POOLING AND SERVICING AGREEMENT

POOLING AND SERVICING AGREEMENT

Dated as of January 1, 2007

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THIS POOLING AND SERVICING AGREEMENT, dated as of January 1, 2007, among HSI ASSET SECURITIZATION CORPORATION, as depositor (the “ Depositor ”), WELLS FARGO BANK, N.A., a national banking association, as originator (in such capacity, the “ Originator ”), servicer (in such capacity, the “ Servicer ”) and custodian (“the Custodian ”), CITIMORTGAGE, INC., as master servicer (the “ Master Servicer ”), CITIBANK, N.A., as securities administrator (the “ Securities Administrator ”), OFFICETIGER GLOBAL REAL ESTATE SERVICES INC., as credit risk manager (the “ Credit Risk Manager ”), and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as trustee (the “ Trustee ”).

In consideration of the mutual agreements herein contained, the parties hereto agree as follows:

The Securities Administrator on behalf of the Trust Fund shall elect that the Trust Fund (exclusive of (i) the Cap Agreement (ii) the right to receive and the obligation to pay Basis Risk Carryover Amounts, (iii) the Excess Reserve Fund Account, (iv) the Collateral Account, and (v) the Supplemental Interest Trust and the Cap Account (collectively, the “ Excluded Trust Assets ”)) be treated for federal income tax purposes as comprising two real estate mortgage investment conduits under Section 860D of the Code (each a “ REMIC ” or, in the alternative, “ REMIC 1 ,” and “ REMIC 2 ,”; REMIC 2 also being referred to herein as the “ Upper Tier REMIC .”) Any inconsistencies or ambiguities in this Agreement or in the administration of this Agreement shall be resolved in a manner that preserves the validity of such REMIC election.

Each Certificate, other than the Class R Certificates, represents ownership of a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions. In addition, each Certificate, other than the Class R, Class X and Class P Certificates, represents the right to receive payments with respect to any Basis Risk Carryover Amounts. The Class R Certificate represents ownership of the sole Class of residual interest in each of REMIC 1 and the Upper Tier REMIC for purposes of the REMIC Provisions.

The Upper Tier REMIC shall hold as its assets the uncertificated Lower Tier Interests in REMIC 1, other than the Class LT1-R interest, and each such Lower Tier Interest is hereby designated as a regular interest in REMIC 1 for purposes of the REMIC Provisions. REMIC 1 shall hold as its assets the property of the Trust Fund other than the Lower Tier Interests in REMIC 1 and the Excluded Trust Assets.

(i)   first, to each interest in REMIC 1 having a Corresponding Class in REMIC 2 until the outstanding principal amount of each such interest equals one-half of the outstanding principal amount of the Corresponding Class of Certificates for such interest immediately after such Distribution Date;

(ii)   finally, to the Class LT1-Q Interest, any remaining amounts.

The Upper Tier REMIC shall issue the following Classes of Upper Tier REMIC Regular Interests and each such interest, other than the Class R Interest, is hereby designated as a regular interest in the Upper Tier REMIC.

The minimum denomination for each Class of Certificates, other than the Class P, Class R and the Class X Certificates, will be $25,000 of Certificate Balance ($100,000 with respect to initial investors resident in a Member State of the European Economic Area subject to the EU Prospectus Directive 2003/71/EC) with integral multiples of $1 in excess thereof, except that one Certificate in each Class may be issued in a different amount. The minimum denomination for each of the Class P and Class X Certificates will be a 10.00% Percentage Interest in such Class, and the minimum denomination for the Class R Certificates shall be 100% Percentage Interest in such Class.

Set forth below are designations of Classes of Certificates to the categories used herein:

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

10-K Filing Deadline : As defined in Section 8.12(a)(ii).

Accepted Servicing Practices : With respect to any Mortgage Loan and the Servicer, the servicing and administration of such Mortgage Loan (i)  the same manner in which, and with the same care, skill, prudence and diligence with which the Servicer generally services and administers similar mortgage loans with similar mortgagors (A) for other third parties, giving due consideration to customary and usual standards of practice of prudent institutional residential mortgage lenders servicing their own mortgage loans or (B) held in the Servicer’s own portfolio, whichever standard is higher, and (ii) in accordance with applicable local, state and federal laws, rules and regulations.

Account : Any of the Collection Account, the Collateral Account, the Master Servicing Account, the Distribution Account and any Escrow Account, and with respect to the Supplemental Interest Trust, the Excess Reserve Fund Account and the Cap Account. Each Account shall be an Eligible Account.

Additional Disclosure Notification : The form of notice set forth on Exhibit Y.

Additional Form 10-D Disclosure : As defined in Section 8.12(a)(i).

Additional Form 10-K Disclosure : As defined in Section 8.12(a)(ii)(A).

Additional Termination Event : As defined in the Cap Agreement.

Advance : Any P&I Advance or Servicing Advance.

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

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

Amounts Held for Future Distribution : As to the Certificates on any Distribution Date, the aggregate amount held in the Collection Account at the close of business on the related Determination Date on account of (i) Principal Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and Subsequent Recoveries on the Mortgage Loans received after the end of the related Prepayment Period and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the related Due Period.

Applied Realized Loss Amount : With respect to any Distribution Date, the amount, if any, by which the aggregate Class Certificate Balance of the LIBOR Certificates after distributions of principal on such Certificates on such Distribution Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date.

Appraised Value : The value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property.

Assignment of Mortgage : An assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form (other than the assignee’s name and recording information not yet returned from the recording office), reflecting the sale of the Mortgage to the Trustee.

Available Funds : With respect to any Distribution Date and the Mortgage Loans to the extent received by the Securities Administrator (x) the sum of (i) all scheduled installments of interest (net of the related Expense Fees) and principal due on the Due Date on such Mortgage Loans in the related Due Period and received by the Servicer on or prior to the related Determination Date, together with any P&I Advances in respect thereof; (ii) all Condemnation Proceeds, Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries received by the Servicer during the related Prepayment Period (in each case, net of unreimbursed expenses incurred in connection with a liquidation or foreclosure and unreimbursed Advances, if any); (iii) all partial or full prepayments on the Mortgage Loans received by the Servicer during the related Prepayment Period together with all Compensating Interest paid by the Servicer in connection therewith (excluding any Prepayment Charges); (iv) all Substitution Adjustment Amounts with respect to the substitutions of Mortgage Loans that occur on or prior to the related Determination Date; (v) all amounts received with respect to such Distribution Date as the Repurchase Price in respect of a Mortgage Loan repurchased by the Originator or the Sponsor on or prior to the related Determination Date; and (vi) the proceeds with respect to the termination of the Trust Fund pursuant to clause (a) of Section 11.01; reduced by (y) amounts in reimbursement for Advances previously made with respect to the Mortgage Loans and other amounts as to which the Servicer, the Depositor, the Master Servicer, the Securities Administrator, the Credit Risk Manager or the Trustee are entitled to be paid or reimbursed pursuant to this Agreement.

Available Funds Cap : With respect to any Distribution Date, the per annum rate (subject to adjustment based on the actual number of days elapsed in the related Interest Accrual Period with respect to the LIBOR Certificates) equal to the weighted average of the Expense Adjusted Mortgage Rate for each Mortgage Loan then in effect at the beginning of the related Due Period (not including for this purpose any Mortgage Loans for which Principal Prepayments in Full have been received and distributed in the month prior to that Distribution Date)

Back-up Certification : As defined in Section 3.24.

Basic Principal Payment Amount : With respect to any Distribution Date, the excess of (i) the Principal Remittance Amount for such Distribution Date over (ii) the Excess Overcollateralization Amount, if any, for such Distribution Date.

Basis Risk Carryover Amount : With respect to each Class of LIBOR and Fixed Rate Certificates, as of any Distribution Date, the sum of (A) if on such Distribution Date the Interest Rate for any Class of LIBOR or Fixed Rate Certificates is based upon the Available Funds Cap, the excess of (i) the amount of interest such Class of Certificates would otherwise be entitled to receive on such Distribution Date had such Interest Rate not been subject to the Available Funds Cap, over (ii) the amount of interest payable on such Class of Certificates for such Distribution Date based on the Available Funds Cap and (B) the portion of any such excess described in clause (A) for such Class of Certificates from all previous Distribution Dates not previously paid, together with interest thereon at a rate equal the applicable Interest Rate for each such Class of Certificates for such Distribution Date.

Basis Risk Payment : For any Distribution Date, an amount equal to the lesser of (i) the aggregate of the Basis Risk Carryover Amounts of the LIBOR and Fixed Rate Certificates for such Distribution Date and (ii) the Class X Distributable Amount (prior to any reduction for Basis Risk Payments).

Best’s : Best’s Key Rating Guide, as the same shall be amended from time to time.

Book-Entry Certificates : As specified in the Preliminary Statement.

Business Day : Any day other than (i) Saturday or Sunday, or (ii) a day on which banking and savings and loan institutions, in (a) the States of New York, California, Maryland or Minnesota, (b) the Commonwealth of Pennsylvania or any other State in which the Servicer’s servicing operations are located, or (c) any State in which the Corporate Trust Office is located, are authorized or obligated by law or executive order to be closed.

Cap Account : The Account created pursuant to Section 4.06(a).

Cap Agreement : The interest rate cap agreement entered into by the Supplemental Interest Trust and the Cap Counterparty, dated February 6, 2007, which agreement provides for the monthly payment specified to the trustee of the Supplemental Interest Trust (for the benefit of Certificateholders) commencing with the Distribution Date in August 2007 and ending on the Distribution Date in February 2009, by the Cap Counterparty, but subject to the conditions set forth therein, together with any schedule, confirmations or other agreements relating thereto, a form of which is attached as Exhibit P.

Cap Amount : With respect to each Distribution Date, the amount of any Cap Payment deposited into the Cap Account.

Cap Counterparty : The counterparty to the Supplemental Interest Trust under the Cap Agreement, and any successor in interest or its assigns. Initially, the Cap Counterparty shall be Bear Stearns Financial Products Inc.

Cap Payment : With respect to each Distribution Date, any payment required to be made by the Cap Counterparty to the Supplemental Interest Trust pursuant to the terms of the Cap Agreement.

Cap Payment Dat e: For as long as the Cap Agreement is in effect or any amounts remain unpaid thereunder, the Business Day immediately preceding each Distribution Date.

Cap Replacement Receipts : As defined in Section 4.08(a)(ii).

Cap Replacement Receipts Account : As defined in Section 4.08(a)(ii).

Certificate Balance : With respect to any Certificate, other than a Class X, Class P or Class R Certificate, at any date, the maximum dollar amount of principal to which the Holder thereof is then entitled hereunder, such amount being equal to the Denomination thereof minus all distributions of principal previously made with respect thereto and in the case of any Class M Certificates, reduced by any Applied Realized Loss Amounts allocated to such Class of Certificates pursuant to Section 4.05; provided, however , that immediately following the Distribution Date on which a Subsequent Recovery is distributed, the Class Certificate Balances of any Class or Classes of Certificates that have been previously reduced by Applied Realized Loss Amounts will be increased, in order of seniority, by the amount of any Subsequent Recovery distributed on such Distribution Date (up to the amount of Unpaid Realized Loss Amount for such Class or Classes for such Distribution Date). The Class P Certificates are issued with an initial Class P Principal Amount of $100. The Class X and Class R Certificates have no Certificate Balance.

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

Certificate Register : The register maintained pursuant to Section 5.02.

Certificateholder or Holder : 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 or any Affiliate of the Depositor shall be deemed not to be Outstanding and the Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite amount of Percentage Interests necessary to effect such consent has been obtained; provided, however , that if any such Person (including the Depositor) owns 100.00% of the Percentage Interests evidenced by a Class of Certificates, such Certificates shall be deemed to be Outstanding for purposes of any provision hereof that requires the consent of the Holders of Certificates of a particular Class as a condition to the taking of any action hereunder. The Securities Administrator is entitled to rely conclusively on a certification of the Depositor or any Affiliate of the Depositor in determining which Certificates are registered in the name of an Affiliate of the Depositor.

Certification Parties : As defined in Section 3.24(a).

Certifying Person : As defined in Section 3.24(a).

Citibank : Citibank, N.A., and its successors in interest.

CitiMortgage : CitiMortgage, Inc., and its successors in interest.

Class : All Certificates bearing the same class designation as set forth in the Preliminary Statement.

Class A-1 Certificates : All Certificates bearing the Class designation of “Class A-1”.

Class A-2 Certificates : All Certificates bearing the Class designation of “Class A-2”.

Class A-3 Certificates : All Certificates bearing the Class designation of “Class A-3”.

Class A-4 Certificates : All Certificates bearing the Class designation of “Class A-4”.

Class A-5 Certificates : All Certificates bearing the Class designation of “Class A-5”.

Class A-6 Certificates : All Certificates bearing the Class designation of “Class A-6”.

Class A Certificates : As specified in the Preliminary Statement.

Class A-6 Priority Amount : With respect to any Distribution Date, the product of the (a) Class A-6 Priority Percentage, (b) the Class A-6 Shift Percentage and (c) either (i) on any Distribution Date prior to the Stepdown Date or on which a Trigger Event is in effect, the Principal Payment Amount for such Distribution Date or (ii) on any Distribution Date on or after the Stepdown Date and on which a Trigger Event is not in effect, the Senior Principal Payment Amount for such Distribution Date.

Class A-6 Priority Percentage : With respect to any Distribution Date, the aggregate Class Certificate Balance of the Class A-6 Certificates divided by the aggregate Class Certificate Balance of the Class A Certificates, in each case without taking into account any distributions made on such Distribution Date.

Class A-6 Shift Percentage With respect to any Distribution Date, the percentage indicated below:

Class Certificate Balance : With respect to any Class of LIBOR or Fixed Rate Certificates and as to any date of determination, the aggregate of the Certificate Balances of all Certificates of such Class as of such date. With respect to the Class X, Class P and Class R Certificates, zero. With respect to any Lower Tier Interest and as to any date of determination, the initial Class Principal Balance as shown or described in the table set forth in the Preliminary Statement to this Agreement for the issuing REMIC, as reduced by any principal distributed with respect to such Lower Tier Interest and Realized Losses allocated to such Lower Tier Interest.

Class M Certificates : As specified in the Preliminary Statement.

Class M Principal Payment Amount : With respect to any Distribution Date and any Class of Class M Certificates, the lesser of (i) the excess of (a) the Principal Payment Amount over (b) the aggregate amount distributed on that Distribution Date as principal to all Classes of Certificates more senior than that Class of Class M Certificates ( provided, however , for this purpose, the Class M-1, Class M-2 and Class M-3 Certificates will be treated as having the same seniority) and (ii) the excess of (a) the sum of the aggregate Class Certificate Balances of all Class of Certificates more senior than that Class of Class M Certificates (after giving effect to all amounts distributed on that Distribution Date to those Classes of more senior certificates ( provided, however , for this purpose, the Class M-1, Class M-2 and Class M-3 Certificates will be treated as having the same seniority)) and the Class Certificate Balance of that Class of Class M Certificates immediately prior to that Distribution Date over (b) the lesser of:

(x)   the percentage set forth in the table below for the applicable Class of Class M Certificates multiplied by the aggregate Stated Principal Balance of the Mortgage Loans for that Distribution Date:

and

(y)   the excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans for that Distribution Date over 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, until the Class Certificate Balance of that Class of Class M Certificates has been reduced to zero.

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Class M-1 Certificates : All Certificates bearing the Class designation of “Class M-1”.

Class M-2 Certificates : All Certificates bearing the Class designation of “Class M-2”.

Class M-3 Certificates : All Certificates bearing the Class designation of “Class M-3”.

Class M-4 Certificates : All Certificates bearing the Class designation of “Class M-4”.

Class M-5 Certificates : All Certificates bearing the Class designation of “Class M-5”.

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Class M-6 Certificates : All Certificates bearing the Class designation of “Class M-6”.

Class M-7 Certificates : All Certificates bearing the Class designation of “Class M-7”.

Class P Certificates : All Certificates bearing the Class designation of “Class P”.

Class P Principal Amount : As of the Closing Date, $100.00.

Class R Certificates : All Certificates bearing the Class designation of “Class R”.

Class X Certificates : All Certificates bearing the Class designation of “Class X”.

Class X Distributable Amount : With respect to any Distribution Date, the amount of interest that has accrued on the Class X Notional Balance, as described in the Preliminary Statement, but that has not been distributed prior to such date. In addition, such amount shall include the initial Overcollateralization Amount of $6,808,276 ($6,808,376 less $100 of such amount allocated to the Class P Certificates) to the extent such amount has not been distributed on an earlier Distribution Date as part of the Overcollateralization Reduction Amount.

Class X Notional Balance : With respect to any Distribution Date (and the related Interest Accrual Period) the aggregate principal balance of the regular interests in REMIC 1 as specified in the Preliminary Statement hereto.

Closing Date : February 6, 2007.

Code : The Internal Revenue Code of 1986, including any successor or amendatory provisions.

Collateral Account : The account maintained by the trustee of the Supplemental Interest Trust in accordance with the provisions of Section 4.06(b).

Collection Account : As defined in Section 3.10(a).

Commission : The United States Securities and Exchange Commission.

Compensating Interest : For any Distribution Date, the aggregate amount of the Servicing Fee actually retained by or paid to the Servicer for such Distribution Date.

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

Corporate Trust Office : With respect to the Securities Administrator, (i) for transfer, presentation or surrender of Certificates, the office at 111 Wall Street, 15 ^th Floor Window, New York, New York 10005, Attention: Corporate Trust Services - HALO 2007-WF1, and (ii) for all other purposes, 388 Greenwich Street, 14 ^th Floor, New York, New York 10013, Attention: Structured Finance Agency and Trust - HALO 2007-WF1 or at such other address as the Securities Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer and the Trustee. With respect to the Trustee, the designated office of the Trustee in the State of California at which any particular time its corporate trust business with respect to this Agreement is administered, which office at the date of the execution of this Agreement is located at 1761 East St. Andrew Place, Santa Ana, California 92705-4934, Attention: Trust Administration - HB07W1, facsimile number (714) 247-6329, and its telephone number is (714) 247-6000 and which is also the address to which notices to and correspondence with the Trustee under this Agreement should be directed.

Corresponding Class : As set forth in first table under the heading REMIC 1 and in the first table under the heading Upper Tier REMIC in the Preliminary Statement.

Credit Enhancement Percentage : With respect to any Distribution Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class Certificate Balance of the Class M Certificates and (ii) the Overcollateralization Amount (assuming the Overcollateralization Amount is not less than zero and in each case after taking into account the distributions of the Principal Payment Amount for such Distribution Date assuming no Trigger Event has occurred) by (y) the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date.

Credit Risk Manager : OfficeTiger Global Real Estate Services Inc., formerly known as MortgageRamp, Inc., and its successors and assigns.

Credit Risk Management Agreement : The Loan Performance Monitoring Agreement dated as of the Closing Date, entered into by the Servicer and the Credit Risk Manager.

Credit Risk Manager’s Fee : With respect to any Distribution Date and each Mortgage Loan, an amount equal to the product of (a) one twelfth, (b) the Credit Risk Manager’s Fee Rate and (c) the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period; provided, however, that such amount shall not be less than $1,500.00 on each Distribution Date.

Credit Risk Manager’s Fee Rate : 0.014% per annum.

Credit Support Annex : The credit support annex to the Cap Agreement dated as of February 6, 2007, between the trustee of the Supplemental Interest Trust, on behalf of the Supplemental Interest Trust and the Cap Counterparty.

Cumulative Loss Percentage : With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate amount of Realized Losses incurred from the Cut-off Date to the last day of the calendar month preceding the month in which such Distribution Date occurs and the denominator of which is the Cut-off Date Pool Principal Balance of the Mortgage Loans.

Cumulative Loss Trigger Event : If, with respect to any Distribution Date, the quotient (expressed as a percentage) of (x) the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Prepayment Period, divided by (y) the Cut-off Date Pool Principal Balance, exceeds the applicable loss percentages set forth below with respect to such Distribution Date:

Custodial File : The meaning assigned to such term in Section 2.01(a).

Custodian: Initially, Wells Fargo, or any successor custodian appointed hereunder.

Cut-off Date : January 1, 2007.

Cut-off Date Pool Principal Balance : The aggregate Stated Principal Balances of all Mortgage Loans as of the Cut-off Date.

Cut-off Date Principal Balance : As to any Mortgage Loan, the Stated Principal Balance thereof as of the close of business on the Cut-off Date.

Data Tape Information : With respect to each Mortgage Loan, the same information (provided as of the Cut-off Date) included in the data fields specified under the definition of “Mortgage Loan Schedule” in the Seller’s Warranties and Servicing Agreement, with such additions and modifications as agreed upon by the Originator and the Depositor. A copy of the Seller’s Warranties and Servicing Agreement is attached as Exhibit Q hereto.

Debt Service Reduction : With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction in a proceeding under the United States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became final and non-appealable, except such a reduction resulting from a Deficient Valuation or any reduction that results in a permanent forgiveness of principal.

Defaulting Party: As defined in the Cap Agreement.

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

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

Delay Certificates : As specified in the Preliminary Statement.

Deleted Mortgage Loan : As defined in Section 2.03.

Delinquency Rate : For any calendar month, a fraction, expressed as a percentage, the numerator of which is the aggregate Stated Principal Balance of 60+ Day Delinquent Mortgage Loans as of the close of business on the last day of such month (not including those Mortgage Loans that are liquidated as of the end of the related Prepayment Period), and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the close of business on the last day of such month (not including those Mortgage Loans that are liquidated as of the end of the related Prepayment Period).

Delinquency Trigger Event : With respect to any Distribution Date on or after the Stepdown Date, the circumstances in which the Rolling Three Month Delinquency Rate as of the last day of the immediately preceding calendar month exceeds the applicable percentages of the Credit Enhancement Percentage for the prior Distribution Date (for the purpose of this definition, the Credit Enhancement Percentage for each class of the Class M Certificates will be calculated by dividing (x) the sum of (i) the aggregate Class Certificate Balance of the Class M Certificates with a lower payment priority than that Class and (ii) the Overcollateralization Amount (in each case after taking into account distributions of the related Principal Payment Amount for that Distribution Date) by (y) the aggregate Stated Principal Balance of the Mortgage Loans for that Distribution Date) as set forth below for the most senior Class of LIBOR or Fixed Rate Certificates then outstanding:

Denomination : With respect to each Certificate, the amount set forth on the face thereof as the “Initial Certificate Balance of this Certificate” or the Percentage Interest appearing on the face thereof.

Depositor : HSI Asset Securitization Corporation, a Delaware corporation, and its successors in interest.

Depository : The initial Depository shall be The Depository Trust Company, the nominee of which is CEDE & Co., as the registered Holder of the Book-Entry Certificates. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York.

Depository Institution : Any depository institution or trust company, including the Trustee and the Securities Administrator, that (a) is incorporated under the laws of the United States of America or any State thereof, (b) is subject to supervision and examination by federal or state banking authorities and (c) has outstanding unsecured commercial paper or other short-term unsecured debt obligations that are rated P-1 by Moody’s, F1+ by Fitch and A-1 by Standard & Poor’s ( provided that , to the extent that such outstanding unsecured commercial paper or other short-term debt obligations are rated below A-1+ by Standard & Poor’s, the amounts on deposit (1) represent less than 20% of the initial par value of the securities, (2) are not intended to be used as credit enhancement and (3) are to be held in the account for less than 30 days).

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

Determination Date : With respect to each Remittance Date, the Business Day immediately preceding such Remittance Date.

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

Distribution Account : The separate Eligible Account created and maintained by the Securities Administrator pursuant to Section 3.07(e) in the name of the Securities Administrator as paying agent for the benefit of the Trustee and the Certificateholders and designated “Citibank, N.A. as paying agent in trust for registered holders of HSI Asset Loan Obligation Trust 2007-WF1 Mortgage Pass-Through Certificates, Series 2007-WF1”. Funds in the Distribution Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Distribution Date : The 25th day of each calendar month, or if such day is not a Business Day, the next succeeding Business Day, commencing in February 2007.

Document Certification and Exception Report : The form of report attached to Exhibit F hereto.

Due Date : The day of the month on which the Scheduled Payment is due on a Mortgage Loan, exclusive of any days of grace.

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

Early Termination Event : As defined in the Cap Agreement.

EDGAR : The Commission’s Electronic Data Gathering and Retrieval System.

Eligible Account : Either (i) an account maintained with a federal or state-chartered depository institution or trust company that complies with the definition of Eligible Institution, (ii) an account maintained with the corporate trust department of a federal depository institution or state-chartered depository institution subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal Regulation Section 9.10(b), which, in either case, has corporate trust powers and is acting in its fiduciary capacity or (iii) any other account acceptable to each Rating Agency. Eligible Accounts may bear interest, and may include, if otherwise qualified under this definition, accounts maintained with the Securities Administrator.

Eligible Institution : A federal or state-chartered depository institution or trust company the commercial paper, short-term debt obligations, or other short-term deposits of which are rated at least “A-1+” by Standard & Poor’s if the amounts on deposit are to be held in the account for no more than 365 days (or at least “A-2” if the amounts on deposit are to be held in the account for no more than 30 days), “P-1” by Moody’s and “F1+” by Fitch (or a comparable rating if another Rating Agency is specified by the Depositor by written notice to each of the Servicer and the Securities Administrator) or long-term unsecured debt obligations are rated at least “AA-” by Standard & Poor’s if the amounts on deposit are to be held in the account for more than 365 days. Upon the loss of a required rating, the amounts shall be transferred immediately to accounts which have a required rating.

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

ERISA-Qualifying Underwriting : A best efforts or firm commitment underwriting or private placement that meets the requirements of Prohibited Transaction Exemption (“ PTE ”) 96-84, 61 Fed. Reg. 58234 (1996), as amended by PTE 97-34, 62 Fed. Reg. 39021 (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and PTE 2002-41, 67 Fed. Reg. 54487 (2002) (or any successor thereto), or any substantially similar administrative exemption granted by the U.S. Department of Labor.

ERISA-Restricted Certificate : As specified in the Preliminary Statement.

ERISA-Restricted Trust Certificate: As specified in the Preliminary Statement.

Escrow Account : The Eligible Account or Accounts established and maintained by the Servicer pursuant to Section 3.09.

Escrow Payments : As defined in Section 3.09.

Event of Default : As defined in Section 7.01.

Excess Overcollateralization Amount : With respect to any Distribution Date, the excess, if any, of (a) the Overcollateralization Amount (for purposes of this calculation only, assuming 100% of the Principal Remittance Amount is applied as a principal payment to the LIBOR and Fixed Rate Certificates on such Distribution Date, but before giving effect to any other distributions on the LIBOR and Fixed Rate Certificates in reduction of their respective Class Certificate Balances on such Distribution Date) on such Distribution Date over (b) the Overcollateralization Target Amount for such Distribution Date.

Excess Reserve Fund Account : The separate Eligible Account created and maintained by the Securities Administrator under the Supplemental Interest Trust pursuant to Sections 3.07(b) in the name of the Securities Administrator as paying agent for the benefit of the LIBOR Certificateholders and the Class X Certificateholders and designated “Citibank, N.A. as paying agent in trust for registered holders of HSI Asset Loan Obligation Trust 2007-WF1, Mortgage Pass-Through Certificates, Series 2007-WF1.” Funds in the Excess Reserve Fund Account shall be held in trust for such Certificateholders for the uses and purposes set forth in this Agreement. Amounts on deposit in the Excess Reserve Fund Account shall not be invested. The Excess Reserve Fund Account shall be considered part of the Supplemental Interest Trust but not part of any REMIC.

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

Excluded Trust Assets : As defined in the Preliminary Statement.

Expense Adjusted Mortgage Rate : With respect to any Distribution Date and as to each Mortgage Loan, the per annum rate equal to the Mortgage Rate as of the first day of the related Due Period less the Expense Fee Rate.

Expense Fee Rate : As to each Mortgage Loan, a per annum rate equal to the sum of the Servicing Fee Rate and the Securities Administration Fee Rate.

Expense Fees : As to each Mortgage Loan and any Distribution Date, the sum of the Servicing Fee and the Securities Administration Fee.

Extra Principal Payment Amount : As of any Distribution Date, the lesser of (x) the related Total Monthly Excess Spread for such Distribution Date and (y) the related Overcollateralization Deficiency for such Distribution Date.

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

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

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

Final Scheduled Distribution Date : The Final Scheduled Distribution Date for each Class of Certificates is the Distribution Date occurring in December 2036.

Fitch : Fitch, Inc., or any successor thereto. If Fitch is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 12.05 the address for notices to Fitch shall be Fitch, Inc., One State Street Plaza, New York, New York 10004, Attention: MBS Monitoring - HALO (HSI Asset Loan Obligation Trust 2007-WF1), or such other address as Fitch may hereafter furnish to the Depositor and the Securities Administrator.

Fixed Rate Certificates : As specified in the Preliminary Statement.

Fixed Rate Mortgage Loan : A Mortgage Loan with respect to which the Mortgage Rate set forth in the Mortgage Note is fixed for the term of such Mortgage Loan.

Form 8-K Disclosure Information : As defined in Section 8.12(a)(iii)(A).

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

Gross Margin : With respect to each Adjustable Rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note to be added to the Index to determine the Mortgage Rate.

Independent : When used with respect to any accountants, a Person who is “independent” within the meaning of Rule 2-01(B) of the Commission’s Regulation S-X. Independent means, when used with respect to any other Person, a Person who (A) is in fact independent of another specified Person and any Affiliate of such other Person, (B) does not have any material direct or indirect financial interest in such other Person or any Affiliate of such other Person, (C) is not connected with such other Person or any Affiliate of such other Person as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions and (D) is not a member of the immediate family of a Person defined in clause (B) or (C) above.

Initial Certification : As defined in Section 2.02.

Initial Sale Date : The date the Mortgage Loan was purchased by the Sponsor from the Originator under the Seller’s Warranties and Servicing Agreement.

Insurance Policy : With respect to any Mortgage Loan included in the Trust Fund, any insurance policy, including, but not limited to, any standard hazard insurance policy, flood insurance policy, earthquake insurance policy, title insurance policy or Primary Mortgage Insurance Policy (if any), including all riders and endorsements thereto in effect, including any replacement policy or policies.

Insurance Proceeds : With respect to each Mortgage Loan, proceeds of Insurance Policies insuring the Mortgage Loan or the related Mortgaged Property.

Interest Accrual Period : With respect to each Class of LIBOR Certificates and any Distribution Date, the period commencing on the Distribution Date occurring in the month preceding the month in which the current Distribution Date occurs and ending on the day immediately preceding the current Distribution Date (or, in the case of the first Distribution Date, the period from and including the Closing Date to but excluding such first Distribution Date). For purposes of computing interest accruals on each Class of LIBOR Certificates, each Interest Accrual Period has the actual number of days in such month and each year is assumed to have 360 days. With respect to each Class of Fixed Rate Certificates and any Distribution Date, the period commencing on the last day of the calendar month preceding the month in which the Current Distribution Date occurs and ending on the day immediately preceeding the Current Distribution Date. For purposes of computing interest accruals on each Class of Fixed Rate Certificates, each Interest Accrual Period has 30 days and each year is assumed to have 360 days.

Interest Carry Forward Amount : As of any Distribution Date and any Class of LIBOR or Fixed Rate Certificates, the sum of, if applicable, (i) the portion of the Interest Payment Amount from Distribution Dates prior to the current Distribution Date remaining unpaid immediately prior to the current Distribution Date (excluding any Basis Risk Carryover Amount with respect to such Class), and (ii) interest on the amount in clause (i) above at the applicable Interest Rate (to the extent permitted by applicable law).

Interest Margin : Except as set forth in the following sentence, with respect to each Class of LIBOR Certificates, the following percentages: Class A-1 Certificates, 0.060% and Class A-2 Certificates, 0.100%. On the first Distribution Date after the Optional Termination Date, the Interest Margins shall increase to the following percentages: Class A-1 Certificates, 0.120% and Class A-2 Certificates, 0.200%.

Interest Payment Amount : With respect to any Distribution Date for each Class of LIBOR and Fixed Rate Certificates, the amount of interest accrued during the related Interest Accrual Period at the applicable Interest Rate on the related Class Certificate Balance immediately prior to such Distribution Date, as reduced by such Class’s share of Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution Date allocated to such Class pursuant to Section 4.02(d).

Interest Rate : For each Class of LIBOR and Fixed Rate Certificates, each Class of Upper Tier REMIC Regular Interest and each class of Lower Tier Interest, the per annum rate set forth or calculated in the manner described in the Preliminary Statement.

Interest Remittance Amount : With respect to any Distribution Date and the Mortgage Loans, that portion of Available Funds attributable to interest.

Investment Account : As defined in Section 3.12(a).

Investor : With respect to each MERS Designated Mortgage Loan, the Person named on the MERS System as the investor pursuant to the MERS Procedures Manual.

IRS : The Internal Revenue Service.

Late Collections : With respect to any Mortgage Loan and any Due Period, all amounts received after the Determination Date immediately following such Due Period, whether as late payments of Scheduled Payments or as Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries or otherwise, which represent late payments or collections of principal and/or interest due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) but delinquent for such Due Period and not previously recovered.

If on such a LIBOR Determination Date, the BBA’s Interest Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time), or if the Telerate Page 3750 is not available on such date, the Securities Administrator will obtain such rate from Reuters’ “page LIBOR 01” or, if such rate does not appear therein, the Securities Administrator will obtain such rate from Bloomberg’s page “BBAM.” If such rate is not published for such LIBOR Determination Date, LIBOR for such date will be the most recently published Interest Settlement Rate. In the event that the BBA no longer sets an Interest Settlement Rate, the Securities Administrator will designate an alternative index that has performed, or that the Securities Administrator expects to perform, in a manner substantially similar to the BBA’s Interest Settlement Rate. The Securities Administrator will select a particular index as the alternative index only if it receives an Opinion of Counsel, which opinion shall be an expense reimbursed from the Distribution Account pursuant to Section 4.01, that the selection of such index will not cause any of the REMICs to lose their classification as REMICs for federal income tax purposes.

LIBOR Certificates : As specified in the Preliminary Statement.

LIBOR Determination Date: With respect to any Interest Accrual Period for the LIBOR Certificates, the second London Business Day preceding the commencement of such Interest Accrual Period.

Liquidated Mortgage Loan : With respect to any Distribution Date, a defaulted Mortgage Loan (including any REO Property) which was liquidated in the calendar month preceding the month of such Distribution Date and as to which the Servicer has certified to the Securities Administrator that it has received all amounts it expects to receive in connection with the liquidation of such Mortgage Loan including the final disposition of an REO Property.

Liquidation Proceeds : Cash received in connection with the liquidation of a Liquidated Mortgage Loan, whether through a trustee’s sale, foreclosure sale or otherwise.

Loan-to-Value Ratio or LTV : As of any date and as to any Mortgage Loan, the ratio (expressed as a percentage) of the outstanding principal balance of the Mortgage Loan to (a) in the case of a purchase, the lesser of (i) the sale price of the Mortgaged Property and (ii) its appraised value at the time of sale or (b) in the case of a refinancing or modification, the appraised value of the Mortgaged Property at the time of the refinancing or modification.

London Business Day : Any day on which dealings in deposits of United States dollars are transacted in the London interbank market.

Lower Tier Interest : An interest in any REMIC formed hereby other than the Upper Tier REMIC.

Master Agreement : The ISDA Form Master Agreement, dated February 6, 2007, entered into between the Supplemental Interest Trust and the Cap Counterparty.

Master Servicer : CitiMortgage, and any successors in interest, and if a successor master servicer is appointed hereunder, such successor.

Master Servicer Event of Default : As defined in Section 9.06.

Master Servicer Float Period : With respect to each Distribution Date and the related amounts in the Master Servicing Account, the period commencing on the Remittance Date immediately preceding the related Master Servicer Remittance Date and ending on such Master Servicer Remittance Date.

Master Servicer Remittance Date : As to any Distribution Date, 12:00 noon New York City time on the first Business Day immediately preceding such Distribution Date.

Master Servicing Account : The separate Eligible Account created and maintained by the Master Servicer pursuant to Section 3.07(d) in the name of the Master Servicer for the benefit of the Trustee and the Certificateholders and designated “CitiMortgage, Inc., in trust for registered holders of HSI Asset Loan Obligation Trust 2007-WF1 Mortgage Pass-Through Certificates, Series 2007-WF1”. Funds in the Master Servicing Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Master Servicing Officer : Any officer of the Master Servicer involved in, or responsible for, the administration and master servicing of the Mortgage Loans.

MERS : Mortgage Electronic Registration Systems, Inc., a Delaware corporation, and its successors in interest.

MERS Designated Mortgage Loan : Mortgage Loans for which (a) the Originator has designated or will designate MERS as, and has taken or will take such action as is necessary to cause MERS to be, the mortgagee of record, as nominee for the Originator, in accordance with the MERS Procedure Manual and (b) the Originator has designated or will designate the Trustee as the Investor on the MERS System.

MERS Procedure Manual : The MERS Procedures Manual, as it may be amended, supplemented or otherwise modified from time to time.

MERS® System : MERS mortgage electronic registry system, as more particularly described in the MERS Procedures Manual.

MIN : The Mortgage Identification Number of Mortgage Loans registered with MERS on the MERS® System.

Monthly Statement : The statement made available to the Certificateholders by the Securities Administrator through its website pursuant to Section 4.03.

Moody’s : Moody’s Investors Service, Inc. If Moody’s is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 12.05 the address for notices to Moody’s shall be Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Residential Mortgage Pass-Through Group, HALO (HSI Asset Loan Obligation Trust Series 2007-WF1), or such other address as Moody’s may hereafter furnish to the Depositor and the Securities Administrator.

Mortgage : The mortgage, deed of trust or other instrument identified on the Mortgage Loan Schedule as securing a Mortgage Note.

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

Mortgage Loan : An individual Mortgage Loan that is the subject of this Agreement, each Mortgage Loan originally sold and subject to this Agreement being identified on the Mortgage Loan Schedule, which Mortgage Loan includes, without limitation, the Mortgage File, the Scheduled Payments, Principal Prepayments, Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds, Prepayment Charges, and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan, excluding replaced or repurchased Mortgage Loans.

Mortgage Loan Schedule : A schedule of Mortgage Loans prepared by the Depositor, delivered to the Trustee on the Closing Date and referred to on Schedule I, such schedule setting forth the Data Tape Information with respect to each Mortgage Loan.

Mortgage Note : The note or other evidence of the indebtedness of a Mortgagor under a Mortgage Loan.

Mortgage Rate : The annual rate of interest borne on a Mortgage Note, which shall be adjusted from time to time.

Mortgaged Property : With respect to each Mortgage Loan, the real property (or leasehold estate, if applicable) identified on the Mortgage Loan Schedule as securing repayment of the debt evidenced by the related Mortgage Note.

Mortgagor : The obligor(s) on a Mortgage Note.

Net Monthly Excess Cash Flow : For any Distribution Date, the amount of interest and principal remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving effect to distributions pursuant to such subsection).

Net Prepayment Interest Shortfall : For any Distribution Date, the amount by which the sum of the Prepayment Interest Shortfalls for such Distribution Date exceeds the sum of Compensating Interest payments made with respect to such Distribution Date.

Net WAC Rate : With respect to any Distribution Date (and the related Interest Accrual Period), a per annum rate equal to the weighted average of the Expense Adjusted Mortgage Rates of the Mortgage Loans as of the first day of the related Due Period (not including for this purpose Mortgage Loans for which Principal Prepayments in Full have been received and distributed in the month prior to that Distribution Date).

NIM Issuer : The entity established as the issuer of the NIM Securities.

NIM Securities : Any debt securities secured or otherwise backed by some or all of the Class X and Class P Certificates that are rated by any Rating Agency.

NIM Trustee : The indenture trustee for the NIM Securities.

Non-Delay Certificates : As specified in the Preliminary Statement.

Non-Permitted Transferee : A Person other than a Permitted Transferee.

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

Nonrecoverable P&I Advance : Any P&I Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment (taking into account Accepted Servicing Practices) of the Servicer, the Master Servicer, as successor servicer, or any successor master servicer including the Trustee, as applicable, will not or, in the case of a proposed P&I Advance, would not be ultimately recoverable from related Late Collections on such Mortgage Loan or REO Property as provided herein.

Nonrecoverable Servicing Advance : Any Servicing Advances previously made or proposed to be made in respect of a Mortgage Loan or REO Property, which, in accordance with Accepted Servicing Practices, will not or, in the case of a proposed Servicing Advance, would not be ultimately recoverable from related Late Collections.

Notice of Final Distribution : The notice to be provided by the Securities Administrator pursuant to Section 11.02 to the effect that final distribution on any of the Certificates shall be made only upon presentation and surrender thereof.

Offered Certificates : As specified in the Preliminary Statement.

Offering Documents: The Prospectus and the Private Placement Memorandum.

Officer’s Certificate : A certificate signed by an officer of the Servicer with responsibility for the servicing of the Mortgage Loans.

Opinion of Counsel : A written opinion of counsel, which may be in-house or outside counsel to the Servicer, any Subservicer, the Depositor, the Sponsor, the Master Servicer, the Securities Administrator or the Trustee, acceptable to the Trustee or the Securities Administrator, as applicable (and/or such other Persons as may be set forth herein), except that any opinion of counsel relating to (a) the qualification of any REMIC created hereunder as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.

Option to Purchase:  On the initial or any subsequent Optional Termination Date, the Master Servicer at its own option may purchase, or upon instruction by the Depositor shall purchase, the Mortgage Loans. In the event that the Depositor wishes to instruct the Master Servicer to purchase the Mortgage Loans on any Optional Termination Date, the Depositor shall provide instructions to the Master Servicer to exercise such option no later than 5:00p.m. on the third Business Day immediately preceding such Optional Termination Date, in which event the exercise by the Master Servicer of its option to purchase the Mortgage Loans shall be deemed to have been at the Depositor’s instruction.

Optional Termination Date : Any Distribution Date on which the aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of the related Due Period, is less than or equal to 10.00% of the Cut-off Date Pool Principal Balance.

Originator : Wells Fargo and its successors in interest.

OTS : Office of Thrift Supervision, and any successor thereto.

Outstanding : With respect to the Certificates as of any date of determination, all Certificates theretofore executed and authenticated under this Agreement except:

(i)   Certificates theretofore canceled by the Securities Administrator or delivered to the Securities Administrator for cancellation; and

(ii)   Certificates in exchange for which or in lieu of which other Certificates have been executed and delivered by the Securities Administrator pursuant to this Agreement.

Outstanding Mortgage Loan : As of any Due Date, a Mortgage Loan with a Stated Principal Balance greater than zero which was not the subject of a Principal Prepayment in Full prior to such Due Date and which did not become a Liquidated Mortgage Loan prior to such Due Date.

Overcollateralization Amount : As of any Distribution Date, the excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for such Distribution Date over (b) the aggregate of the Class Certificate Balances of the LIBOR and Fixed Rate Certificates as of such Distribution Date (after giving effect to the payment of the Principal Remittance Amount on such Certificates on such Distribution Date).

Overcollateralization Deficiency : With respect to any Distribution Date, the excess, if any, of (a) the Overcollateralization Target Amount applicable to such Distribution Date over (b) the Overcollateralization Amount (for purposes of this calculation only, assuming 100% of the Principal Remittance Amount is applied as a principal payment to the LIBOR and Fixed Rate Certificates on such Distribution Date, but before giving effect to any other distributions on the LIBOR and Fixed Rate Certificates in reduction of their respective Class Certificate Balances on such Distribution Date) applicable to such Distribution Date.

Overcollateralization Reduction Amount : With respect to any Distribution Date, an amount equal to the lesser of (a) the Excess Overcollateralization Amount and (b) the Net Monthly Excess Cash Flow.

Overcollateralization Target Amount : Prior to the Stepdown Date, an amount equal to 2.30% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date. On and after the Stepdown Date provided a Trigger Event is not in effect, an amount equal to the greater of (i) 4.60% of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period and (ii) 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date; provided, however , that if, on any Distribution Date a Trigger Event exists, the Overcollateralization Target Amount shall not be reduced to the applicable percentage of then current aggregate Stated Principal Balance of the Mortgage Loans until the Distribution Date on which a Trigger Event no longer exists but rather shall remain the Overcollateralization Target Amount as determined for the immediately preceding Distribution Date. When the Class Certificate Balance of each Class of LIBOR Certificates has been reduced to zero, the Overcollateralization Target Amount will thereafter equal zero.

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

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

Percentage Interest : As to any Certificate, the percentage interest evidenced thereby in distributions required to be made on the related Class, such percentage interest being set forth on the face thereof or equal to the percentage obtained by dividing the Denomination of such Certificate by the aggregate of the Denominations of all Certificates of the same Class.

Permitted Investments : Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued by the Servicer, the Securities Administrator, the Trustee or any of their respective Affiliates:

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

(ii)   demand and time deposits in, certificates of deposit of, or bankers’ acceptances (which shall each have an original maturity of not more than 90 days and, in the case of bankers’ acceptances, shall in no event have an original maturity of more than 365 days or a remaining maturity of more than 30 days) denominated in United States dollars and issued by, any Depository Institution and rated F1+ by Fitch, A-1+ by Standard & Poor’s and P-1 by Moody’s;

(iii)   repurchase obligations with respect to any security described in clause (i) above entered into with a Depository Institution (acting as principal);

(iv)   securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any state thereof and that are rated by Fitch, Moody’s and Standard & Poor’s (in each case, to the extent they are designated as Rating Agencies in the Preliminary Statement), and by each other Rating Agency that rates such securities, in its highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment;

(v)   commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than 30 days after the date of acquisition thereof) that is rated by Fitch, Moody’s and Standard & Poor’s (in each case, to the extent they are designated as Rating Agencies in the Preliminary Statement), and by each other Rating Agency that rates such securities, in its highest short-term unsecured debt rating available at the time of such investment;

(vi)   units of money market funds, including money market funds managed by the Trustee, the Securities Administrator or an Affiliate thereof, that have been rated “Aaa” by Moody’s, “AAA” by Standard & Poor’s and, if rated by Fitch, “AAA” by Fitch; and

(vii)   if previously confirmed in writing to the Securities Administrator, any other demand, money market or time deposit, or any other obligation, security or investment, as may be acceptable to each of the Rating Agencies as a permitted investment of funds backing “Aaa” or “AAA” rated securities;

provided, however , that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120.00% of the yield to maturity at par of the underlying obligations.

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

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

Physical Certificates : As specified in the Preliminary Statement.

Pool Stated Principal Balance : As to any Distribution Date, the aggregate of the Stated Principal Balances of the Mortgage Loans for such Distribution Date that were Outstanding Mortgage Loans on the Due Date in the related Due Period.

Prepayment Charge : Any prepayment premium, penalty or charge collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in connection with any Principal Prepayment pursuant to the terms of the related Mortgage Note.

Prepayment Interest Shortfall : With respect to any Distribution Date, the sum of, for each Mortgage Loan that was, during the portion of the related Prepayment Period from the first day of such Prepayment Period through the last day of the month preceding the month in which such Distribution Date occurs, the subject of a Principal Prepayment which is not accompanied by an amount equal to one month of interest that would have been due on such Mortgage Loan on the Due Date that occurs during such Prepayment Period and which was applied by the Servicer to reduce the outstanding principal balance of such Mortgage Loan on a date preceding such Due Date, an amount equal to the product of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number of days commencing on the date on which such Principal Prepayment was applied and ending on the last day of the calendar month in which the related Prepayment Period begins.

Prepayment Period : With respect to any Distribution Date and any Principal Prepayments, the calendar month preceding the month in which such Distribution Date occurs.

Primary Mortgage Insurance Policy : Any mortgage guaranty insurance, if any, on an individual Mortgage Loan as evidenced by a policy or certificate, whether such policy is obtained by the originator, the lender or the borrower.

Principal Payment Amount : For any Distribution Date, the sum of (i) the Basic Principal Payment Amount for such Distribution Date and (ii) the Extra Principal Payment Amount for such Distribution Date.

Principal Prepayment : Any full or partial payment or other recovery of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan) that is received in advance of its scheduled Due Date, excluding any Prepayment Charge thereon, and that is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.

Principal Prepayment in Full : Any Principal Prepayment made by a Mortgagor of the entire principal balance of a Mortgage Loan.

Principal Remittance Amount : With respect to any Distribution Date, the amount equal to the sum of the following amounts (without duplication) with respect to the related Due Period: (i) each scheduled payment of principal on a Mortgage Loan due during such Due Period and received by the Servicer on or prior to the related Determination Date or advanced by the Servicer for the related Remittance Date, (ii) all Principal Prepayments received during the related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans allocable to principal, and all Subsequent Recoveries, actually collected by the Servicer during the related Prepayment Period; (iv) the portion of the Repurchase Price allocable to principal with respect to each Mortgage Loan repurchased by the Originator or the Sponsor, as the case may be, that was repurchased on or prior to the related Determination Date; (v) all Substitution Adjustment Amounts allocable to principal with respect to the substitutions of Mortgage Loans that occur on or prior to the related Determination Date; and (vi) the allocable portion of the proceeds received with respect to the termination of the Trust Fund pursuant to clause (a) of Section 11.01 (to the extent such proceeds relate to principal).

Private Certificates : As specified in the Preliminary Statement.

Private Placement Memorandum: The Private Placement Memorandum, dated February 5, 2007 relating to the offering of the Class M-7 Certificates.

Prospectus : The Prospectus, dated December 27, 2006, as supplemented by the Prospectus Supplement.

Prospectus Supplement : The Prospectus Supplement, dated February 5, 2007 relating to the Offered Certificates.

PTCE : As defined in Section 5.02(b).

Purchase Agreement : The Mortgage Loan Purchase Agreement, dated as of January 1, 2007, between the Depositor and the Sponsor.

Rating Agency : Each of the Rating Agencies specified in the Preliminary Statement. If such organization or a successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating organization, or other comparable Person, as is designated by the Depositor, notice of which designation shall be given to the Trustee and the Securities Administrator. References herein to a given rating or rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers. For purposes of Section 12.05, the addresses for notices to each Rating Agency shall be the address specified therefor in the definition corresponding to the name of such Rating Agency, or such other address as either such Rating Agency may hereafter furnish to the Depositor and the Securities Administrator.

Realized Losses : With respect to any date of determination and any Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal balance of such Liquidated Mortgage Loan together with accrued and unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net of the expenses incurred by the Servicer in connection with the liquidation of such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.

Record Date : With respect to any Distribution Date and any Certificate other than Certificate issued in definitive form, the close of business on the Business Day immediately preceding such Distribution Date; provided, however , that, for any Certificate issued in definitive form, the Record Date shall be the close of business on the last Business Day of the month preceding the month in which such applicable Distribution Date occurs (or, in the case of the first Distribution Date, the Closing Date).

Regulation S Investment Letter: As defined in Section 5.02(b).

Regular Certificates : As specified in the Preliminary Statement.

Relevant Servicing Criteria : The Servicing Criteria applicable to the parties having reporting obligations hereunder, as set forth on Exhibit S attached hereto. For clarification purposes, multiple parties can have responsibility for the same Relevant Servicing Criteria. With respect to any Servicing Function Participant engaged by the Master Servicer, the Securities Administrator, the Custodian or the Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria applicable to such parties.

Relief Act Interest Shortfall : With respect to any Distribution Date and any Mortgage Loan, any reduction in the amount of interest collectible on such Mortgage Loan for the most recently ended Due Period as a result of the application of the Servicemembers Civil Relief Act or any applicable similar state statutes.

REMIC : Each pool of assets in the Trust Fund designated as a REMIC pursuant to the Preliminary Statement.

REMIC 1 : As described in the Preliminary Statement.

REMIC 2 : As described in the Preliminary Statement.

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

Remittance Date : With respect to any Distribution Date, the 20 ^th day of the month in which such Distribution Date occurs, or, if the 20 ^th is not a Business Day, the immediately preceding Business Day.

REO Disposition : The final sale by the Servicer of any REO Property.

REO Imputed Interest : As to any REO Property, for any period, an amount equivalent to interest (at the Mortgage Rate net of the applicable Servicing Fee Rate that would have been applicable to the related Mortgage Loan had it been outstanding) on the unpaid principal balance of the Mortgage Loan as of the date of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by any income from the REO Property treated as a recovery of principal).

REO Mortgage Loan : A Mortgage Loan where title to the related Mortgaged Property has been obtained by the Servicer in the name of the Trustee on behalf of the Certificateholders.

REO Property : A Mortgaged Property acquired by the Trust Fund through foreclosure or deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan.

Reportable Event : As defined in Section 8.12(a)(iii)(A).

Reporting Servicer : As defined in Section 8.12(a)(ii)(A).

Repurchase Price : With respect to any Mortgage Loan, an amount equal to the sum of (i) the Stated Principal Balance of such Mortgage Loan as of the date of repurchase, (ii) interest on such unpaid principal balance of such Mortgage Loan at the Mortgage Rate, net, in the case of repurchase by the Originator only, of the Servicing Fee Rate, from the last date through which interest has been paid to the date of repurchase, (iii) all unreimbursed Servicing Advances, (iv) the amount of any costs and damages incurred by the Trust Fund as a result of any violation of any applicable federal, state or local predatory- or abusive-lending law arising from or in connection with the origination of such Mortgage Loan and (v) all expenses incurred by the Master Servicer, the Securities Administrator, the Servicer or Trustee arising out of the Master Servicer’s, the Servicer’s or Trustee’s enforcement of the Originator’s or Sponsor’s repurchase obligation hereunder.

Request for Release : The Request for Release submitted by the Servicer to the Trustee, substantially in the form of Exhibit J.

Residual Certificates : As specified in the Preliminary Statement.

Responsible Officer : When used with respect to the Trustee, the Securities Administrator or the Master Servicer, any vice president, any assistant vice president, any assistant secretary, any assistant treasurer, any associate, or any other officer of the Trustee, the Securities Administrator or the Master Servicer customarily performing functions similar to those performed by any of the above designated officers who at such time shall be officers to whom, with respect to a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with the particular subject and who, in each case, shall have direct responsibility for the administration of this Agreement.

Rolling Three Month Delinquency Rate : With respect to any Distribution Date, the average of the Delinquency Rates for each of the three (or one or two, in the case of the first and second Distribution Dates) immediately preceding calendar months.

Rule 144A Investment Letter : As defined in Section 5.02(b).

Sarbanes-Oxley Act : The Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any interpretations thereof by the Commission’s staff).

Sarbanes-Oxley Certification : A written certification signed by an officer of the Master Servicer that complies with (i) the Sarbanes-Oxley Act, and (ii) Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time; provided that if, after the Closing Date (a) the Sarbanes-Oxley Act is amended, (b) the Rules referred to in clause (ii) are modified or superseded by any subsequent statement, rule or regulation of the Commission or any statement of a division thereof, or (c) any future releases, rules and regulations are published by the Commission from time to time pursuant to the Sarbanes-Oxley Act, which in any such case affects the form or substance of the required certification and results in the required certification being, in the reasonable judgment of the Master Servicer, materially more onerous that then form of the required certification as of the Closing Date, the Sarbanes-Oxley Certification shall be as agreed to by the Master Servicer and the Depositor following a negotiation in good faith to determine how to comply with any such requirements.

Scheduled Payment : The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan which, unless otherwise specified herein, shall give effect to any related Debt Service Reduction and any Deficient Valuation that affects the amount of the monthly payment due on such Mortgage Loan.

Securities Act : The Securities Act of 1933, as amended and the rules and regulations thereunder.

Securities Administration Fee : As to any Distribution Date and each Mortgage Loan, an amount equal to 1/12 ^th the product of (a) the Securities Administration Fee Rate and (b) the outstanding Stated Principal Balance of such Mortgage Loan as of the prior Distribution Date (or as of the Cut-off Date in the case of the first Distribution Date).

Securities Administration Fee Rate : With respect to each Mortgage Loan, 0.005% per annum.

Securities Administrator : Citibank, and any successors in interest, and if a successor securities administrator is appointed hereunder, such successor.

Securities Administrator Float Period : With respect to the Distribution Date and the related amounts in the Distribution Account, the period commencing on the Master Servicer Remittance Date immediately preceding such Distribution Date and ending on such Distribution Date.

Seller’s Warranties and Servicing Agreement : The Seller’s Warranties and Servicing Agreement between the Sponsor, as purchaser of the Mortgage Loans, and Wells Fargo, as seller, dated as of November 1, 2006.

Senior Interest Payment Amount : With respect to any Distribution Date and any Class of Class A Certificates, the sum of the Interest Payment Amount and the Interest Carry Forward Amount, if any, for that Distribution Date for that Class.

Senior Principal Payment Amount : With respect to any Distribution Date, the lesser of (i) the Principal Payment Amount for that Distribution Date and (ii) the excess of (a) the aggregate Class Certificate Balance of the Class A Certificates immediately prior to that Distribution Date over (b) the lesser of (x) 67.50% of the aggregate Stated Principal Balance of the Mortgage Loans for that Distribution Date and (y) the excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period over 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

Servicer : Wells Fargo, and its successors in interest, and if a successor servicer is appointed hereunder, such successor.

Service(s)(ing) : In accordance with Regulation AB, the act of servicing and administering the Mortgage Loans or any other assets of the Trust Fund by an entity that meets the definition of “servicer’ set forth in Item 1101 of Regulation AB and is subject to the disclosure requirements set forth in Item 1108 of Regulation AB. For clarification purposes, any uncapitalized occurrence of this term in this Agreement shall have the meaning commonly understood by participants in the residential mortgage-backed securitization market.

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

Servicing Criteria : The criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such may be amended from time to time.

Servicing Fee : With respect to each Mortgage Loan and for any calendar month, an amount equal to one month’s interest (or in the event of any payment of interest which accompanies a Principal Prepayment made by the Mortgagor during such calendar month, interest for the number of days covered by such payment of interest) at the Servicing Fee Rate on the applicable Stated Principal Balance of such Mortgage Loan as of the first day of such calendar month. Such fee shall be payable monthly, and shall be prorated for any portion of a month during which the Mortgage Loan is serviced by the Servicer under this Agreement. The Servicing Fee is payable solely from the interest portion (including recoveries with respect to interest from Liquidation Proceeds, Subsequent Recoveries, Insurance Proceeds, Condemnation Proceeds and proceeds received with respect to REO Properties) of such Scheduled Payment collected by the Servicer, or as otherwise provided under Section 3.11.

Servicing Fee Rate : With respect to each Mortgage Loan, 0.375% per annum.

Servicing File : With respect to each Mortgage Loan, the file retained by the Servicer consisting of originals or copies of all documents in the Mortgage File which are not delivered to the Custodian on behalf of the Trustee in the Custodial File and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.

Servicing Function Participant: Any Subservicer or Subcontractor of the Servicer, the Master Servicer, the Custodian or the Securities Administrator, respectively, that is “participating in the servicing function” within the meaning of Item 1122 of Regulation AB.

Servicing Officer : Any officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans.

Similar Law : As defined in Section 5.02(b).

60+ Day Delinquent Mortgage Loan : Each Mortgage Loan with respect to which any portion of a Scheduled Payment is, as of the last day of the prior Due Period, two months or more past due (including any such Mortgage Loan in foreclosure, any such Mortgage Loan related to REO Property and any such Mortgage Loan where the related Mortgagor has filed for bankruptcy), without giving effect to any grace period.

Sponsor : HSBC Bank USA, National Association, a national banking association, and its successors in interest.

Standard & Poor’s : Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. If Standard & Poor’s is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 12.05 the address for notices to Standard & Poor’s shall be Standard & Poor’s, 55 Water Street, New York, New York 10041, Attention: Residential Mortgage Surveillance Group - HALO (HSI Asset Loan Obligation Trust, Series 2007-WF1), or such other address as Standard & Poor’s may hereafter furnish to the Depositor and the Securities Administrator.

Standard & Poor’s Glossary : The Standard & Poor’s LEVELS® Glossary, as may be in effect from time to time.

Startup Day : The Closing Date.

Stated Principal Balance : As to each Mortgage Loan and as of any date of determination, (i) the principal balance of the Mortgage Loan at the Cut-off Date after giving effect to payments of principal due on or before such date (whether or not received), minus (ii) all amounts previously remitted to the Securities Administrator with respect to the related Mortgage Loan representing payments or recoveries of principal including advances in respect of scheduled payments of principal. For purposes of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will give effect to any scheduled payments of principal received by the Servicer on or prior to the related Determination Date or advanced by the Servicer for the related Remittance Date and any unscheduled principal payments and other unscheduled principal collections received during the related Prepayment Period, and the Stated Principal Balance of any Mortgage Loan that has prepaid in full or has become a Liquidated Mortgage Loan during the related Prepayment Period shall be zero.

Stepdown Date : The earlier to occur of (i) the first Distribution Date following the Distribution Date on which the aggregate Class Certificate Balances of the Class A Certificates have been reduced to zero and (ii) the later to occur of (a) the Distribution Date in February 2010 and (b) the first Distribution Date on which the Credit Enhancement Percentage for the Class A Certificates (calculated for this purpose only after taking into account payments of principal applied to reduce the Stated Principal Balance of the Mortgage Loans for that Distribution Date but prior to any applications of Principal Payment Amount to the Certificates on that Distribution Date) is greater than or equal to 32.50%.

Subcontractor : Any vendor, subcontractor or other Person that is not responsible for the overall servicing of the Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of the Servicer (or a Subservicer of the Servicer), the Master Servicer, the Custodian or the Securities Administrator.

Subsequent Recovery : With respect to any Mortgage Loan or related Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise disposed of, all amounts received in respect of such Liquidated Mortgage Loan after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged Property is allocated to reduce the Class Certificate Balance of any Class of Class M Certificates. Any Subsequent Recovery that is received during a Prepayment Period will be included as part of the Principal Remittance Amount for the related Distribution Date.

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

Subservicing Account : As defined in Section 3.08.

Subservicing Agreement : As defined in Section 3.02(a).

Substitute Mortgage Loan : A Mortgage Loan substituted by the Originator or the Sponsor for a Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in a Request for Release, substantially in the form of Exhibit J, (i) have a Stated Principal Balance, after deduction of all Scheduled Payments due in the month of substitution, not in excess of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be accruing interest at a rate not lower than and not more than 1.00% higher than that of the Deleted Mortgage Loan; (iii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan; and (v) comply with each representation and warranty set forth in Section 2.03.

Substitution Adjustment Amount :  As defined in Section 2.03.

Supplemental Interest Trust : The corpus of a trust created pursuant to Section 4.06 of this Agreement and designated as the “Supplemental Interest Trust,” consisting of the Excess Reserve Fund Account, the Cap Agreement, the Cap Account, the Collateral Account and the right to receive the Class X Distributable Amount as provided in Section 4.02(a)(iii)(G).

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

Telerate Page 3750 : The display page currently so designated on the Bridge Telerate Service (or such other page as may replace that page on that service for displaying comparable rates or prices).

Termination Event : The occurrence of a termination event under the termination provision of the Cap Agreement.

Termination Price : As defined in Section 11.01.

Total Monthly Excess Spread : As to any Distribution Date, an amount equal to the excess, if any, of (i) the interest on the Mortgage Loans received by the Servicer on or prior to the related Determination Date or advanced by the Servicer for the related Remittance Date (net of Expense Fees) over (ii) the sum of the amounts payable to the Certificates pursuant to Section 4.02(a)(i)(A) through (B) on such Distribution Date.

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

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

Transferor Certificate : As defined in Section 5.02(b).

Trigger Event : Either a Cumulative Loss Trigger Event or a Delinquency Trigger Event.

Trust : The express trust created hereunder in Section 2.01(c).

Trust Fund : The corpus of the trust created hereunder consisting of (i) the Mortgage Loans and all interest and principal with respect thereto received on or after the related Cut-off Date, other than such amounts which were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the Collection Account, the Master Servicing Account, the Distribution Account, the Cap Termination Receipts Account, the Cap Replacement Receipts Account and all amounts deposited therein pursuant to the applicable provisions of this Agreement; (iii) property that secured a Mortgage Loan and has been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Depositor’s rights under the Purchase Agreement; (v) the Insurance Policies; and (vi) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing.

Trustee : Deutsche Bank National Trust Company, a national banking association, and its successors in interest and, if a successor trustee is appointed hereunder, such successor.

Underwriters’ Exemption : Any exemption listed under footnote 1 of, and amended by, Prohibited Transaction Exemption 96-84, 61 Fed. Reg. 58234 (1996), as amended by PTE 97-34, 62 Fed. Reg. 39021 (1997), PTE 2000-58, 65 Fed. Reg. 67765 (2000) and PTE 2002-41, 67 Fed. Reg. 54487 (2002), or any successor exemption.

Unpaid Realized Loss Amount : With respect to any Class of Class M Certificates and as to any Distribution Date, is the excess of (i) Applied Realized Loss Amounts with respect to such Class over (ii) the sum of (a) all distributions in reduction of such Applied Realized Loss Amounts on all previous Distribution Dates, and (b) the amount by which the Class Certificate Balance of such Class has been increased due to the distribution of any Subsequent Recoveries on all previous Distribution Dates. Any amounts distributed to a Class of Class M Certificates in respect of any Unpaid Realized Loss Amount will not be applied to reduce the Class Certificate Balance of such Class.

Upper Tier REMIC : As described in the Preliminary Statement.

Upper Tier REMIC Regular Interest : As described in the Preliminary Statement.

U.S. Person : (i) A citizen or resident of the United States; (ii) a corporation (or entity treated as a corporation for tax purposes) created or organized in the United States or under the laws of the United States or of any State thereof, including, for this purpose, the District of Columbia; (iii) a partnership (or entity treated as a partnership for tax purposes) organized in the United States or under the laws of the United States or of any State thereof, including, for this purpose, the District of Columbia (unless provided otherwise by future Treasury regulations); (iv) an estate whose income is includible in gross income for United States income tax purposes regardless of its source; or (v) a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. Persons have authority to control substantial decisions of the trust. Notwithstanding the last clause of the preceding sentence, to the extent provided in Treasury regulations, certain trusts in existence on August 20, 1996, and treated as U.S. Persons prior to such date, may elect to continue to be U.S. Persons.

Voting Rights : The portion of the voting rights of all of the Certificates which is allocated to any Certificate. As of any date of determination, 1.00% of all Voting Rights shall be allocated to each of the Class X, Class P and Class R Certificates, if any (such Voting Rights to be allocated among the holders of Certificates of each such Class in accordance with their respective Percentage Interests) and the remaining Voting Rights shall be allocated among Holders of the remaining Classes of Certificates in proportion to the Certificate Balances of their respective Certificates on such date.

Wells Fargo : Wells Fargo Bank, N.A., a national banking association, and its successors in interest.

Section 2.01   Conveyance of Mortgage Loans . (a) The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund including all interest and principal received on or with respect to the Mortgage Loans on or after the Cut-off Date (other than Scheduled Payments due on the Mortgage Loans on or before the Cut-off Date).

Concurrently with the execution of this Agreement, the Cap Agreement shall be delivered to the Securities Administrator. In connection therewith, the Depositor hereby directs the Securities Administrator (solely in its capacity as trustee of the Supplemental Interest Trust) and the Securities Administrator is hereby authorized to execute and deliver each of the Cap Agreement on behalf of the Supplemental Interest Trust, for the benefit of Certificateholders. The Depositor, the Sponsor, the Master Servicer, the Servicer, the Originator, the Credit Risk Manager and the Certificateholders (by their acceptance of such Certificates) acknowledge and agree that the Securities Administrator is executing and delivering the Cap Agreement solely in its capacity as trustee of the Supplemental Interest Trust and not in its individual capacity. The Securities Administrator shall have no duty or responsibility to enter into any other interest rate cap agreement upon the termination of the Cap Agreement unless so directed by the Depositor.

Concurrently with the execution and delivery of this Agreement, the Depositor does hereby assign to the Trustee all of its rights and interest under the Purchase Agreement, including the right to enforce the Sponsor’s obligation to repurchase or substitute defective Mortgage Loans under Section 4 of the Purchase Agreement. The Trustee hereby accepts such assignment, and as set forth herein in Section 2.03(k), shall be entitled to exercise all the rights of the Depositor under the Purchase Agreement as if, for such purpose, it were the Depositor.

(b)   In connection with the transfer and assignment of each Mortgage Loan, the Depositor has delivered or caused to be delivered to the Custodian for the benefit of the Certificateholders the following documents or instruments with respect to each Mortgage Loan so assigned:

(i)   the original Mortgage Note bearing all intervening endorsements necessary to show a complete chain of endorsements from the original payee, endorsed in blank, “Pay to the order of _____________, without recourse”, and, if previously endorsed, signed in the name of the last endorsee by a duly qualified officer of the last endorsee;

(ii)   the original Assignment of Mortgage for each Mortgage Loan, in form and substance acceptable for recording. The Mortgage shall be assigned, with assignee’s name left blank;

(iii)   the original of each guarantee executed in connection with the Mortgage Note, if any;

(iv)   the original recorded Mortgage, with evidence of recording thereon. If in connection with any Mortgage Loan, the original Mortgage cannot be delivered with evidence of recording thereon on or prior to the Closing Date because of a delay caused by the public recording office where such Mortgage has been delivered for recordation or because such Mortgage has been lost or because such public recording office retains the original recorded Mortgage, the Originator shall deliver or cause to be delivered to the Custodian, (A) in the case of a delay caused by the public recording office, a copy of such Mortgage certified by the Originator, escrow agent, title insurer or closing attorney to be a true and complete copy of the original recorded Mortgage and (B) in the case where a public recording office retains the original recorded Mortgage or in the case where a Mortgage is lost after recordation in a public recording office, a copy of such Mortgage certified by such public recording office to be a true and complete copy of the original recorded Mortgage;

(v)   originals or a certified copy of each modification agreement, if any;

(vi)   the originals of all intervening assignments of Mortgage with evidence of recording thereon evidencing a complete chain of ownership from the originator of the Mortgage Loan to the last assignee, or if any such intervening assignment of Mortgage has not been returned from the applicable public recording office or has been lost or if such public recording office retains the original recorded intervening assignments of Mortgage, a photocopy of such intervening assignment of Mortgage, together with (A) in the case of a delay caused by the public recording office, an officer’s certificate of the Originator, escrow agent, closing attorney or the title insurer insuring the Mortgage stating that such intervening assignment of Mortgage has been delivered to the appropriate public recording office for recordation and that such original recorded intervening assignment of Mortgage or a copy of such intervening assignment of Mortgage certified by the appropriate public recording office to be a true and complete copy of the original recorded intervening assignment of Mortgage will be promptly delivered to the Custodian upon receipt thereof by the party delivering the officer’s certificate or by the Originator; or (B) in the case of an intervening assignment of mortgage where a public recording office retains the original recorded intervening assignment of Mortgage or in the case where an intervening assignment of Mortgage is lost after recordation in a public recording office, a copy of such intervening assignment of Mortgage with recording information thereon certified by such public recording office to be a true and complete copy of the original recorded intervening assignment of Mortgage;

(vii)   if the Mortgage Note, the Mortgage, any Assignment of Mortgage or any other related document has been signed by a Person on behalf of the Mortgagor, the copy of the power of attorney or other instrument that authorized and empowered such Person to sign;

(viii)   the original lender’s title insurance policy (or a marked title insurance commitment, in the event that an original lender’s title insurance policy has not yet been issued) in the form of an ALTA mortgage title insurance policy, containing all required endorsements and insuring the Trustee and its successors and assigns as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan;

(ix)   if applicable, the original of any Primary Mortgage Insurance Policy or certificate or, an electronic certification, evidencing the existence of the Primary Mortgage Insurance Policy or certificate, if private mortgage guaranty insurance is required; and

(x)   original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage, if any.

To the extent not previously delivered to the Sponsor pursuant to the Seller’s Warranties and Servicing Agreement, the Originator shall promptly upon receipt from the respective recording office cause to be delivered to the Custodian the original recorded document described in clauses (iv) and (vi) above.

From time to time, the Originator, the Depositor or the Servicer, as applicable, shall forward to the Custodian additional original documents, additional documents evidencing an assumption, modification, consolidation or extension of a Mortgage Loan, in accordance with the terms of this Agreement upon receipt of such documents. All such mortgage documents held by the Custodian as to each Mortgage Loan shall constitute the “ Custodial File ”.

To the extent not previously delivered to the Sponsor pursuant to the Seller’s Warranties and Servicing Agreement, on or prior to the Closing Date, the Originator shall deliver to the Custodian Assignments of Mortgages, in blank, for each Mortgage Loan. No later than thirty (30) Business Days following the later of the Closing Date and the date of receipt by the Servicer of the complete recording information for a Mortgage, the Servicer shall promptly submit or cause to be submitted for recording, at the expense of the Originator and at no expense to the Trust Fund, the Trustee, the Servicer or the Depositor, in the appropriate public office for real property records, each Assignment of Mortgage referred to in Section 2.01(b)(ii). Notwithstanding the foregoing, however, for administrative convenience and facilitation of servicing and to reduce closing costs, the Assignments of Mortgage shall not be required to be completed and submitted for recording with respect to any Mortgage Loan if the Trustee and each Rating Agency have received an Opinion of Counsel from the Depositor, satisfactory in form and substance to the Trustee and each Rating Agency to the effect that the recordation of such Assignments of Mortgage in any specific jurisdiction is not necessary to protect the Trust Fund’s interest in the related Mortgage Note. If the Assignment of Mortgage is to be recorded, the Mortgage shall be assigned by the Originator, at the expense of the Originator, to “Deutsche Bank National Trust Company, as trustee under the Pooling and Servicing Agreement dated as of January 1, 2007, for HSI Asset Loan Obligation Trust 2007-WF1”. In the event that any such Assignment of Mortgage is lost or returned unrecorded because of a defect therein, the Originator shall promptly cause to be delivered a substitute Assignment of Mortgage to cure such defect and thereafter cause each such assignment to be duly recorded at no expense to the Trust Fund.

In the event that such original or copy of any document submitted for recordation to the appropriate public recording office is not so delivered to the Custodian within 180 days (or such other time period as may be required by any Rating Agency) following the Closing Date, and in the event that the Originator does not cure such failure within 30 days of discovery or receipt of written notification of such failure from the Depositor, the related Mortgage Loan shall, upon the request of the Depositor, be repurchased by the Originator at the price and in the manner specified in Section 2.03. The foregoing repurchase obligation shall not apply in the event that the Originator cannot deliver such original or copy of any document submitted for recordation to the appropriate public recording office within the specified period due to a delay caused by the recording office in the applicable jurisdiction; provided , that the Originator shall instead deliver a recording receipt of such recording office or, if such recording receipt is not available, an officer’s certificate of an officer of the Originator, confirming that such document has been accepted for recording.

Notwithstanding anything to the contrary contained in this Section 2.01, in those instances where the public recording office retains or loses the original Mortgage or assignment after it has been recorded, the obligations of the Originator shall be deemed to have been satisfied upon delivery by the Originator to the Custodian, prior to the Closing Date of a copy of such Mortgage or assignment, as the case may be, certified (such certification to be an original thereof) by the public recording office to be a true and complete copy of the recorded original thereof.

(c)   The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust (the “ Trust ”) to be known, for convenience, as “HSI Asset Loan Obligation Trust 2007-WF1” and Deutsche Bank National Trust Company is hereby appointed as Trustee and Citibank is appointed as Securities Administrator in accordance with the provisions of this Agreement. The parties hereto acknowledge and agree that it is the policy and intention of the Trust to acquire only Mortgage Loans meeting the requirements set forth in this Agreement, including without limitation, the representations and warranties set forth in the Schedules hereto.

(d)   The Trust shall have the capacity, power and authority, and the Trustee on behalf of the Trust is hereby authorized, to accept the sale, transfer, assignment, set over and conveyance by the Depositor to the Trust of all the right, title and interest of the Depositor in and to the Trust Fund (including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).

Section 2.02   Acceptance by the Custodian of the Mortgage Loans . The Custodian shall acknowledge, on the Closing Date, receipt by the Custodian of the documents identified in the Initial Certification in the form annexed hereto as Exhibit E (“ Initial Certification ”), and declares that it holds and will hold such documents and the other documents delivered to it pursuant to Section 2.01, and that it holds or will hold such other assets as are included in the Trust Fund, in trust for the exclusive use and benefit of all present and future Certificateholders. The Custodian shall maintain possession of the related Mortgage Notes in the States of Minnesota, California, and Utah unless otherwise permitted by the Rating Agencies.

In connection with the Closing Date, the Custodian shall be required to deliver via facsimile (with original to follow the next Business Day) to the Depositor, the Securities Administrator and the Trustee, an Initial Certification prior to the Closing Date, or, as the Depositor agrees on the Closing Date, certifying receipt of a Mortgage Note and Assignment of Mortgage for each Mortgage Loan. The Custodian shall not be responsible to verify the validity, sufficiency or genuineness of any document in any Custodian File.

Within 90 days of the Closing Date, the Custodian shall ascertain that all documents identified in the Document Certification and Exception Report in the form attached hereto as Exhibit F are in its possession, and shall deliver to the Depositor, the Securities Administrator, the Trustee and the Servicer, a Document Certification and Exception Report, in the form annexed hereto as Exhibit F, to the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in such certification as an exception and not covered by such certification): (i) all documents identified in the Document Certification and Exception Report and required to be reviewed by it are in its possession; (ii) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan; (iii) based on its examination and only as to the foregoing documents, the information set forth in items (1), (2), (3), (15), (18) and (22) of the Data Tape Information respecting such Mortgage Loan is correct; and (iv) each Mortgage Note has been endorsed as provided in Section 2.01 of this Agreement. Neither the Trustee nor the Custodian shall be responsible to verify the validity, sufficiency or genuineness of any document in any Custodial File.

The Custodian shall retain possession and custody of each Custodial File in accordance with and subject to the terms and conditions set forth herein. The Servicer shall promptly deliver to the Custodian, upon the execution or receipt thereof, the originals of such other documents or instruments constituting the Custodial File as come into the possession of the Servicer from time to time.

Section 2.03   Representations, Warranties and Covenants of the Originator and the Servicer; Remedies for Breaches of Representations and Warranties with Respect to the Mortgage Loans . (a) Wells Fargo, in its capacity as Servicer makes the representations and warranties set forth in Section 3.01 of Exhibit Q hereto, to the Depositor, the Master Servicer, the Securities Administrator and the Trustee as of the Closing Date.

(b)   Wells Fargo, in its capacity as Originator, makes the representations and warranties set forth in (1) Section 3.01 of Exhibit Q hereto as of the Closing Date and (2) Section 3.02 of Exhibit Q hereto as of the Initial Sale Date, to the Depositor, the Master Servicer, the Securities Administrator and the Trustee as of the date specified therein.

(c)   It is understood and agreed by the Servicer and the Originator that the representations and warranties set forth in this Section 2.03 shall survive the transfer of the Mortgage Loans by the Depositor to the Trustee on the Closing Date, and shall inure to the benefit of the Depositor, the Trustee and the Trust Fund notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination or failure to examine any Mortgage File. Upon discovery by the Originator, the Depositor, the Securities Administrator, the Trustee, the Master Servicer or the Servicer of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the others.

(d)   Within 30 days of the earlier of either discovery by or notice to the Originator that any Mortgage Loan does not conform to the requirements as determined in the Custodian’s review of the related Custodial File or within 60 days of the earlier of either discovery by or notice to the Originator of any breach of a representation or warranty referred to in Section 2.03(b) that materially and adversely affects the value of any Mortgage Loan or the interest of the Trustee or the Certificateholders therein, the Originator shall use its best efforts to cause to be remedied a material defect in a document constituting part of a Mortgage File or promptly to cure such breach in all material respects and, if such defect or breach cannot be remedied, the Originator shall, at the Depositor’s option as specified in writing and provided to the Originator and the Trustee, (i) if such 30- or 60-day period, as applicable, expires prior to the second anniversary of the Closing Date, remove such Mortgage Loan (a “ Deleted Mortgage Loan ”) from the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the manner and subject to the conditions set forth in this Section 2.03; or (ii) repurchase such Mortgage Loan at the Repurchase Price; provided, however , that any such substitution pursuant to clause (i) above shall not be effected prior to the delivery to the Custodian of a Request for Release substantially in the form of Exhibit J, and the delivery of the Mortgage File to the Custodian for any such Substitute Mortgage Loan. Notwithstanding the foregoing, a breach (i) which causes a Mortgage Loan not to constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code or (ii) of any of the representations and warranties set forth in items (i), (oo), (qq), (ss), (vv) and (yy) of Section 3.02 of Exhibit Q hereto with respect to any Mortgage Loan will be deemed automatically to materially and adversely affect the value of such Mortgage Loan and the interests of the Trustee and Certificateholders in such Mortgage Loan, thus requiring the repurchase or substitution of such Mortgage Loan by the Originator. In the event that a Responsible Officer of the Trustee receives notice of a breach by the Originator of any of the representations and warranties described in the immediately preceding sentence, the Trustee shall give notice of such breach to the Originator and request the Originator to substitute such Mortgage Loan or to repurchase such Mortgage Loan at the Repurchase Price within sixty (60) days of the receipt of such notice. The Originator shall repurchase each such Mortgage Loan within 60 days of the earlier of discovery or receipt of notice with respect to each such Mortgage Loan.

(e)   With respect to any Substitute Mortgage Loan or Loans, the Originator shall deliver to the Custodian for the benefit of the Certificateholders the Mortgage Note, the Mortgage, the related assignment of the Mortgage, and such other documents and agreements as are required by Section 2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by Section 2.01. No substitution is permitted to be made with respect to any Distribution Date after the end of the related Prepayment Period. Scheduled Payments due with respect to Substitute Mortgage Loans in the Due Period of substitution shall not be part of the Trust Fund and will be retained by the Originator on the next succeeding Distribution Date. For the Due Period of substitution, distributions to Certificateholders will include the Scheduled Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the Originator shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan.

(f)   Upon removal of such Deleted Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans, the Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Originator shall be deemed to have made with respect to such Substitute Mortgage Loan or Loans, as of the date of substitution, the representations and warranties made pursuant to Section 2.03(b) with respect to such Mortgage Loan. Upon any such substitution and the deposit to the Collection Account of the amount required to be deposited therein in connection with such substitution as described in the following paragraph, the Custodian shall release the Mortgage File held for the benefit of the Certificateholders relating to such Deleted Mortgage Loan to the Originator and the Trustee, upon receipt of a Request for Release certifying that all amounts required to be deposited in accordance with this Section 2.03(f) have been deposited in the Collection Account, shall execute and deliver at the Originator’s direction such instruments of transfer or assignment prepared by the Originator in each case without recourse, as shall be necessary to vest title in the Originator of the Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.

(g)   For any month in which the Originator substitutes one or more Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will determine the amount (if any) by which the aggregate unpaid principal balance of all such Substitute Mortgage Loans as of the date of substitution is less than the aggregate unpaid principal balance of all such Deleted Mortgage Loans. The amount of such shortage plus an amount equal to the aggregate of any unreimbursed Advances with respect to such Deleted Mortgage Loans (collectively, the “ Substitution Adjustment Amount ”) shall be remitted by the Originator to the Servicer for deposit into the Collection Account on or before the Remittance Date for the Distribution Date in the month succeeding the calendar month during which the related Mortgage Loan became required to be purchased or replaced hereunder.

(h)   In addition to the repurchase or substitution obligations referred to in Section 2.03(d) above and Section 2.03(k) below, the Originator or the Sponsor, as applicable, shall indemnify the Depositor, any of its Affiliates, the Master Servicer, the Servicer, the Securities Administrator, the Trustee and the Trust and hold such parties harmless against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses (including, without limitation, any taxes payable by the Trust) resulting from any third party claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach by the Originator or the Sponsor, as applicable, of any of its representations and warranties or obligations contained in this Agreement.

(i)   The Servicer shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the removal of such Deleted Mortgage Loan and the substitution of the Substitute Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee, the Custodian, the Master Servicer and the Securities Administrator.

(j)   In the event that a Mortgage Loan shall have been repurchased pursuant to this Agreement or the Purchase Agreement, the proceeds from such repurchase shall be deposited by the Servicer in the Collection Account pursuant to Section 3.10 on or before the Remittance Date for the Distribution Date in the month following the month during which the Originator or Sponsor became obligated to repurchase or replace such Mortgage Loan and upon such deposit of the Repurchase Price, and receipt of a Request for Release in the form of Exhibit J hereto, the Custodian shall release the related Custodial File held for the benefit of the Certificateholders to the Originator or the Sponsor, as applicable, as directed by the Servicer, and the Trustee shall execute and deliver at such Person’s direction such instruments of transfer or assignment prepared by such Person, in each case without recourse, as shall be necessary to transfer title from the Trustee. In accordance with Section 12.05(a), if a Responsible Officer of the Securities Administrator has actual knowledge of a purchase of a Mortgage Loan pursuant to this Section 2.03, the Securities Administrator shall promptly notify each Rating Agency of a purchase of a Mortgage Loan pursuant to this Section 2.03.

It is understood and agreed that the obligation of the Originator under this Agreement to cure, repurchase or substitute any Mortgage Loan as to which a breach of a representation and warranty has occurred and is continuing, together with any related indemnification obligations of the Originator set forth in Section 2.03(h), shall constitute the sole remedies against such Person respecting such breach available to Certificateholders, the Depositor and any of its Affiliates, or the Trustee on their behalf.

(k)   The Trustee acknowledges that, except as provided in Section 5 of the Purchase Agreement, the Sponsor shall not have any obligation or liability with respect to any breach of a representation or warranty made by it with respect to a Mortgage Loan sold by it, provided that such representation or warranty was also made by the Originator with respect to the related Mortgage Loan. It is understood and agreed that the representations and warranties of the Sponsor set forth in Section 4 of the Purchase Agreement and assigned to the Trustee by the Depositor hereunder shall survive the transfer of the Mortgage Loans by the Depositor to the Trustee on the Closing Date, and shall inure to the benefit of the Trustee and the Certificateholders notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage and shall continue throughout the term of this Agreement. Upon the discovery by any of the Sponsor, the Depositor, the Securities Administrator, the Trustee, the Master Servicer or the Servicer of a breach of any of the Sponsor’s representations and warranties set forth in Section 4 of the Purchase Agreement, the party discovering the breach shall give prompt written notice to the others. Within 30 days of the earlier of either discovery by or notice to the Sponsor of any breach of any of the foregoing representations or warranties that materially and adversely affects the value of any Mortgage Loan or the interest of the Trustee or the Certificateholders therein, the Sponsor shall use its best efforts to cure such breach in all material respects and, if such defect or breach cannot be remedied, the Sponsor shall, at the Depositor’s instructions as specified in writing and provided to the Sponsor and the Trustee, (i) if such 30-day period expires prior to the second anniversary of the Closing Date, remove such Mortgage Loan from the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the same manner and subject to the same conditions set forth in this Section 2.03 that apply to repurchases or substitutions of Mortgage Loans by the Originator or (ii) repurchase such Mortgage Loan at the Repurchase Price; provided, however , that any such substitution pursuant to clause (i) above shall not be effected prior to the delivery to the Custodian of a Request for Release substantially in the form of Exhibit J, and the delivery of the Mortgage File to the Custodian for any such Substitute Mortgage Loan. In the event of any such repurchase or substitution of a Mortgage Loan by the Sponsor, the procedures set forth in Sections 2.03(e), (f), (g), (h), (i) and (j) shall apply to the Sponsor in the same manner and to the same extent that they are applicable to the Originator. It is understood and agreed that the obligations of the Sponsor under this Agreement to cure, repurchase or substitute any Mortgage Loan as to which a breach of a representation and warranty has occurred and is continuing, together with any related indemnification obligations of the Sponsor set forth in Section 2.03(h), shall constitute the sole remedies against the Sponsor available to the Certificateholders, the Depositor and any of its affiliates, or the Trustee on their behalf.

The provisions of this Section 2.03 shall survive delivery of the respective Custodial Files to the Custodian for the benefit of the Certificateholders.

Section 2.04   Execution and Delivery of Certificates . The Trustee acknowledges the transfer and assignment to it of the Trust Fund and, concurrently with such transfer and assignment, the Securities Administrator has executed and delivered to, or upon the order of the Depositor, the Certificates in authorized denominations evidencing directly or indirectly the entire ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights referred to above for the benefit of all present and future Holders of the Certificates.

Section 2.05   REMIC Matters . The Preliminary Statement sets forth the designations for federal income tax purposes of all interests created hereby.  The “ Startup Day ” for purposes of the REMIC Provisions shall be the Closing Date.  The “ latest possible maturity date ” is the Distribution Date occurring three years after the month in which the latest Mortgage Loan maturity date (of the Mortgage Loans held in the Trust on the Closing Date) occurs.

Section 2.06   Representations and Warranties of the Depositor . The Depositor hereby represents, warrants and covenants to the other parties to this agreement that as of the date of this Agreement or as of such date specifically provided herein:

(a)   The Depositor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware;

(b)   The Depositor has the power and authority to convey the Mortgage Loans and to execute, deliver and perform, and to enter into and consummate transactions contemplated by, this Agreement;

(c)   This Agreement has been duly and validly authorized, executed and delivered by the Depositor, all requisite company action having been taken, and, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Depositor, enforceable against the Depositor in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law);

(d)   No consent, approval, authorization or order of, or registration or filing with, or notice to, any governmental authority or court is required for the execution, delivery and performance of or compliance by the Depositor with this Agreement or the consummation by the Depositor of any of the transactions contemplated hereby, except as have been received or obtained on or prior to the Closing Date;

(e)   None of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or thereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, (i) conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default or results or will result in an acceleration under (A) the charter or bylaws of the Depositor, or (B) of any term, condition or provision of any material indenture, deed of trust, contract or other agreement or instrument to which the Depositor or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii) results or will result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Depositor of any court or governmental authority having jurisdiction over the Depositor or its subsidiaries; or (iii) results in the creation or imposition of any lien, charge or encumbrance which would have a material adverse effect upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans;

(f)   There are no actions, suits or proceedings before or against or investigations of, the Depositor pending, or to the knowledge of the Depositor, threatened, before any court, administrative agency or other tribunal, and no notice of any such action, which, in the Depositor’s reasonable judgment, might materially and adversely affect the performance by the Depositor of its obligations under this Agreement, or the validity or enforceability of this Agreement;

(g)   The Depositor is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency that would materially and adversely affect its performance hereunder; and

(h)   Immediately prior to the transfer and assignment by the Depositor to the Trustee on the Closing Date, the Depositor had good title to, and was the sole owner of each Mortgage Loan, free of any interest of any other Person, and the Depositor has transferred all right, title and interest in each Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage as and in the manner contemplated by this Agreement is sufficient either (i) fully to transfer to the Trustee, for the benefit of the Certificateholders, all right, title, and interest of the Depositor thereto as note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the security interest referred to in Section 12.04.

It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.06 shall survive delivery of the respective Mortgage Files to the Custodian and shall inure to the benefit of the Trustee.

Section 3.01   Servicer to Service Mortgage Loans . (a)  For and on behalf of the Certificateholders, the Servicer shall service and administer the Mortgage Loans in accordance with the terms of this Agreement and the respective Mortgage Loans and, to the extent consistent with such terms, in accordance with Accepted Servicing Practices, but without regard to:

(i)   any relationship that the Servicer, any Subservicer or any Affiliate of the Servicer or any Subservicer may have with the related Mortgagor;

(ii)   the ownership or non-ownership of any Certificate by the Servicer or any Affiliate of the Servicer;

(iii)   the Servicer’s obligation to make P&I Advances or Servicing Advances; or

(iv)   the Servicer’s or any Subservicer’s right to receive compensation for its services hereunder or with respect to any particular transaction.

To the extent consistent with the foregoing, the Servicer shall seek to maximize the timely and complete recovery of principal and interest on the Mortgage Notes. Subject only to the above-described servicing standards and the terms of this Agreement and of the respective Mortgage Loans, the Servicer shall have full power and authority, acting alone or through Subservicers as provided in Section 3.02, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer in its own name or in the name of a Subservicer is authorized and empowered by the Trustee pursuant to a limited power of attorney in the form attached hereto as Exhibit N when the Servicer believes it appropriate in its best judgment in accordance with Accepted Servicing Practices to execute and deliver any and all instruments of satisfaction or cancellation, or of partial or full release or discharge, and all other comparable instruments, with respect to the Mortgage Loans and the Mortgaged Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert the ownership of such properties, and to hold or cause to be held title to such properties, on behalf of the Trustee; provided, further , that upon the full release and discharge, the Servicer shall notify the Custodian of the Mortgage Loan of any such full release or discharge with respect to the Mortgage Loan and related Mortgage Properties. The Servicer shall at its own expense be responsible for preparing and recording all lien releases and mortgage satisfactions in accordance with state and local regulations. The Servicer shall service and administer the Mortgage Loans in accordance with applicable state and federal law and shall provide to the Mortgagors any reports required to be provided to them thereby. The Servicer shall also comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any standard hazard insurance policy or any Primary Mortgage Insurance Policy (if applicable). Subject to Section 3.16, the Trustee shall execute, at the written request of the Servicer, and furnish to the Servicer and any Subservicer such documents provided to the Trustee as are necessary or appropriate to enable the Servicer or any Subservicer to carry out their servicing and administrative duties hereunder, and the Trustee shall grant to the Servicer a limited power of attorney in the form attached hereto as Exhibit N to carry out such duties and to take title to Mortgaged Properties after foreclosure on behalf of the Trustee. The Trustee shall have the right to execute any additional separate powers of attorney in favor of the Servicer, to the extent necessary or desirable to enable the Servicer to perform its duties hereunder. The Trustee shall not be liable for the actions of the Servicer or any Subservicers under such powers of attorney. Notwithstanding anything contained herein to the contrary, no Servicer or Subservicer shall without the Trustee’s consent: (i) initiate any action, suit or proceeding solely under the Trustee’s name without indicating the Servicer’s or Subservicer’s, as applicable, representative capacity, or (ii) knowingly take any action with the intent to, or which actually does cause, the Trustee to be registered to do business in any state.

(b)   Subject to Section 3.09, in accordance with the standards of the preceding paragraph, the Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the timely payment of taxes and assessments on the Mortgaged Properties, which advances shall be Servicing Advances reimbursable in the first instance from the collection from the Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11. Any cost incurred by the Servicer or by Subservicers in effecting the timely payment of taxes and assessments on a Mortgaged Property shall not be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

(c)   Notwithstanding anything in this Agreement to the contrary, the Servicer may not make any future advances with respect to a Mortgage Loan (except as provided in Section 4.01) and the Servicer shall not, except as provided in 3.07(a), (i) permit any modification with respect to any Mortgage Loan that would change the Mortgage Rate, reduce or increase the principal balance (except for reductions resulting from actual payments of principal) or change the final maturity date on such Mortgage Loan (except for a reduction of interest payments resulting from the application of the Servicemembers Civil Relief Act or any similar state statutes) or (ii) permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (A) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed Treasury regulations promulgated thereunder) and (B) cause any REMIC formed hereby to fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or “contributions after the startup day” under the REMIC Provisions or (iii) waive any Prepayment Charges.

(d)   The Servicer may delegate its responsibilities under this Agreement; provided, however , that no such delegation shall release the Servicer from the responsibilities or liabilities arising under this Agreement.

Section 3.02   Subservicing Agreements between Servicer and Subservicers; Use of Subcontractors . (a) The Servicer may enter into a subservicing agreement with a Subservicer, for the servicing and administration of the Mortgage Loans (“ Subservicing Agreement ”) without obtaining the prior consent of the Trustee, the Depositor, the Master Servicer, the Securities Administrator or other parties hereto to the utilization of any such Subservicer, provided the provisions of such Subservicing Agreement comply with the requirements set forth in this Section 3.02. None of the Trustee, the Securities Administrator, the Master Servicer or the Depositor shall be required to review or consent to such Subservicing Agreement and none shall have any liability in connection therewith.

(b)   Each Subservicer shall be (i) authorized to transact business in the state or states in which the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law to enable the Subservicer to perform its obligations hereunder and under the Subservicing Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each Subservicing Agreement must impose on the Subservicer requirements conforming to the provisions set forth in Sections 3.08, 3.22, 3.23, 3.24, 3.29, 6.05, 6.06, 7.01(i), 8.12 and Exhibit S of this Agreement to the same extent as if such Subservicer were the Servicer and otherwise provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Servicer shall examine each Subservicing Agreement and will be familiar with the terms thereof in order to determine that the foregoing requirements have been incorporated into the Subservicing Agreement and that the terms thereof are not otherwise inconsistent with any of the provisions of this Agreement. The Servicer and the Subservicers may enter into and make amendments to the Subservicing Agreements or enter into different forms of Subservicing Agreements; provided, however , that any such amendments or different forms shall be consistent with and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which could be reasonably expected to have a materially adverse effect on the interests of the Trustee, the Depositor, the Master Servicer or the Securities Administrator without their prior written consent. Any variation without the consent of the Trustee, the Depositor, the Securities Administrator and the Master Servicer from the requirements set forth in Sections 3.08, 3.22, 3.23, 3.24, 3.29, 6.05, 6.06, 7.01(i), 8.12 and Exhibit S, are conclusively deemed to be inconsistent with this Agreement and therefore prohibited. The Servicer shall deliver to the Master Servicer, the Securities Administrator, the Trustee and the Depositor copies of all Subservicing Agreements, and any amendments or modifications thereof, promptly upon the Servicer’s execution and delivery of such instruments.

(c)   As part of its servicing activities hereunder, the Servicer (except as otherwise provided in the last sentence of this paragraph) shall enforce the obligations of each Subservicer under the related Subservicing Agreement, including, without limitation, (i) any obligation to make advances in respect of delinquent payments as required by a Subservicing Agreement and (ii) the reporting obligations set forth under Section 3.22, 3.23, 3.24 and 3.29 hereof to the same extent as if such Subservicer were the Servicer. The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Master Servicer, the Securities Administrator and the Depositor (i) any servicer annual compliance statement required to be delivered by such Subservicer under Section 3.24(b); (ii) any report on assessments and attestations of compliance with Relevant Servicing Criteria required to be delivered by the Subservicer pursuant to Sections 3.22 and 3.23; and (iii) any certifications required to be delivered under Section 3.24(a) to the Master Servicer or such other Person that will be responsible for signing the Sarbanes-Oxley Certification as and where required to be delivered hereunder. Such enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing Agreements, and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Servicer shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement, to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans or (ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed.

(d)   It shall not be necessary for the Servicer to seek the consent of the Depositor, the Trustee, the Master Servicer, the Securities Administrator or other parties hereto to the utilization of a Subcontractor. The Servicer shall give prompt written notice to the Master Servicer, the Securities Administrator and the Depositor of the appointment of any Servicing Function Participant and provide a written description (in form and substance satisfactory to the Depositor) of the role and function of each Servicing Function Participant specifying which elements of the Servicing Criteria set forth under Item 1122(d) of Regulation AB will be addressed in assessments and attestations of compliance with Relevant Servicing Criteria provided by such Servicing Function Participant.

(e)   As a condition to the utilization of any Subcontractor determined to be a Servicing Function Participant, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) to comply with the provisions of Sections 3.22, 3.23, 3.24, 3.29, 6.05, 6.06, 7.01(i), 8.12 and Exhibit S of this Agreement to the same extent as if such Subcontractor were the Servicer. The Servicer shall be responsible for obtaining from each Subcontractor and delivering to the Securities Administrator, the Master Servicer and the Depositor any assessments and attestations of compliance required to be delivered by such Subcontractor pursuant to Sections 3.22 and 3.23, in each case as and when required to be delivered.

Section 3.03   Successor Subservicers . The Servicer shall be entitled to terminate any Subservicing Agreement and the rights and obligations of any Subservicer pursuant to any Subservicing Agreement in accordance with the terms and conditions of such Subservicing Agreement. In the event of termination of any Subservicer, all servicing obligations of such Subservicer shall be assumed simultaneously by the Servicer without any act or deed on the part of such Subservicer or Servicer, and the Servicer either shall service directly the related Mortgage Loans or shall enter into a Subservicing Agreement with a successor subservicer which qualifies under Section 3.02.

Any Subservicing Agreement shall include the provision that such agreement may be immediately terminated by the Master Servicer without fee, in accordance with the terms of this Agreement, in the event that the Servicer shall, for any reason, no longer be the Servicer (including termination due to an Event of Default).

Section 3.04   Liability of the Servicer . Notwithstanding any subservicing agreement or the provisions of this Agreement relating to agreements or arrangements between the Servicer and a Subservicer, Subcontractor or other third party or reference to actions taken through a Subservicer, a Subcontractor, another third party or otherwise, the Servicer shall remain obligated and primarily liable to the Trustee and the Trust Fund for the servicing and administering of the Mortgage Loans in accordance with the provisions hereof without diminution of such obligation or liability by virtue of any subservicing, subcontracting or other agreements or arrangements or by virtue of indemnification from a Subservicer, Subcontractor or a third party and to the same extent and under the same terms and conditions as if the Servicer alone were servicing the Mortgage Loans, including with respect to compliance with Item 1122 of Regulation AB. The Servicer shall be entitled to enter into any agreement with a Subservicer, Subcontractor or other third party for indemnification of the Servicer by such Subservicer, Subcontractor or third party and nothing contained in the Agreement shall be deemed to limit or modify such indemnification.

Section 3.05   No Contractual Relationship between Subservicers and the Master Servicer . Any Subservicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Subservicer in its capacity as such shall be deemed to be between the Subservicer and the Servicer alone, and none of the Trustee, the Depositor, the Securities Administrator, or the Master Servicer (nor any successor master servicer) shall be deemed a party thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Subservicer except as set forth in Section 3.06. The Servicer shall be solely liable for all fees owed by it to any Subservicer, irrespective of whether the Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.

Section 3.06   Assumption or Termination of Subservicing Agreements by Master Servicer . In the event the Servicer at any time shall for any reason no longer be the Servicer (including by reason of the occurrence of an Event of Default), the Master Servicer, or its designee or the successor servicer if the successor is not the Master Servicer, shall thereupon assume all of the rights and obligations of the Servicer under each Subservicing Agreement that the Servicer may have entered into, with copies thereof provided to the Master Servicer or the successor servicer if the successor is not the Master Servicer, prior to the Master Servicer or the successor servicer if the successor is not the Master Servicer, assuming such rights and obligations, unless the Master Servicer elects to terminate any Subservicing Agreement in accordance with its terms as provided in Section 3.03.

Upon such assumption, the Master Servicer, its designee or the successor servicer shall be deemed, subject to Section 3.03, to have assumed all of the Servicer’s interest therein and to have replaced the Servicer as a party to each Subservicing Agreement to the same extent as if each Subservicing Agreement had been assigned to the assuming party, except that (i) the Servicer shall not thereby be relieved of any liability or obligations under any Subservicing Agreement that arose before it ceased to be the Servicer and (ii) none of the Trustee, the Depositor, the Master Servicer, the Securities Administrator, their designees or any successor servicer shall be deemed to have assumed any liability or obligation of the Servicer that arose before it ceased to be the Servicer.

The Servicer at its expense shall, upon request of the Master Servicer, its designee or the successor servicer deliver to the assuming party all documents and records relating to the Subservicing Agreement and the Mortgage Loans then being serviced and an accounting of amounts collected and held by or on behalf of it, and otherwise use its best efforts to effect the orderly and efficient transfer of the Subservicing Agreements to the assuming party.

Section 3.07   Collection of Certain Mortgage Loan Payments . (a)  The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any applicable Insurance Policies, follow such collection procedures as it would follow with respect to mortgage loans comparable to the Mortgage Loans and held for its own account. Consistent with the foregoing and Accepted Servicing Practices, the Servicer may (i) waive any late payment charge or, if applicable, any penalty interest, or (ii) extend the due dates for the Scheduled Payments due on a Mortgage Note for a period of not greater than 180 days; provided , that any extension pursuant to clause (ii) above shall not affect the amortization schedule of any Mortgage Loan for purposes of any computation hereunder, except as provided below. In the event of any such arrangement pursuant to clause (ii) above, the Servicer shall make timely advances on such Mortgage Loan during such extension pursuant to Section 4.01 and in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangements, subject to Section 4.01(d) pursuant to

which the Servicer shall not be required to make any such advances that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or in the judgment of the Servicer, such default is reasonably foreseeable, the Servicer, consistent with the standards set forth in Section 3.01, may also waive, modify or vary any term of such Mortgage Loan (including, but not limited to, modifications that would change the Mortgage Rate, forgive the payment of principal or interest, extend the final maturity date of such Mortgage Loan or waive, in whole or in part, a Prepayment Charge), accept payment from the related Mortgagor of an amount less than the Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “ Forbearance ”); provided, however , that the final maturity date of any Mortgage Loan may not be extended beyond the Final Scheduled Distribution Date for the LIBOR and Fixed Rate Certificates. The Servicer’s analysis supporting any Forbearance and the conclusion that any Forbearance meets the standards of Section 3.01 shall be reflected in writing in the Servicing File or on the Servicer’s servicing records. In addition, notwithstanding the foregoing, the Servicer may also waive (or permit a Subservicer to waive), in whole or in part, a Prepayment Charge if such waiver would, in the Servicer’s judgment, maximize recoveries on the related Mortgage Loan or if such Prepayment Charge is (i) not permitted to be collected by applicable law, or the collection of the Prepayment Charge would be considered “predatory” pursuant to written guidance published by any applicable federal, state or local regulatory authority having jurisdiction over such matters, or (ii) the enforceability of such Prepayment Charge is limited (1) by bankruptcy, insolvency, moratorium, receivership or other similar laws relating to creditors’ rights or (2) due to acceleration in connection with a foreclosure or other involuntary payment. If a Prepayment Charge is waived other than as permitted in this Section 3.07(a), then the Servicer is required to pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Collection Account together with and at the time that the amount prepaid on the related Mortgage Loan is required to be deposited into the Collection Account; provided, however , that the Servicer shall not have an obligation to pay the amount of any uncollected Prepayment Charge if the failure to collect such amount is the direct result of inaccurate or incomplete information on the Mortgage Loan Schedule in effect at such time. The Master Servicer shall have no responsibility for verifying the accuracy of the amount of Prepayment Charges waived or remitted by the Servicer

(b)   (i) The Securities Administrator shall establish and maintain the Excess Reserve Fund Account as an asset of the Supplemental Interest Trust, on behalf of the Class X Certificateholders, to receive any Basis Risk Payment and to secure their limited recourse obligation to pay to the LIBOR and Fixed Rate Certificateholders any Basis Risk Carryover Amounts. The Excess Reserve Fund Account shall be funded on the Closing Date with an initial deposit of $1,000 by the Depositor.

(ii)   On each Distribution Date, the Securities Administrator shall deposit the amount of any Basis Risk Payment for such date into the Excess Reserve Fund Account.

(c)   (i)   On each Distribution Date on which there exists a Basis Risk Carryover Amount on any Class of LIBOR or Fixed Rate Certificates, the Securities Administrator shall (1) withdraw from the Distribution Account and deposit in the Excess Reserve Fund Account, as set forth in Section 4.02(a)(iii)(C), the lesser of (x) the Class X Distributable Amount (without regard to the reduction in the definition thereof with respect to the Basis Risk Payment (to the extent remaining after the distributions specified in Sections    4.02(a)(iii)(A) through (E))) and (y) the aggregate Basis Risk Carryover Amounts for such Distribution Date and (2) withdraw from the Excess Reserve Fund Account amounts necessary to pay to such Class or Classes of LIBOR and Fixed Rate Certificates the applicable Basis Risk Carryover Amount. Such payments shall be allocated to those Classes on a pro rata basis based upon the amount of Basis Risk Carryover Amount owed to each such Class and shall be paid in the priority set forth in Sections 4.02(a)(iii)(D).

(ii)   The Securities Administrator shall account for the Excess Reserve Fund Account as an asset of a grantor trust under subpart E, Part I of subchapter J of the Code and not as an asset of any REMIC created pursuant to this Agreement. The beneficial owners of the Excess Reserve Fund Account are the Class X Certificateholders. For all federal tax purposes, amounts transferred by the Upper Tier REMIC to the Excess Reserve Fund Account shall be treated as distributions by the Securities Administrator to the Class X Certificateholders.

(iii)   Any Basis Risk Carryover Amounts paid by the Securities Administrator to the LIBOR and Fixed Rate Certificateholders shall be accounted for by the Securities Administrator as amounts paid first to the Holders of the Class X Certificates and then to the respective Class or Classes of LIBOR and Fixed Rate Certificates. In addition, the Securities Administrator shall account for such Certificateholders’ rights to receive payments of Basis Risk Carryover Amounts as rights in a limited recourse notional principal contract written by the Class X Certificateholders in favor of such Certificateholders.

(iv)   Notwithstanding any provision contained in this Agreement, the Securities Administrator shall not be required to make any payments to and from the Excess Reserve Fund Account except as expressly set forth in this Section 3.07(c) and Sections 4.02(a)(iii)(C), (D) and (G).

(d)   The Master Servicer shall establish and maintain the Master Servicing Account on behalf of the Certificateholders. The Master Servicer shall, promptly upon receipt, deposit in the Master Servicing Account and retain therein the following:

(i)   the aggregate amount remitted by the Servicer to the Master Servicer pursuant to Section 3.11;

(ii)   any amount deposited by the Servicer pursuant to Section 3.12 in connection with any losses on Permitted Investments; and

(iii)   any other amounts deposited hereunder which are required to be deposited in the Master Servicing Account.

In the event that the Servicer shall remit any amount not required to be remitted, it may at any time direct the Master Servicer in writing to withdraw such amount from the Master Servicing Account, any provision herein to the contrary notwithstanding. Such direction may be accomplished by delivering notice to the Master Servicer which describes the amounts deposited in error in the Master Servicing Account. All funds deposited in the Master Servicing Account shall be held by the Master Servicer in trust for the Certificateholders until disbursed in accordance with this Agreement. On each Master Servicer Remittance Date, the entire amount on deposit in the Master Servicing Account (subject to permitted withdrawals as set forth above) shall be remitted to the Securities Administrator for deposit into the Distribution Account by wire transfer in immediately available funds.

(e)   The Securities Administrator shall establish and maintain the Distribution Account on behalf of the Certificateholders. The Securities Administrator shall, promptly upon receipt, deposit in the Distribution Account and retain therein the following:

(i)   any amount remitted by the Master Servicer from the Master Servicing Account pursuant to this Agreement; and

(ii)   any other amounts deposited hereunder which are required to be deposited in the Distribution Account.

In the event that the Master Servicer shall remit any amount not required to be remitted, it may at any time direct the Securities Administrator in writing to withdraw such amount from the Distribution Account, any provision herein to the contrary notwithstanding. Such direction may be accomplished by delivering notice to the Securities Administrator which describes the amounts deposited in error in the Distribution Account. All funds deposited in the Distribution Account shall be held by the Securities Administrator in trust for the Certificateholders until disbursed in accordance with this Agreement or withdrawn in accordance with Section 4.02.

Section 3.08   Subservicing Accounts . In those cases where a Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement, the Subservicer will be required to establish and maintain one or more segregated accounts (collectively, the “ Subservicing Account ”). The Subservicing Account shall be an Eligible Account and shall otherwise be acceptable to the Servicer. The Subservicer shall deposit in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than one Business Day after the Subservicer’s receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less its servicing compensation to the extent permitted by the Subservicing Agreement, and shall thereafter deposit such amounts in the Subservicing Account, in no event more than two Business Days after the deposit of such funds into the clearing account. The Subservicer shall thereafter deposit such proceeds in the Collection Account or remit such proceeds to the Servicer for deposit in the Collection Account not later than two Business Days after the deposit of such amounts in the Subservicing Account. For purposes of this Agreement, the Servicer shall be deemed to have received payments on the Mortgage Loans when the Subservicer receives such payments. Funds in the clearing account and any Subservicing Account may, in the discretion of the Servicer, be invested in Permitted Investments pending their deposit into the Subservicing Account and the Collection Account, respectively; provided , however , the Servicer shall be responsible for any losses incurred on such investments immediately upon realization.

Section 3.09   Collection of Taxes, Assessments and Similar Items; Escrow Accounts . To the extent the related Mortgage provides for Escrow Payments, the Servicer shall establish and maintain, or cause to be established and maintained, one or more segregated accounts (the “ Escrow Accounts ”), which shall be Eligible Accounts. The Servicer shall deposit in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than one Business Day after the Servicer’s receipt thereof, all collections from the Mortgagors (or related advances from Subservicers) for the payment of taxes, assessments, hazard insurance premiums and comparable items for the account of the Mortgagors (“ Escrow Payments ”) collected on account of the Mortgage Loans and shall thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more than two Business Days after the deposit of such funds in the clearing account, for the purpose of effecting the payment of any such items as required under the terms of this Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i) effect payment of taxes, assessments, hazard insurance premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to the extent provided in the related Subservicing Agreement) out of the collection for any advances made pursuant to Section 3.01 (with respect to taxes and assessments) and Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as may be determined to be overages; (iv) pay interest, if required and as described below, to Mortgagors on balances in the Escrow Account; (v) clear and terminate the Escrow Account at the termination of the Servicer’s obligations and responsibilities in respect of the Mortgage Loans under this Agreement; or (vi) recover amounts deposited in error. As part of its servicing duties, the Servicer or Subservicers shall pay to the Mortgagors interest on funds in Escrow Accounts, to the extent required by law and, to the extent that interest earned on funds in the Escrow Accounts is insufficient, to pay such interest from its or their own funds, without any reimbursement therefor. To the extent that a Mortgage does not provide for Escrow Payments, the Servicer shall determine whether any such payments are made by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The Servicer assumes full responsibility for the payment of all such bills within such time and shall effect payments of all such bills irrespective of the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments; provided, however , that such advances are deemed to be Servicing Advances.

Section 3.10   Collection Account . (a)  On behalf of the Trust, the Servicer shall establish and maintain, or cause to be established and maintained, one or more segregated Eligible Accounts (such account or accounts, the “ Collection Account ”), held in trust for the benefit of the Trustee. On behalf of the Trust, the Servicer shall deposit or cause to be deposited in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections on mortgage loans in connection with its mortgage loan servicing activities on a daily basis, and in no event more than one Business Day after the Servicer’s receipt thereof, and shall thereafter deposit into the Collection Account, in no event more than two Business Days after the deposit of such funds into the clearing account, as and when received or as otherwise required hereunder, the following payments and collections received or made by it subsequent to the Cut-off Date (other than in respect of principal or interest on the related Mortgage Loans due on or before the Cut-off Date), or payments (other than Principal Prepayments) received by it on or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:

(i)   all payments on account of principal, including Principal Prepayments, on the Mortgage Loans;

(ii)