i) of the   definition of "Interest
Distribution    Amount,"   and   (ii)   the   amount    allocated   but   not   currently
distributable   as interest to such Class pursuant to Section   5.02(a)(i) that is
attributable to clause (ii) of the definition of "Interest Distribution Amount."

                                      -27-

 
<PAGE>

     Class 1-A-25 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i) the sum of (a)   4.1666666667%   of the Calculation
Balance of the Class 1-A-3 Certificates and (b) 4.1666604547% of the Calculation
Balance of the Class 1-A-5   Certificates and (ii) a fraction,   (a) the numerator
of   which   is   the   Aggregate   Denomination   of   all   Outstanding   Class   1-A-25
Certificates   and (b) the denominator of which is the Maximum   Initial   Notional
Amount of the Class 1-A-25 Certificates.

     Class 1-A-28 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to the Class Certificate Balance of the Class 1-A-1 Certificates.

     Class 1-A-35 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i) the sum of (a)   4.1666661782%   of the Calculation
Balance of the Class 1-A-7 Certificates and (b) 4.1666639567% of the Calculation
Balance of the Class 1-A-9   Certificates and (ii) a fraction,   (a) the numerator
of   which   is   the   Aggregate   Denomination   of   all   Outstanding   Class   1-A-35
Certificates   and (b) the denominator of which is the Maximum   Initial   Notional
Amount of the Class 1-A-35 Certificates.

     Class 1-A-38 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i) the sum of (a)   4.1666657854%   of the Calculation
Balance   of   the   Class   1-A-11    Certificates   and   (b)   4.1666627873%   of   the
Calculation   Balance of the Class 1-A-13   Certificates and (ii) a fraction,   (a)
the numerator of which is the Aggregate   Denomination of all   Outstanding   Class
1-A-38   Certificates   and (b) the   denominator   of which is the Maximum   Initial
Notional Amount of the Class 1-A-38 Certificates.

     Class 1-A-41 Notional Amount:   With respect to each   Distribution   Date, an
amount equal to product of (i) the sum of (a)   4.1666661782%   of the Calculation
Balance of the Class 1-A-7   Certificates,   (b)   4.1666639567% of the Calculation
Balance of the Class 1-A-9   Certificates,   (c)   4.1666657854% of the Calculation
Balance   of   the   Class   1-A-11    Certificates   and   (d)   4.1666627873%   of   the
Calculation   Balance of the Class 1-A-13   Certificates (ii) a fraction,   (a) the
numerator of which is the Aggregate Denomination of all Outstanding Class 1-A-41
Certificates   and (b) the denominator of which is the Maximum   Initial   Notional
Amount of the Class 1-A-41 Certificates.

     Class 1-A-R Certificate: The Class 1-A-R Certificate,   which represents the
ownership of the Class II-UR Interest, the Class II-MR Interest, the Class II-LR
Interest, the Class SI-UR Interest, the Class SI-MR Interest and the Class SI-LR
Interest.

     Class 30-IO Notional   Amount:   With respect to each   Distribution   Date, an
amount   equal   to the   product   of (i) the   aggregate   of the   Stated   Principal
Balances of the Premium Mortgage Loans as of the Due Date in the month preceding
the month of such   Distribution   Date and (ii) a fraction,   (a) the numerator of
which is equal to the weighted average of the Net Mortgage Interest Rates of the
Premium   Mortgage Loans (based on the Stated   Principal   Balances of the Premium
Mortgage   Loans   as of the Due Date in the   month   preceding   the   month of such
Distribution   Date)   minus   6.10% and (b) the   denominator   of which is equal to
6.00%.

     Class B Certificates: The Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5 and Class B-6 Certificates.

                                      -28-

 
<PAGE>

     Class CE Certificates:   The Class CE Certificates,   which represent (i) the
corresponding    Upper-Tier   II   Regular   Interest   for   purposes   of   the   REMIC
Provisions,   (ii) the obligation to pay Cap Carryover Amounts,   Swap Termination
Payments and the Class IO Distribution Amount and (iii) the right to receive the
Class IO Distribution Amount and amounts from the Cap Carryover Reserve Account,
the Swap Account, and the Class T-A-4 Interest Rate Cap Agreement Account.

     Class CE Distributable   Amount:   With respect to any Distribution Date, the
sum of (i) the interest accrued on the Class CE Upper-Tier II Regular   Interests
at their   Pass-Through   Rate calculated on their Notional Amount less the amount
(without   duplication)   of   Cap   Carryover   Amounts   paid   pursuant   to   Section
5.03(c)(i) and any Defaulted Swap Termination   Payments paid pursuant to Section
5.03(d), (ii) any remaining   Overcollateralization Release Amounts and (iii) the
amounts    remaining   in   (A)   the   Cap   Carryover    Reserve   Account   after   the
distributions in Section 3.09(i), (B) the Supplemental Interest Trust in respect
of the Swap Account after   distributions   in Section   5.03(d),   priorities first
through ninth and (C) the Class T-A-4 Interest Rate Cap Agreement   Account after
distributions in Section 5.03(e).

     Class CE Grantor Trust:   The grantor trust created pursuant to Section 5.12
consisting   of   any   interests   in   the   Cap   Carryover    Reserve    Account   and
Supplemental   Interest Trust   beneficially   owned by the holders of the Class CE
Certificates   and rights and   obligations   with   respect   thereto.   The Class CE
Grantor Trust shall not be an asset of any REMIC formed hereunder.

     Class Certificate   Balance:   With respect to any Class of Shifting Interest
Certificates   (other   than   the   Interest   Only   Certificates)   and any   date of
determination,   and subject to Section   5.04(b)(vi),   an amount equal to (a) the
Initial   Class   Certificate   Balance or, in the case of a Class of   Exchangeable
REMIC Certificates or Exchangeable   Certificates,   the Aggregate Denomination of
such Class (plus, in the case of the Class 1-A-20 and Class 1-A-21 Certificates,
any   Class   1-A-20   Accrual    Distribution   Amounts   and   Class   1-A-21   Accrual
Distribution Amounts,   respectively,   previously added thereto) minus the sum of
(i) all   distributions of principal made with respect thereto   (including in the
case of a Class of Class M-1 Certificates or Class B Certificates, any principal
otherwise   payable to such   Class of   Certificates   used to pay any PO   Deferred
Amounts),   (ii) all reductions in Class Certificate Balance previously allocated
thereto pursuant to Section 5.04(b)(i) and (iii) in the case of the Class 1-A-5,
Class 1-A-15 and Class 1-A-17   Certificates,   any   reduction   allocated   thereto
pursuant to Section   5.04(b)(iv)   plus (b) the sum of (i) all increases in Class
Certificate Balance previously   allocated thereto pursuant to Section 5.04(b)(i)
and   (ii) in the   case   of the   Class   1-A-5,   Class   1-A-15   and   Class   1-A-17
Certificates,   any increases allocated thereto pursuant to Section   5.04(b)(iv).
The Class 1-A-4,   Class 1-A-6, Class 1-A-8,   Class 1-A-10,   Class 1-A-12,   Class
1-A-14,   Class 1-A-19,   Class 1-A-25,   Class 1-A-28, Class 1-A-35, Class 1-A-38,
Class 1-A-41 and Class 30-IO   Certificates   are Interest Only   Certificates   and
have no Class Certificate Balance.

     With respect to any Class of   Overcollateralized   Certificates   (other than
the Class CE   Certificates)   and any date of   determination,   and subject to the
last paragraph of Section 5.04(c), the Initial Class Certificate Balance of such
Class (a) reduced by the sum of (i) all amounts actually   distributed in respect
of   principal   of such Class on all prior   Distribution   Dates and (ii)   Applied
Realized Loss Amounts allocated thereto for previous   Distribution Dates and (b)
increased by any   Recoveries   allocated to such Class for previous   Distribution
Dates.

                                      -29-

 
<PAGE>

     With respect to the Class CE   Certificates   and any date of   determination,
and solely for federal   income tax   purposes,   the   excess,   if any, of the then
aggregate Uncertificated Balances of the Uncertificated Middle-Tier II Interests
(other than the Class MRII-IOA   Interest,   the Class   MRII-IOB   Interest and the
Class MRII-IOC   Interest) over the aggregate   Class   Certificate   Balance of the
Offered   Overcollateralized   Certificates   and   the   Class   T-B-1   and   Class   P
Certificates then outstanding.

     Class   Distribution   Amount:   As to any Distribution Date and each Class of
Exchangeable   Certificates,   an   amount   equal   to the sum of (i)   the   Interest
Distribution   Amount   for such Class and (ii) the Class   Principal   Distribution
Amount for such Class.

     Class   Interest   Shortfall:   For any   Distribution   Date and each   Class of
interest-bearing   Shifting Interest   Certificates,   the amount by which Shifting
Interest   Accrued   Certificate   Interest for such Class (as reduced   pursuant to
Section   5.02(c))   exceeds the amount of interest   actually   distributed on such
Class (or, in the case of the Class 1-A-20 and Class 1-A-21   Certificates   prior
to the applicable   Accretion   Termination Date, the amount included in the Class
1-A-20 Accrual   Distribution Amount or Class 1-A-21 Accrual Distribution Amount,
as   applicable,   pursuant   to   clause   (i) of the   definition   thereof,   but not
distributed   pursuant to the proviso in Section 5.02(a)(i)) on such Distribution
Date pursuant to clause (i) of the definition of "Interest Distribution Amount."

     Class IO Distribution Amount: As defined in Section 5.14(e) hereof. For the
purpose of clarity,   the Class IO Distribution   Amount for any Distribution Date
shall   equal the   amount   payable   to the   Supplemental   Interest   Trust on such
Distribution   Date   in   excess   of the   amount   payable   on the   Class   Swap-IOA
Interest,   the Class Swap-IOB   Interest and the Class Swap-IOC   Interest on such
Distribution Date, all as further provided in Section 5.14(e) hereof.

     Class   P   Certificates:   The   Class P   Certificates,   which   represent   the
corresponding    Upper-Tier   II   Regular   Interest   for   purposes   of   the   REMIC
Provisions   and   are   entitled   to   distributions   in   respect   of   their   Class
Certificate Balance and certain Prepayment Charges as set forth herein.

     Class Principal   Distribution   Amount: As to any Distribution Date and each
Class of Exchangeable   Certificates,   an amount as to principal equal to (i) the
distributions    of   principal   made   in   respect   of   the   Related    Classes   of
Exchangeable REMIC Certificates pursuant to Section 5.02(b) multiplied by (ii) a
fraction,   the numerator of which is the Aggregate Denomination of such Class of
Exchangeable   Certificates   and the   denominator of which is the Maximum Initial
Class Certificate Balance of such Class of Exchangeable Certificates.

     Class Swap-IOA Interest: An uncertificated   interest representing the right
to   distributions   as set forth herein and   evidencing   an Upper-Tier II Regular
Interest for purposes of the REMIC Provisions.

     Class Swap-IOB Interest: An uncertificated   interest representing the right
to   distributions   as set forth herein and   evidencing   an Upper-Tier II Regular
Interest for purposes of the REMIC Provisions.

                                      -30-

 
<PAGE>

     Class Swap-IOC Interest: An uncertificated   interest representing the right
to   distributions   as set forth herein and   evidencing   an Upper-Tier II Regular
Interest for purposes of the REMIC Provisions.

     Class T-A-4   Interest Rate Cap   Agreement:   The interest rate cap agreement
between   the    Supplemental    Interest    Trust   Trustee   and   the   Cap   Provider
substantially   in the form   attached   hereto as   Exhibit   T-3.   The Class   T-A-4
Interest Rate Cap Agreement shall not be an asset of any REMIC formed under this
Agreement.

     Class T-A-4   Interest   Rate Cap   Agreement   Account:   The Eligible   Account
created and maintained by the   Supplemental   Interest Trust Trustee   pursuant to
Section 5.14. The Class T-A-4 Interest Rate Cap Agreement   shall not be an asset
of any REMIC formed under this Agreement.

     Class T-B-1 Principal Distribution Amount: As of any Distribution Date, the
excess of (x) the sum of (i) the   aggregate   Class   Certificate   Balance   of the
Senior Overcollateralized Certificates (after taking into account the payment of
the Overcollateralized Senior Principal Distribution Amount on such Distribution
Date), (ii) the Class Certificate Balance of the Class T-M-1 Certificates (after
taking into account the payment of the Class T-M-1 Principal Distribution Amount
on such Distribution   Date),   (iii) the Class   Certificate   Balance of the Class
T-M-2   Certificates   (after   taking into   account the payment of the Class T-M-2
Principal   Distribution   Amount   on such   Distribution   Date),   (iv)   the   Class
Certificate   Balance of the Class T-M-3 Certificates   (after taking into account
the   payment   of   the   Class   T-M-3   Principal    Distribution    Amount   on   such
Distribution   Date),   (v) the   Class   Certificate   Balance   of the   Class   T-M-4
Certificates (after taking into account the payment of the Class T-M-4 Principal
Distribution   Amount on such   Distribution   Date),   (vi) the   Class   Certificate
Balance of the Class T-M-5   Certificates   (after taking into account the payment
of the Class T-M-5 Principal   Distribution Amount on such Distribution Date) and
(vii) the Class Certificate Balance of the Class T-B-1 Certificates   immediately
prior to such   Distribution   Date over (y) the lesser of (a) the   product of (i)
99.10% and (ii) the aggregate Stated Principal   Balance of the Group T2 Mortgage
Loans as of the last day of the related   Collection Period and (b) the amount by
which the aggregate Stated   Principal   Balance of the Group T2 Mortgage Loans as
of the last day of the   related   Collection   Period   exceeds   the product of (i)
0.35% and (ii) the aggregate Stated   Principal   Balance of the Group T2 Mortgage
Loans as of the Cut-off Date.

     Class T-M-1 Principal Distribution Amount: As of any Distribution Date, the
excess of (x) the sum of (i) the   aggregate   Class   Certificate   Balance   of the
Senior Overcollateralized Certificates (after taking into account the payment of
the Overcollateralized Senior Principal Distribution Amount on such Distribution
Date) and (ii) the Class   Certificate   Balance of the Class   T-M-1   Certificates
immediately   prior to such   Distribution   Date   over (y) the   lesser   of (a) the
product of (i) 92.10% and (ii) the   aggregate   Stated   Principal   Balance of the
Group T2 Mortgage Loans as of the last day of the related   Collection Period and
(b) the amount by which the aggregate Stated   Principal   Balance of the Group T2
Mortgage Loans as of the last day of the related   Collection   Period exceeds the
product   of (i) 0.35% and (ii) the   aggregate   Stated   Principal   Balance of the
Group T2 Mortgage Loans as of the Cut-off Date.

                                      -31-

 
<PAGE>

     Class T-M-2 Principal Distribution Amount: As of any Distribution Date, the
excess of (x) the sum of (i) the   aggregate   Class   Certificate   Balance   of the
Senior Overcollateralized Certificates (after taking into account the payment of
the Overcollateralized Senior Principal Distribution Amount on such Distribution
Date), (ii) the Class Certificate Balance of the Class T-M-1 Certificates (after
taking into account the payment of the Class T-M-1 Principal Distribution Amount
on such Distribution Date) and (iii) the Class Certificate   Balance of the Class
T-M-2   Certificates   immediately   prior to such   Distribution   Date over (y) the
lesser of (a) the product of (i) 94.70% and (ii) the aggregate   Stated Principal
Balance   of the   Group T2   Mortgage   Loans   as of the   last   day of the   related
Collection   Period and (b) the amount by which the   aggregate   Stated   Principal
Balance   of the   Group T2   Mortgage   Loans   as of the   last   day of the   related
Collection Period exceeds the product of (i) 0.35% and (ii) the aggregate Stated
Principal Balance of the Group T2 Mortgage Loans as of the Cut-off Date.

     Class T-M-3 Principal Distribution Amount: As of any Distribution Date, the
excess of (x) the sum of (i) the   aggregate   Class   Certificate   Balance   of the
Senior Overcollateralized Certificates (after taking into account the payment of
the Overcollateralized Senior Principal Distribution Amount on such Distribution
Date), (ii) the Class Cert