POOLING AND SERVICING AGREEMENT

SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.

Depositor

LITTON LOAN SERVICING LP

Servicer

U. S. BANK NATIONAL ASSOCIATION

Trustee

and

CITIBANK, N.A.

Trust Administrator

POOLING AND SERVICING AGREEMENT

Dated as of September 1, 2002

Salomon Home Equity Loan Trust, Series 2002-WMC2

Asset Backed Pass-Through Certificates

Series 2002-WMC2

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TABLE OF CONTENTS

<S> <C>

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms........................................................................-1-

SECTION 1.02. Allocation of Certain Interest Shortfalls...........................................-45-

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;

ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01. Conveyance of the Mortgage Loans....................................................-47-

SECTION 2.02. Acceptance of REMIC I by Trustee....................................................-49-

SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the

Originator..........................................................................-50-

SECTION 2.04. Reserved............................................................................-52-

SECTION 2.05. Representations, Warranties and Covenants of the Servicer...........................-52-

SECTION 2.06. Issuance of the REMIC I Regular Interests and the Class R-I

Interest............................................................................-54-

SECTION 2.07. Conveyance of the REMIC I Regular Interests; Acceptance of REMIC

II by the Trustee...................................................................-55-

SECTION 2.08. Issuance of Class R Certificates....................................................-55-

SECTION 2.09. Conveyance of the Class M-4 Interest; Acceptance of REMIC III by the

Trustee.............................................................................-55-

SECTION 2.10. Conveyance of the Class M-5 Interest; Acceptance of REMIC IV by the

Trustee.............................................................................-55-

SECTION 2.11. Conveyance of the Class CE-I Interest and the Class CE-II Interest;

Acceptance of REMIC V by the Trustee................................................-55-

SECTION 2.12. Conveyance of the Class P Interest; Acceptance of REMIC VI by the

Trustee.............................................................................-56-

SECTION 2.13. Issuance of Class R-X Certificates..................................................-56-

ARTICLE III

ADMINISTRATION AND SERVICING

OF THE MORTGAGE LOANS

SECTION 3.01. Servicer to Act as Servicer.........................................................-57-

SECTION 3.02. Sub-Servicing Agreements Between Servicer and

Sub-Servicers.......................................................................-59-

SECTION 3.03. Successor Sub-Servicers.............................................................-60-

SECTION 3.04. No Contractual Relationship Between Sub-Servicer, Trust Administrator,

Trustee or the Certificateholders...................................................-60-

SECTION 3.05. Assumption or Termination of Sub-Servicing Agreement by Trust

Administrator.......................................................................-60-

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SECTION 3.06. [Reserved]..........................................................................-60-

SECTION 3.07. Collection of Certain Mortgage Loan Payments........................................-61-

SECTION 3.08. [Reserved]..........................................................................-61-

SECTION 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts..............-61-

SECTION 3.10. Collection Account, Distribution Account and Initial Deposit Accounts...............-62-

SECTION 3.11. Withdrawals from the Collection Account and Distribution Account....................-64-

SECTION 3.12. Investment of Funds in the Investment Accounts......................................-66-

SECTION 3.13. [Reserved]..........................................................................-67-

SECTION 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity

Coverage............................................................................-67-

SECTION 3.15. Enforcement of Due-on-Sale Clauses; Assumption Agreements...........................-68-

SECTION 3.16. Realization Upon Defaulted Mortgage Loans...........................................-69-

SECTION 3.17. Trustee to Cooperate; Release of Mortgage Files.....................................-71-

SECTION 3.18. Servicing Compensation..............................................................-72-

SECTION 3.19. Reports to the Trust Administrator and the Trustee; Collection Account

Statements..........................................................................-73-

SECTION 3.20. Statement as to Compliance..........................................................-73-

SECTION 3.21. Independent Public Accountants' Servicing Report....................................-73-

SECTION 3.22. Access to Certain Documentation.....................................................-74-

SECTION 3.23. Title, Management and Disposition of REO Property...................................-74-

SECTION 3.24. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls............-77-

SECTION 3.25. [Reserved]..........................................................................-77-

SECTION 3.26. Obligations of the Servicer in Respect of Mortgage Rates and Monthly

Payments............................................................................-77-

SECTION 3.27. Reserve Fund........................................................................-77-

SECTION 3.28. Advance Facility....................................................................-79-

ARTICLE IV

PAYMENTS TO CERTIFICATEHOLDERS

SECTION 4.01. Distributions.......................................................................-80-

SECTION 4.02. Statements to Certificateholders....................................................-88-

SECTION 4.03. Remittance Reports; Advances........................................................-91-

SECTION 4.04. Allocation of Realized Losses.......................................................-92-

SECTION 4.05. Compliance with Withholding Requirements............................................-94-

SECTION 4.06 Exchange Commission; Additional Information.........................................-95-

SECTION 4.07 Net WAC Rate Carryover Reserve Account..............................................-95-

SECTION 4.08. Excess Net WAC Rate Reserve Fund....................................................-96-

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ARTICLE V

THE CERTIFICATES

SECTION 5.01. The Certificate.....................................................................-98-

SECTION 5.02. Registration of Transfer and Exchange of Certificates..............................-100-

SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates..................................-104-

SECTION 5.04. Persons Deemed Owners..............................................................-105-

SECTION 5.05. Certain Available Information......................................................-105-

ARTICLE VI

THE DEPOSITOR AND THE SERVICER

SECTION 6.01. Liability of the Depositor and the Servicer........................................-107-

SECTION 6.02. Merger or Consolidation of the Depositor or the Servicer...........................-107-

SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others..................-107-

SECTION 6.04. Limitation on Resignation of the Servicer..........................................-108-

SECTION 6.05. Rights of the Depositor in Respect of the Servicer.................................-109-

ARTICLE VII

DEFAULT

SECTION 7.01. Servicer Events of Default.........................................................-110-

SECTION 7.02. Trust Administrator or Trustee to Act; Appointment of Successor....................-112-

SECTION 7.03. Notification to Certificateholders.................................................-113-

SECTION 7.04. Waiver of Servicer Events of Default...............................................-114-

ARTICLE VIII

CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR

SECTION 8.01. Duties of Trustee and Trust Administrator..........................................-115-

SECTION 8.02. Certain Matters Affecting the Trustee and the Trust

Administrator......................................................................-116-

SECTION 8.04. Trustee and Trust Administrator May Own Certificates. .............................-117-

SECTION 8.05. Trustee's and Trust Administrator's Fees and Expenses. ............................-118-

SECTION 8.06. Eligibility Requirements for Trustee and Trust Administrator. .....................-118-

SECTION 8.07. Resignation and Removal of the Trustee and the Trust

Administrator .....................................................................-119-

SECTION 8.08. Successor Trustee or Trust Administrator...........................................-120-

SECTION 8.09. Merger or Consolidation of Trustee.................................................-121-

SECTION 8.10. Appointment of Co-Trustee or Separate Trustee......................................-121-

SECTION 8.11. Appointment of Office or Agency....................................................-122-

SECTION 8.12. Representations and Warranties.....................................................-122-

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ARTICLE IX

TERMINATION

SECTION 9.01 Termination Upon Repurchase or Liquidation of All Mortgage

Loans..............................................................................-124-

SECTION 9.02 Additional Termination Requirements................................................-126-

ARTICLE X

REMIC PROVISIONS

SECTION 10.01. REMIC Administration...............................................................-127-

SECTION 10.02. Prohibited Transactions and Activities.............................................-129-

SECTION 10.03. Servicer and Trustee and Trust Administrator

Indemnification....................................................................-130-

ARTICLE XI

MISCELLANEOUS PROVISIONS

SECTION 11.01. Amendment..........................................................................-131-

SECTION 11.02. Recordation of Agreement; Counterparts.............................................-132-

SECTION 11.03. Limitation on Rights of Certificateholders.........................................-132-

SECTION 11.04. Governing Law......................................................................-133-

SECTION 11.05. Notices............................................................................-133-

SECTION 11.06. Severability of Provisions.........................................................-134-

SECTION 11.07. Notice to Rating Agencies..........................................................-134-

SECTION 11.08. Article and Section References.....................................................-135-

SECTION 11.09. Grant of Security Interest.........................................................-135-

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Exhibits

--------

<S> <C>

Exhibit A-1 Form of Class A-1 Certificate

Exhibit A-2 Form of Class A-2 Certificate

Exhibit A-3 Form of Class M-1 Certificate

Exhibit A-4 Form of Class M-2 Certificate

Exhibit A-5 Form of Class M-3 Certificate

Exhibit A-6 Form of Class M-4 Certificate

Exhibit A-7 Form of Class M-5 Certificate

Exhibit A-8 Form of Class CE Certificate

Exhibit A-9 Form of Class P Certificate

Exhibit A-10 Form of Class R Certificate

Exhibit A-11 Form of Class R-X Certificate

Exhibit B [Reserved]

Exhibit C-1 Form of Trustee's Initial Certification

Exhibit C-2 Form of Trustee's Final Certification

Exhibit D Form of Mortgage Loan Purchase Agreement

Exhibit E-1 Request for Release

Exhibit E-2 Request for Release Mortgage Loans paid in full

Exhibit F-1 Form of Transferor Representation Letter and Form of Transferee Representation Letter

in Connection with Transfer of the Private Certificates Pursuant to Rule 144A Under the

1933 Act

Exhibit F-2 Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in Connection

with Transfer of Residual Certificates

Exhibit G Form of Certification with respect to ERISA and the Code

Exhibit H Form of Report Pursuant to Section 4.06

Exhibit I [Reserved]

Exhibit J Form of Officer's Certificate with respect to Prepayments

Exhibit K Form of Lost Note Affidavit

Exhibit L-1 Form of Certification to Be Provided by the Depositor with Form 10-K

Exhibit L-2 Form of Certification to Be Provided to Depositor by the Trustee

Exhibit L-3 Form of Certification to Be Provided to Depositor by the Servicer

Schedule 1 Mortgage Loan Schedule

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<PAGE>

This Pooling and Servicing Agreement, is dated and effective

as of September 1, 2002, among SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. as

Depositor, LITTON LOAN SERVICING LP as Servicer, U. S. BANK NATIONAL ASSOCIATION

as Trustee and CITIBANK N.A. as Trust Administrator.

PRELIMINARY STATEMENT:

The Depositor intends to sell pass-through certificates to be

issued hereunder in multiple classes, which in the aggregate will evidence the

entire beneficial ownership interest in each REMIC (as defined herein) created

hereunder. The Trust Fund will consist of a segregated pool of assets comprised

of the Mortgage Loans and certain other related assets subject to this

Agreement.

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<PAGE>

REMIC I

-------

As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the Mortgage Loans and certain other

related assets (other than the Servicer Prepayment Charge Payment Amount, the

Net Wac Rate Carryover Reserve Account, and the Excess Net WAC Rate Reserve

Fund) subject to this Agreement as a REMIC for federal income tax purposes, and

such segregated pool of assets will be designated as "REMIC I." The Class R-I

Interest will be the sole class of "residual interests" in REMIC I for purposes

of the REMIC Provisions (as defined herein). The following table irrevocably

sets forth the designation, the REMIC I Remittance Rate, the initial

Uncertificated Balance and, solely for purposes of satisfying Treasury

regulation section 1.860G- 1(a)(4)(iii), the "latest possible maturity date" for

each of the REMIC I Regular Interests (as defined herein). None of the REMIC I

Regular Interests will be certificated.

<TABLE>

<CAPTION>

REMIC I Initial Latest Possible

Designation Remittance Rate Uncertificated Balance Maturity Date(1)

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

<S> <C> <C> <C>

I-LTAA Variable(2) $309,116,745.70 September 25, 2032

I-LTA-1 Variable(2) $3,154,250.00 September 25, 2032

I-LTZZ Variable(2) $3,154,255.01 September 25, 2032

II-LTAA Variable(2) $166,908,779.90 September 25, 2032

II-LTA-2 Variable(2) $1,071,690.00 September 25, 2032

II-LTM1 Variable(2) $291,440.00 September 25, 2032

II-LTM2 Variable(2) $157,870.00 September 25, 2032

II-LTM3 Variable(2) $97,140.00 September 25, 2032

II-LTM4 Variable(2) $12,150.00 September 25, 2032

II-LTM5 Variable(2) $12,140.00 September 25, 2032

II-LTZZ Variable(2) $1,763,871.63 September 25, 2032

I-LTP Variable(2) $ 100.00 September 25, 2032

</TABLE>

_______________

(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loan with the latest maturity date has been

designated as the "latest possible maturity date" for each REMIC I

Regular Interest.

(2) Calculated in accordance with the definition of "REMIC I Remittance

Rate" herein.

-vii-

<PAGE>

REMIC II

--------

As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC

for federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC II." The Class R-II Interest will evidence the sole class

of "residual interests" in REMIC II for purposes of the REMIC Provisions under

federal income tax law. The following table irrevocably sets forth the

designation, the Pass-Through Rate, the initial aggregate Certificate Principal

Balance and, solely for purposes of satisfying Treasury regulation section

1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated

Classes of Certificates.

<TABLE>

<CAPTION>

Initial Aggregate

Certificate Principal Latest Possible

Designation Pass-Through Rate Balance Maturity Date(1)

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

<S> <C> <C> <C>

Class A-I Variable(2) $315,425,000.00 September 25, 2032

Class A-II Variable(2) $107,169,000.00 September 25, 2032

Class M-1 Variable(2) $29,144,000.00 September 25, 2032

Class M-2 Variable(2) $15,787,000.00 September 25, 2032

Class M-3 Variable(2) $9,714,000.00 September 25, 2032

Class M-4 Interest Variable(2) $1,215,000.00 September 25, 2032

Class M-5 Interest Variable(2) $1,214,000.00 September 25, 2032

Class CE-I Interest Variable(3) $250.71 September 25, 2032

Class CE-II Interest Variable(4) $6,072,081.53 September 25, 2032

Class P Interest N/A(5) $ 100.00 September 25, 2032

</TABLE>

_______________

(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loans with the latest maturity date has been

designated as the "latest possible maturity date" for each Class of

Certificates.

(2) Calculated in accordance with the definition of "Pass-Through Rate"

herein.

(3) The Class CE-I Interest will accrue interest at its variable

Pass-Through Rate on the Notional Amount of the Class CE-I Interest

outstanding from time to time which shall equal the Uncertificated

Balance of REMIC I Regular Interests I-LTAA, I-LTA-1 and I-LTZZ. The

Class CE-I Interest will not accrue interest on its Certificate

Principal Balance.

(4) The Class CE-II Interest will accrue interest at its variable

Pass-Through Rate on the Notional Amount of the Class CE-II Interest

outstanding from time to time which shall equal the Uncertificated

Balance of REMIC I Regular Interests II-LTAA, II-LTA-II, II-LTM-1,

II-LTM-2, II-LTM-3, II-LTM-4, II-LTM-5 and II-LTZZ. The Class CE-II

Interest will not accrue interest on its Certificate Principal Balance.

(5) The Class P Interest will not accrue interest.

-viii-

<PAGE>

REMIC III

---------

As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the Class M-4 Interest as a REMIC for

federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC III." The Class R-III Certificates will evidence the sole

class of "residual interests" in REMIC III for purposes of the REMIC Provisions

under federal income tax law. The following table irrevocably sets forth the

designation, the Pass-Through Rate, the initial aggregate Certificate Principal

Balance and, solely for purposes of satisfying Treasury regulation section

1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated

Classes of Certificates.

<TABLE>

<CAPTION>

Initial Aggregate

Certificate Principal Latest Possible

Designation Pass-Through Rate Balance Maturity Date(1)

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

<S> <C> <C> <C>

Class M-4 Variable(2) $ 1,215,000.00 September 25, 2032

</TABLE>

_______________

(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loans with the latest maturity date has been

designated as the "latest possible maturity date" for each Class of

Certificates.

(2) The Class M-4 Certificates will receive 100% of amounts received in

respect of the Class M-4 Interest.

-ix-

<PAGE>

REMIC IV

--------

As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the Class M-5 Interest as a REMIC for

federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC IV." The Class R-IV Certificates will evidence the sole

class of "residual interests" in REMIC IV for purposes of the REMIC Provisions

under federal income tax law. The following table irrevocably sets forth the

designation, the Pass-Through Rate, the initial aggregate Certificate Principal

Balance and, solely for purposes of satisfying Treasury regulation section

1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated

Classes of Certificates.

<TABLE>

<CAPTION>

Initial Aggregate

Certificate Principal Latest Possible

Designation Pass-Through Rate Balance Maturity Date(1)

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

<S> <C> <C> <C>

Class M-5 Variable(2) $ 1,214,000.00 September 25, 2032

</TABLE>

_______________

(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loans with the latest maturity date has been

designated as the "latest possible maturity date" for each Class of

Certificates.

(2) The Class M-5 Certificates will receive 100% of amounts received in

respect of the Class M-5 Interest.

-x-

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REMIC V

-------

As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the Class CE Interest as a REMIC for

federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC V." The Class R-V Certificates will evidence the sole class

of "residual interests" in REMIC V for purposes of the REMIC Provisions under

federal income tax law. The following table irrevocably sets forth the

designation, the Pass-Through Rate, the initial aggregate Certificate Principal

Balance and, solely for purposes of satisfying Treasury regulation section

1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated

Classes of Certificates.

<TABLE>

<CAPTION>

Initial Aggregate

Certificate Principal Latest Possible

Designation Pass-Through Rate Balance Maturity Date(1)

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

<S> <C> <C> <C>

Class CE Variable(2) $ 6,072,332.24 September 25, 2032

</TABLE>

_______________

(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loans with the latest maturity date has been

designated as the "latest possible maturity date" for each Class of

Certificates.

(2) The Class CE Certificates will receive 100% of amounts received in

respect of the Class CE-I Interest and the Class CE-II Interest.

-xi-

<PAGE>

REMIC VI

--------

As provided herein, the Trustee will elect to treat the

segregated pool of assets consisting of the Class P Interest as a REMIC for

federal income tax purposes, and such segregated pool of assets will be

designated as "REMIC VI." The Class R-VI Certificates will evidence the sole

class of "residual interests" in REMIC VI for purposes of the REMIC Provisions

under federal income tax law. The following table irrevocably sets forth the

designation, the Pass-Through Rate, the initial aggregate Certificate Principal

Balance and, solely for purposes of satisfying Treasury regulation section

1.860G-1(a)(4)(iii), the "latest possible maturity date" for the indicated

Classes of Certificates.

<TABLE>

<CAPTION>

Initial Aggregate

Certificate Principal Latest Possible

Designation Pass-Through Rate Balance Maturity Date(1)

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

<S> <C> <C> <C>

Class P Variable(2) $ 100.00 September 25, 2032

</TABLE>

_______________

(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury

regulations, the Distribution Date immediately following the maturity

date for the Mortgage Loans with the latest maturity date has been

designated as the "latest possible maturity date" for each Class of

Certificates.

(2) The Class P Certificates will receive 100% of amounts received in

respect of the Class P Interest.

As of the Cut-off Date, the Mortgage Loans had an aggregate

principal balance equal to $485,740,432.24.

In consideration of the mutual agreements herein contained,

the Depositor, the Servicer, the Trustee and the Trust Administrator agree as

follows:

-xii-

<PAGE>

ARTICLE I

DEFINITIONS

SECTION 1.01. Defined Terms.

Whenever used in this Agreement, including, without

limitation, in the Preliminary Statement hereto, the following words and

phrases, unless the context otherwise requires, shall have the meanings

specified in this Article. Unless otherwise specified, all calculations

described herein shall be made on the basis of a 360-day year consisting of

twelve 30-day months.

"Accepted Servicing Practices": The servicing standards set

forth in Section 3.01.

"Accrued Certificate Interest": With respect to any Class A

Certificate, Mezzanine Certificate, the Class CE-I Interest or the Class CE-II

Interest and each Distribution Date, interest accrued during the related

Interest Accrual Period at the Pass-Through Rate for such Certificate for such

Distribution Date on the Certificate Principal Balance, in the case of the Class

A Certificates and the Mezzanine Certificates, or on the Notional Amount, in the

case of the Class CE-I Interest and the Class CE-II Interest, of such

Certificate immediately prior to such Distribution Date plus, in the case of the

Mezzanine Certificates and solely for federal income tax purposes, the amount of

the Excess Net WAC Pass-Through Rate Amount, if any, for such class of Mezzanine

Certificates for such Distribution Date. The Class P Interest is not entitled to

distributions in respect of interest and, accordingly, will not accrue interest.

All distributions of interest on the Class A Certificates and the Mezzanine

Certificates will be calculated on the basis of a 360-day year and the actual

number of days in the applicable Interest Accrual Period. All distributions of

interest on the Class CE Interest will be based on a 360-day year consisting of

twelve 30-day months. Accrued Certificate Interest with respect to each

Distribution Date, as to any Class A Certificate, Mezzanine Certificate, the

Class CE-I Interest or the Class CE-II Interest, shall be reduced by (i) an

amount equal to the portion allocable to such Certificate pursuant to Section

1.02 hereof of the sum of (a) the aggregate Prepayment Interest Shortfall, if

any, for such Distribution Date to the extent not covered by payments pursuant

to Section 3.24 and (b) the aggregate amount of any Relief Act Interest

Shortfall, if any, for such Distribution Date and (ii) in the case of the

Mezzanine Certificates and solely for federal income tax purposes, the amount of

the Excess REMIC Net WAC Rate Amount, if any, for such Distribution Date. In

addition, Accrued Certificate Interest with respect to each Distribution Date,

as to the Class CE-I Interest and the Class CE-II Interest, shall be reduced by

an amount equal to the portion allocable to the Class CE Interest, as

applicable, of Realized Losses, if any, pursuant to Section 4.04 hereof.

"Adjustable-Rate Mortgage Loan": Each of the Mortgage Loans

identified on the Mortgage Loan Schedule as having a Mortgage Rate that is

subject to adjustment.

"Adjustment Date": With respect to each Adjustable-Rate

Mortgage Loan, the first day of the month in which the Mortgage Rate of such

Mortgage Loan changes pursuant to the related Mortgage Note. The first

Adjustment Date following the Cut-off Date as to each Adjustable-Rate Mortgage

Loan is set forth in the Mortgage Loan Schedule.

-1-

<PAGE>

"Administration Fee": The amount payable to the Trust

Administrator on each Distribution Date pursuant to Section 8.05 as compensation

for all services rendered by it or the Trustee in the execution of the trust

hereby created and in the exercise and performance of any of the powers and

duties of the Trust Administrator and the Trustee hereunder, which amount shall

equal the product of (i) the Administration Fee Rate, multiplied by (ii) the

aggregate Stated Principal Balance of the Mortgage Loans and any REO Properties.

The fee payable to the Trustee for all services rendered by it in the execution

of the trust hereby created and the exercise and performance of any of the

powers and duties of the Trustee hereunder will be paid by the Trust

Administrator out of the Trust Administrator's own funds or out of the

Administration Fee received by the Trust Administrator.

"Administration Fee Rate": 0.009% per annum.

"Advance": As to any Mortgage Loan, any advance made by the

Servicer in respect of any Distribution Date pursuant to Section 4.03.

"Advance Facility": As defined in Section 3.28 hereof.

"Advance Facility Notice": As defined in Section 3.28 hereof.

"Advance Financing Person": As defined in Section 3.28 hereof.

"Advance Reimbursement Amounts": As defined in Section 3.28

hereof.

"Affiliate": With respect to any specified Person, any other

Person controlling or controlled by or under common control with such specified

Person. For the purposes of this definition, "control" when used with respect to

any specified Person means the power to direct the management and policies of

such Person, directly or indirectly, whether through the ownership of voting

securities, by contract or otherwise, and the terms "controlling" and

"controlled" have meanings correlative to the foregoing.

"Aggregate Loss Severity 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 on any Mortgage Loans

from the Cut-off Date to the last day of the preceding calendar month and the

denominator of which is the aggregate Principal Balance of such Mortgage Loans

immediately prior to the liquidation of such Mortgage Loans.

"Agreement": This Pooling and Servicing Agreement and all

amendments hereof and supplements hereto.

"Assignment": An assignment of Mortgage, notice of transfer or

equivalent instrument, in recordable form (excepting therefrom, if applicable,

the mortgage recordation information which has not been required pursuant to

Section 2.01 hereof or returned by the applicable recorder's office), which is

sufficient under the laws of the jurisdiction wherein the related Mortgaged

Property is located to reflect of record the sale of the Mortgage, which

assignment, notice of transfer or equivalent instrument may be in the form of

one or more blanket assignments covering

-2-

<PAGE>

Mortgages secured by Mortgaged Properties located in the same county, if

permitted by law.

"Available Distribution Amount": With respect to any

Distribution Date, an amount equal to (1) the sum of (a) the aggregate of the

amounts on deposit in the Collection Account and Distribution Account

attributable to the Mortgage Loans as of the close of business on the related

Determination Date, (b) the aggregate of any amounts received in respect of an

REO Property withdrawn from any REO Account and deposited in the Distribution

Account for such Distribution Date pursuant to Section 3.23, (c) the aggregate

of any amounts deposited in the Distribution Account by the Servicer in respect

of Prepayment Interest Shortfalls attributable to the Mortgage Loans for such

Distribution Date pursuant to Section 3.24, (d) the aggregate of any Advances

attributable to the Mortgage Loans made by the Servicer for such Distribution

Date pursuant to Section 4.03 and (e) the aggregate of any advances attributable

to the Mortgage Loans made by the Trust Administrator or the Trustee, as

applicable, for such Distribution Date pursuant to Section 7.02(b), reduced (to

not less than zero), by (2) the sum of (x) the portion of the amount described

in clause (1)(a) above that represents (i) Monthly Payments on the Mortgage

Loans received from a Mortgagor on or prior to the Determination Date but due

during any Due Period subsequent to the related Due Period, (ii) Principal

Prepayments on the Mortgage Loans received after the related Prepayment Period

(together with any interest payments received with such Principal Prepayments to

the extent they represent the payment of interest accrued on the Mortgage Loans

during a period subsequent to the related Prepayment Period) (other than

Prepayment Charges), (iii) Liquidation Proceeds and Insurance Proceeds received

in respect of the Mortgage Loans after the related Prepayment Period, (iv)

amounts reimbursable or payable to the Depositor, the Servicer, the Trustee, the

Trust Administrator, the Seller or any Sub-Servicer pursuant to Section 3.11 or

Section 3.12 or otherwise payable in respect of Extraordinary Trust Fund

Expenses attributable to the Mortgage Loans, (v) Stayed Funds, (vi) the

Administration Fee attributable to the Mortgage Loans payable from the

Distribution Account pursuant to Section 8.05, (vii) amounts deposited in the

Collection Account or the Distribution Account in error and (viii) the amount of

any Prepayment Charges collected by the Servicer in connection with the

Principal Prepayment of any of the Mortgage Loans or any Servicer Prepayment

Charge Payment Amount with respect to the Mortgage Loans, and (y) amounts

reimbursable to the Trustee or the Trust Administrator, as applicable, for an

advance made pursuant to Section 7.02(b) which advance the Trustee or Trust

Administrator, as applicable, has determined to be nonrecoverable from the

Stayed Funds in respect of which it was made.

"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11

of the United States Code), as amended.

"Bankruptcy Loss": With respect to any Mortgage Loan, a

Realized Loss resulting from a Deficient Valuation or Debt Service Reduction.

"Book-Entry Certificate": The Class A Certificates and the

Mezzanine Certificates for so long as the Certificates of such Class shall be

registered in the name of the Depository or its nominee.

"Book-Entry Custodian": The custodian appointed pursuant to

Section 5.01.

"Business Day": Any day other than a Saturday, a Sunday or a

day on which banking

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or savings and loan institutions in the State of New York or in the city in

which the Corporate Trust Office of the Trust Administrator or the Corporate

Trust Office of the Trustee is located, are authorized or obligated by law or

executive order to be closed.

"Cash-Out Refinancing": A Refinanced Mortgage Loan the

proceeds of which are more than a nominal amount in excess of the principal

balance of any existing first mortgage or subordinate mortgage on the related

Mortgaged Property and related closing costs.

"Certificate": Any one of the Asset Backed Pass-Through

Certificates, Series 2002- WMC2, Class A-1, Class A-2, Class M-1, Class M-2,

Class M-3, Class M-4, Class M-5, Class CE, Class P, Class R and Class R-X issued

under this Agreement.

"Certificate Factor": With respect to any Class of Regular

Certificates as of any Distribution Date, a fraction, expressed as a decimal

carried to six places, the numerator of which is the aggregate Certificate

Principal Balance (or the Notional Amount, in the case of the Class CE

Certificates) of such Class of Certificates on such Distribution Date (after

giving effect to any distributions of principal and in the case of the Mezzanine

Certificates and the Class CE Certificates, the allocations of Realized Losses

in reduction of the Certificate Principal Balance (or the Notional Amount, in

the case of the Class CE Certificates) of such Class of Certificates to be made

on such Distribution Date), and the denominator of which is the initial

aggregate Certificate Principal Balance (or the Notional Amount, in the case of

the Class CE Certificates) of such Class of Certificates as of the Closing Date.

"Certificate Margin": With respect to the Class A-1

Certificates and, for purposes of the definition of Group I Marker Rate, REMIC I

Regular Interest I-LTA, 0.325% in the case of each Distribution Date through and

including the Distribution Date on which the aggregate Principal Balance of the

Mortgage Loans (and properties acquired in respect thereof) remaining in the

Trust Fund is reduced to less than 10% of the aggregate Principal Balance of the

Mortgage Loans as of the Cut-off Date and 0.65% in the case of each Distribution

Date thereafter.

With respect to the Class A-2 Certificates and, for purposes

of the definition of Group I Marker Rate, REMIC I Regular Interest I-LTA, 0.28%

in the case of each Distribution Date through and including the Distribution

Date on which the aggregate Principal Balance of the Mortgage Loans (and

properties acquired in respect thereof) remaining in the Trust Fund is reduced

to less than 10% of the aggregate Principal Balance of the Mortgage Loans as of

the Cut-off Date and 0.56% in the case of each Distribution Date thereafter.

With respect to the Class M-1 Certificates and, for purposes

of the definition of Group II Marker Rate, REMIC I Regular Interest I-LTM1,

0.85% in the case of each Distribution Date through and including the

Distribution Date on which the aggregate Principal Balance of the Mortgage Loans

(and properties acquired in respect thereof) remaining in the Trust Fund is

reduced to less than 10% of the aggregate Principal Balance of the Mortgage

Loans as of the Cut-off Date and 1.275% in the case of each Distribution Date

thereafter.

With respect to the Class M-2 Certificates and, for purposes

of the definition of Group II Marker Rate, REMIC I Regular Interest I-LTM2,

1.45% in the case of each Distribution

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Date through and including the Distribution Date on which the aggregate

Principal Balance of the Mortgage Loans (and properties acquired in respect

thereof) remaining in the Trust Fund is reduced to less than 10% of the

aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date and

2.175% in the case of each Distribution Date thereafter.

With respect to the Class M-3 Certificates and, for purposes

of the definition of Group II Marker Rate, REMIC I Regular Interest I-LTM3,

2.25% in the case of each Distribution Date through and including the

Distribution Date on which the aggregate Principal Balance of the Mortgage Loans

(and properties acquired in respect thereof) remaining in the Trust Fund is

reduced to less than 10% of the aggregate Principal Balance of the Mortgage

Loans as of the Cut-off Date and 3.375% in the case of each Distribution Date

thereafter.

With respect to the Class M-4 Interest and, for purposes of

the definition of Group II Marker Rate, REMIC I Regular Interest I-LTM4, 2.50%

in the case of each Distribution Date through and including the Distribution

Date on which the aggregate Principal Balance of the Mortgage Loans (and

properties acquired in respect thereof) remaining in the Trust Fund is reduced

to less than 10% of the aggregate Principal Balance of the Mortgage Loans as of

the Cut-off Date and 3.75% in the case of each Distribution Date thereafter.

With respect to the Class M-5 Interest and, for purposes of

the definition of Group II Marker Rate, REMIC I Regular Interest I-LTM5, 2.50%

in the case of each Distribution Date through and including the Distribution

Date on which the aggregate Principal Balance of the Mortgage Loans (and

properties acquired in respect thereof) remaining in the Trust Fund is reduced

to less than 10% of the aggregate Principal Balance of the Mortgage Loans as of

the Cut-off Date and 3.75% in the case of each Distribution Date thereafter.

"Certificateholder" or "Holder": The Person in whose name a

Certificate is registered in the Certificate Register, except that a

Disqualified Organization or a Non-United States Person shall not be a Holder of

a Residual Certificate for any purposes hereof and, solely for the purposes of

giving any consent pursuant to this Agreement, any Certificate registered in the

name of the Depositor or the Servicer or any Affiliate thereof shall be deemed

not to be outstanding and the Voting Rights to which it is entitled shall not be

taken into account in determining whether the requisite percentage of Voting

Rights necessary to effect any such consent has been obtained, except as

otherwise provided in Section 11.01. The Trustee and the Trust Administrator may

conclusively rely upon a certificate of the Depositor or the Servicer in

determining whether a Certificate is held by an Affiliate thereof. All

references herein to "Holders" or "Certificateholders" shall reflect the rights

of Certificate Owners as they may indirectly exercise such rights through the

Depository and participating members thereof, except as otherwise specified

herein; provided, however, that the Trustee and the Trust Administrator shall be

required to recognize as a "Holder" or "Certificateholder" only the Person in

whose name a Certificate is registered in the Certificate Register.

"Certificate Owner": With respect to a Book-Entry Certificate,

the Person who is the beneficial owner of such Certificate as reflected on the

books of the Depository or on the books of a Depository Participant or on the

books of an indirect participating brokerage firm for which a Depository

Participant acts as agent.

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"Certificate Principal Balance": With respect to each Class A

Certificate, Mezzanine Certificate or Class P Interest as of any date of

determination, the Certificate Principal Balance of such Certificate on the

Distribution Date immediately prior to such date of determination, minus all

distributions allocable to principal made thereon and Realized Losses allocated

thereto on such immediately prior Distribution Date (or, in the case of any date

of determination up to and including the first Distribution Date, the initial

Certificate Principal Balance of such Certificate, as stated on the face

thereof). With respect to the Class CE-I Interest as of any date of

determination, an amount equal to the Percentage Interest evidenced by such

Certificate times the excess, if any, of (A) the then aggregate Uncertificated

Balances of the REMIC I Group I Regular Interests over (B) the then aggregate

Certificate Principal Balances of the Class A-1 Certificates and the Class P

Interest then outstanding. With respect to the Class CE-II Interest as of any

date of determination, an amount equal to the Percentage Interest evidenced by

such Certificate times the excess, if any, of (A) the then aggregate

Uncertificated Balances of the REMIC I Group II Regular Interests over (B) the

then aggregate Certificate Principal Balances of the Class A-2 Certificates and

the Mezzanine Certificates then outstanding.

"Certificate Register": The register maintained pursuant to

Section 5.02.

"Class": Collectively, all of the Certificates bearing the

same class designation.

"Class A Certificates": Collectively, the Class A-1

Certificates and the Class A-2 Certificates.

"Class A-1 Certificate": Any one of the Class A-1 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-1 and evidencing a Regular

Interest in REMIC II for purposes of the REMIC Provisions.

"Class A-2 Certificate": Any one of the Class A-2 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-2 and evidencing a Regular

Interest in REMIC II for purposes of the REMIC Provisions.

"Class A Principal Distribution Amount": With respect to any

Distribution Date, the excess of (x) the aggregate Certificate Principal Balance

of the Class A Certificates immediately prior to such Distribution Date over (y)

the lesser of (A) the product of (i) 74.00% and (ii) the aggregate Stated

Principal Balance of the Mortgage Loans as of the last day of the related Due

Period (after giving effect to scheduled payments of principal due during the

related Due Period, to the extent received or advanced, and unscheduled

collections of principal received during the related Prepayment Period) and (B)

an amount, not less than zero, equal to the aggregate Stated Principal Balance

of the Mortgage Loans as of the last day of the related Due Period (after giving

effect to scheduled payments of principal due during the related Due Period, to

the extent received or advanced, and unscheduled collections of principal

received during the related Prepayment Period) minus $2,428,702.

"Class CE Certificate": Any one of the Class CE Certificates

executed, authenticated

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<PAGE>

and delivered by the Trustee or the Trust Administrator, substantially in the

form annexed hereto as Exhibit A-8 and evidencing a Regular Interest in REMIC VI

for purposes of the REMIC Provisions.

"Class CE-I Interest": An uncertificated interest in the Trust

Fund held by the Trustee on behalf of the Holders of the Class CE Certificates,

evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

"Class CE-II Interest": An uncertificated interest in the

Trust Fund held by the Trustee on behalf of the Holders of the Class CE

Certificates, evidencing a Regular Interest in REMIC II for purposes of the

REMIC Provisions.

"Class CE Interest": The Class CE-I Interest and the Class

CE-II Interest.

"Class M-1 Certificate": Any one of the Class M-1 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-3 and evidencing a Regular

Interest in REMIC II for purposes of the REMIC Provisions.

"Class M-1 Principal Distribution Amount": With respect to any

Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate

Principal Balance of the Class A Certificates (after taking into account the

payment of the Class A Principal Distribution Amount on such Distribution Date)

and (ii) the Certificate Principal Balance of the Class M-1 Certificates

immediately prior to such Distribution Date over (y) the lesser of (A) the

product of (i) 86.00% and (ii) the aggregate Stated Principal Balance of the

Mortgage Loans as of the last day of the related Due Period (after giving effect

to scheduled payments of principal due during the related Due Period, to the

extent received or advanced, and unscheduled collections of principal received

during the related Prepayment Period) and (B) an amount, not less than zero,

equal to the aggregate Stated Principal Balance of the Mortgage Loans as of the

last day of the related Due Period (after giving effect to scheduled payments of

principal due during the related Due Period, to the extent received or advanced,

and unscheduled collections of principal received during the related Prepayment

Period) minus $2,428,702.

"Class M-2 Certificate": Any one of the Class M-2 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-4 and evidencing a Regular

Interest in REMIC II for purposes of the REMIC Provisions.

"Class M-2 Principal Distribution Amount": With respect to any

Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate

Principal Balance of the Class A Certificates (after taking into account the

payment of the Class A Principal Distribution Amount on such Distribution Date),

(ii) the Certificate Principal Balance of the Class M-1 Certificates (after

taking into account the payment of the Class M-1 Principal Distribution Amount

on such Distribution Date) and (iii) the Certificate Principal Balance of the

Class M-2 Certificates immediately prior to such Distribution Date over (y) the

lesser of (A) the product of (i) 92.50% and (ii) the aggregate Stated Principal

Balance of the Mortgage Loans as of the last day of the related Due Period

(after giving effect to scheduled payments of principal due during the related

Due Period, to the extent received

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<PAGE>

or advanced, and unscheduled collections of principal received during the

related Prepayment Period) and (B) an amount, not less than zero, equal to the

aggregate Stated Principal Balance of the Mortgage Loans as of the last day of

the related Due Period (after giving effect to scheduled payments of principal

due during the related Due Period, to the extent received or advanced, and

unscheduled collections of principal received during the related Prepayment

Period) minus $2,428,702.

"Class M-3 Certificate": Any one of the Class M-3 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-5 and evidencing a Regular

Interest in REMIC III for purposes of the REMIC Provisions.

"Class M-3 Principal Distribution Amount": With respect to any

Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate

Principal Balance of the Class A Certificates (after taking into account the

payment of the Class A Principal Distribution Amount on such Distribution Date),

(ii) the Certificate Principal Balance of the Class M-1 Certificates (after

taking into account the payment of the Class M-1 Principal Distribution Amount

on such Distribution Date), (iii) the Certificate Principal Balance of the Class

M-2 Certificates (after taking into account the payment of the Class M-2

Principal Distribution Amount on such Distribution Date) and (iv) the

Certificate Principal Balance of the Class M-3 Certificates immediately prior to

such Distribution Date over (y) the lesser of (A) the product of (i) 96.50% and

(ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last

day of the related Due Period (after giving effect to scheduled payments of

principal due during the related Due Period, to the extent received or advanced,

and unscheduled collections of principal received during the related Prepayment

Period) and (B) an amount, not less than zero, equal to the aggregate Stated

Principal Balance of the Mortgage Loans as of the last day of the related Due

Period (after giving effect to scheduled payments of principal due during the

related Due Period, to the extent received or advanced, and unscheduled

collections of principal received during the related Prepayment Period) minus

$2,428,702.

"Class M-4 Certificate": Any one of the Class M-4 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-6 and evidencing a Regular

Interest in REMIC III for purposes of the REMIC Provisions.

"Class M-4 Interest": An uncertificated interest in the Trust

Fund held by the Trustee on behalf of the Holders of the Class M-4 Certificates,

evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

"Class M-4 Principal Distribution Amount": With respect to any

Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate

Principal Balance of the Class A Certificates (after taking into account the

payment of the Class A Principal Distribution Amount on such Distribution Date),

(ii) the Certificate Principal Balance of the Class M-1 Certificates (after

taking into account the payment of the Class M-1 Principal Distribution Amount

on such Distribution Date), (iii) the Certificate Principal Balance of the Class

M-2 Certificates (after taking into account the payment of the Class M-2

Principal Distribution Amount on such Distribution Date), (iv) the

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<PAGE>

Certificate Principal Balance of the Class M-3 Certificates (after taking into

account the payment of the Class M-3 Principal Distribution Amount on such

Distribution Date) and (v) the Certificate Principal Balance of the Class M-4

Interest immediately prior to such Distribution Date over (y) the lesser of (A)

the product of (i) 97.00% and (ii) the aggregate Stated Principal Balance of the

Mortgage Loans as of the last day of the related Due Period (after giving effect

to scheduled payments of principal due during the related Due Period, to the

extent received or advanced, and unscheduled collections of principal received

during the related Prepayment Period) and (B) an amount, not less than zero,

equal to the aggregate Stated Principal Balance of the Mortgage Loans as of the

last day of the related Due Period (after giving effect to scheduled payments of

principal due during the related Due Period, to the extent received or advanced,

and unscheduled collections of principal received during the related Prepayment

Period) minus $2,428,702.

"Class M-5 Certificate": Any one of the Class M-5 Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-7 and evidencing a Regular

Interest in REMIC III for purposes of the REMIC Provisions.

"Class M-5 Interest": An uncertificated interest in the Trust

Fund held by the Trustee on behalf of the Holders of the Class M-5 Certificates,

evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

"Class M-5 Principal Distribution Amount": With respect to any

Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate

Principal Balance of the Class A Certificates (after taking into account the

payment of the Class A Principal Distribution Amount on such Distribution Date),

(ii) the Certificate Principal Balance of the Class M-1 Certificates (after

taking into account the payment of the Class M-1 Principal Distribution Amount

on such Distribution Date), (iii) the Certificate Principal Balance of the Class

M-2 Certificates (after taking into account the payment of the Class M-2

Principal Distribution Amount on such Distribution Date), (iv) the Certificate

Principal Balance of the Class M-3 Certificates (after taking into account the

payment of the Class M-3 Principal Distribution Amount on such Distribution

Date), (v) the Certificate Principal Balance of the Class M-4 Certificates

immediately prior to such Distribution Date and (vi) the Certificate Principal

Balance of the Class M-5 Certificates immediately prior to such Distribution

Date over (y) the lesser of (A) the product of (i) 97.50% and (ii) the aggregate

Stated Principal Balance of the Mortgage Loans as of the last day of the related

Due Period (after giving effect to scheduled payments of principal due during

the related Due Period, to the extent received or advanced, and unscheduled

collections of principal received during the related Prepayment Period) and (B)

an amount, not less than zero, equal to the aggregate Stated Principal Balance

of the Mortgage Loans as of the last day of the related Due Period (after giving

effect to scheduled payments of principal due during the related Due Period, to

the extent received or advanced, and unscheduled collections of principal

received during the related Prepayment Period) minus $2,428,702.

"Class P Certificate": Any one of the Class P Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-9 and evidencing a Regular

Interest in REMIC VI for purposes of the REMIC Provisions.

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<PAGE>

"Class P Interest": An uncertificated interest in the Trust

Fund held by the Trustee on behalf of the Holders of the Class P Certificates,

evidencing a Regular Interest in REMIC II for purposes of the REMIC Provisions.

"Class R Certificate": Any one of the Class R Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A- 10 and evidencing the

ownership of the Class R-I Interest and the Class R-II Interest.

"Class R-X Certificate": Any one of the Class R-X Certificates

executed, authenticated and delivered by the Trustee or the Trust Administrator,

substantially in the form annexed hereto as Exhibit A-11 and evidencing the

ownership of the Class R-III Interest, the Class R-IV Interest, the Class R-V

Interest and the Class R-VI Interest.

"Class R-I Interest": The uncertificated Residual Interest in

REMIC I.

"Class R-II Interest": The uncertificated Residual Interest in

REMIC II.

"Class R-III Interest": The uncertificated Residual Interest

in REMIC III.

"Class R-IV Interest": The uncertificated Residual Interest in

REMIC IV.

"Class R-V Interest": The uncertificated Residual Interest in

REMIC V.

"Class R-VI Interest": The uncertificated Residual Interest in

REMIC VI.

"Closing Date": September 25, 2002.

"Code": The Internal Revenue Code of 1986.

"Collection Account": The account or accounts created and

maintained, or caused to be created and maintained, by the Servicer pursuant to

Section 3.10(a), which shall be entitled "Litton Loan Servicing LP, as Servicer

for U. S. Bank National Association, as Trustee, in trust for the registered

holders of Salomon Brothers Mortgage Securities VII, Inc., Salomon Home Equity

Loan Trust, Series 2002-WMC2, Asset Backed Pass-Through Certificates." The

Collection Account must be an Eligible Account.

"Commission": The Securities and Exchange Commission.

"Corporate Trust Office": The principal corporate trust office

of the Trust Administrator or the Trustee, as the case may be, at which at any

particular time its corporate trust business in connection with this Agreement

shall be administered, which office, with respect to the Trust Administrator, at

the date of the execution of this instrument is located at 111 Wall Street, 14th

Floor, Zone 3, New York New York 10005, or such other address as the Trust

Administrator may designate from time to time by notice to the

Certificateholders, the Depositor, the Servicer and the Trustee and, with

respect to the Trustee, at the date of the execution of this instrument is

located at 180 East Fifth Street, St. Paul, Minnesota 55101, Attn: Structured

Finance/SBMSVII 2002-WMC2,

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<PAGE>

or such other address as the Trustee may designate from time to time by notice

to the Certificateholders, the Depositor, the Servicer and the Trust

Administrator.

"Corresponding Certificate": With respect to (i) REMIC I

Regular Interest I-LTA-I, (ii) REMIC I Regular Interest II-LTA-II, (iii) REMIC I

Regular Interest II-LTM1, (iv) REMIC I Regular Interest II-LTM2, (v) REMIC I

Regular Interest II-LTM3, (vi) REMIC I Regular Interest II-LTM4 and the Class

M-4 Interest, (vii) REMIC I Regular Interest II-LTM5 and the Class M-5 Interest,

(viii) the Class CE Interest and (ix) REMIC I Regular Interest I-LTP and the

Class P Interest, (i) the Class A-1 Certificates, (ii) the Class A-2

Certificates, (iii) the Class M-1 Certificates, (iv) the Class M-2 Certificates,

(v) the Class M-3 Certificates, (vi) the Class M-4 Certificates, (vii) (vi) the

Class M-5 Certificates, (viii) the Class CE Certificates and (ix) the Class P

Certificates, respectively.

"Credit Enhancement Percentage": For any Distribution Date,

the percentage equivalent of a fraction, the numerator of which is the sum of

the aggregate Certificate Principal Balances of the Mezzanine Certificates and

the Class CE Interest, and the denominator of which is the aggregate Stated

Principal Balance of the Mortgage Loans as of the last day of the related Due

Period (after giving effect to scheduled payments of principal due during the

related Due Period, to the extent received or advanced, and unscheduled

collections of principal received during the related Prepayment Period).

"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 preceding calendar month and the denominator of which is the sum of

the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off

Date.

"Cut-off Date": With respect to each Original Mortgage Loan,

September 1, 2002. With respect to all Qualified Substitute Mortgage Loans,

their respective dates of substitution. References herein to the "Cut-off Date,"

when used with respect to more than one Mortgage Loan, shall be to the

respective Cut-off Dates for such Mortgage Loans.

"Debt Service Reduction": With respect to any Mortgage Loan, a

reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of

competent jurisdiction in a proceeding under the Bankruptcy Code, except such a

reduction resulting from a Deficient Valuation.

"Deficient Valuation": With respect to any Mortgage Loan, a

valuation of the related Mortgaged Property by a court of competent jurisdiction

in an amount less than the then outstanding Principal Balance of the Mortgage

Loan, which valuation results from a proceeding initiated under the Bankruptcy

Code.

"Definitive Certificates": As defined in Section 5.01(b).

"Deleted Mortgage Loan": A Mortgage Loan replaced or to be

replaced by a Qualified Substitute Mortgage Loan.

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"Delinquency Percentage": As of the last day of any Due

Period, the percentage equivalent of a fraction, the numerator of which is the

aggregate Stated Principal Balance of the Mortgage Loans that, as of the last

day of the previous calendar month, are 60 or more days delinquent, are in

foreclosure, have been converted to REO Properties or have been discharged by

reason of bankruptcy, and the denominator of which is the aggregate Stated

Principal Balance of the Mortgage Loans and REO Properties as of the last day of

such calendar month; provided, however, that any Mortgage Loan purchased by the

Servicer pursuant to Section 3.16(c) shall not be included in either the

numerator or the denominator for purposes of calculating the Delinquency

Percentage.

"Depositor": Salomon Brothers Mortgage Securities VII, Inc., a

Delaware corporation, or its successor in interest.

"Depository": The Depository Trust Company, or any successor

Depository hereafter named. The nominee of the initial Depository, for purposes

of registering those Certificates that are to be Book-Entry Certificates, is

CEDE & Co. The Depository shall at all times be a "clearing corporation" as

defined in Section 8-102(3) of the Uniform Commercial Code of the State of New

York and a "clearing agency" registered pursuant to the provisions of Section

17A of the Securities Exchange Act of 1934, as amended.

"Depository Institution": Any depository institution or trust

company, including the Trustee and the Trust 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 commercial paper, short term debt

obligation, or other short-term deposits are rated at least F-1 by Fitch and

A-1+ by S&P if the deposits are to be held in the account for less than 30 days

or long term unsecured debt obligations are rated at least AA- if the deposits

are to be held in the account more 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 Distribution Date,

the 15th day of the calendar month in which such Distribution Date occurs or, if

such 15th day is not a Business Day, the Business Day immediately preceding such

15th day.

"Directly Operate": With respect to any REO Property, the

furnishing or rendering of services to the tenants thereof, the management or

operation of such REO Property, the holding of such REO Property primarily for

sale to customers, the performance of any construction work thereon or any use

of such REO Property in a trade or business conducted by REMIC I other than

through an Independent Contractor; provided, however, that the Trustee (or the

Servicer on behalf of the Trustee) shall not be considered to Directly Operate

an REO Property solely because the Trustee (or the Servicer on behalf of the

Trustee) establishes rental terms, chooses tenants, enters into or renews

leases, deals with taxes and insurance, or makes decisions as to repairs or

capital expenditures with respect to such REO Property.

"Disqualified Organization": Any of the following: (i) the

United States, any State

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or political subdivision thereof, any possession of the United States, or any

agency or instrumentality of any of the foregoing (other than an instrumentality

which is a corporation if all of its activities are subject to tax and, except

for Freddie Mac, a majority of its board of directors is not selected by such

governmental unit), (ii) any foreign government, any international organization,

or any agency or instrumentality of any of the foregoing, (iii) any organization

(other than certain farmers' cooperatives described in Section 521 of the Code)

which is exempt from the tax imposed by Chapter 1 of the Code (including the tax

imposed by Section 511 of the Code on unrelated business taxable income), (iv)

rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of

the Code, (v) an "electing large partnership" and (vi) any other Person so

designated by the Trustee or the Trust Administrator based upon an Opinion of

Counsel that the holding of an Ownership Interest in a Residual Certificate by

such Person may cause any Trust REMIC or any Person having an Ownership Interest

in any Class of Certificates (other than such Person) to incur a liability for

any federal tax imposed under the Code that would not otherwise be imposed but

for the Transfer of an Ownership Interest in a Residual Certificate to such

Person. The terms "United States," "State" and "international organization"

shall have the meanings set forth in Section 7701 of the Code or successor

provisions.

"Distribution Account": The trust account or accounts created

and maintained by the Trust Administrator pursuant to Section 3.10(b), which

shall be entitled "Citibank, N.A., as Trust Administrator for U.S. Bank National

Association, as Trustee, in trust for the registered holders of Salomon Brothers

Mortgage Securities VII, Inc., Salomon Home Equity Loan Trust, Series 2002-WMC2,

Asset Backed Pass-Through Certificates." The Distribution Account must be an

Eligible Account.

"Distribution Date": The 25th day of any month, or if such

25th day is not a Business Day, the Business Day immediately following such 25th

day, commencing in October 2002.

"Due Date": With respect to each Mortgage Loan and any

Distribution Date, the first day of the calendar month in which such

Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was

due (or, in the case of any Mortgage Loan under terms of which the Monthly

Payment for such Mortgage Loan was due on a day other than the first day of the

calendar month in which such Distribution Date occurs, the day during the

related Due Period on which such Monthly Payment was due), in each case

exclusive of any days of grace.

"Due Period": With respect to any Distribution Date, the

period commencing on the second day of the month immediately preceding the month

in which such Distribution Date occurs and ending on the first day of the month

of such Distribution Date.

"Eligible Account": Any of (i) an account or accounts

maintained with a Depository Institution, (ii) an account or accounts the

deposits in which are fully insured by the FDIC or (iii) a segregated trust

account or accounts 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 Code

of Federal Regulation Section 9.10(b), which, in either case, has corporate

trust powers, acting in its fiduciary capacity .

"ERISA": The Employee Retirement Income Security Act of 1974,

as amended.

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"Estate in Real Property": A fee simple estate in a parcel of

land.

"Excess Net WAC Pass-Through Rate Amount": For any

Distribution Date and the Mezzanine Certificates, the positive excess, if any,

of (i) the amount of interest accrued on the Mezzanine Certificates for such

Distribution Date calculated at the Mezzanine Net WAC Pass-Through Rate over

(ii) the amount of interest accrued on the Mezzanine Certificates at the REMIC

Net WAC Pass-Through Rate.

"Excess Net WAC Rate Reserve Fund": As defined in Section [ ].

"Excess Overcollateralized Amount": With respect to the Class

A Certificates and the Mezzanine Certificates and any Distribution Date, the

excess, if any, of (i) the Overcollateralized Amount for such Distribution Date

over (ii) the Overcollateralization Target Amount for such Distribution Date.

"Excess REMIC Net WAC Pass-Through Rate Amount": For any

Distribution Date and the Mezzanine Certificates, the positive excess, if any,

of (i) the amount of interest accrued on the Mezzanine Certificates for such

Distribution Date calculated at the REMIC Net WAC Pass-Through Rate over (ii)

the amount of interest accrued on the Mezzanine Certificates at the Mezzanine

Net WAC Pass- Through Rate.

"Expense Adjusted Mortgage Rate": With respect to any Mortgage

Loan (or the related REO Property), as of any date of determination, a per annum

rate of interest equal to the applicable Mortgage Rate thereon as of the first

day of the related Due Period minus the sum of (i) the Administration Fee Rate

and (ii) the Servicing Fee Rate.

"Expense Adjusted Maximum Mortgage Rate": With respect to any

Mortgage Loan (or the related REO Property), as of any date of determination, a

per annum rate of interest equal to the applicable Maximum Mortgage Rate (or the

applicable Mortgage Rate in the case of any Fixed-Rate Mortgage Loan) thereon as

of the first day of the related Due Period minus the sum of (i) the

Administration Fee Rate and (ii) the Servicing Fee Rate.

"Extraordinary Trust Fund Expense": Any amounts reimbursable

to the Trustee or the Trust Administrator, or any director, officer, employee or

agent of the Trustee or the Trust Administrator from the Trust Fund pursuant to

Section 7.02(b), 8.05 or 10.01(c) and any amounts payable from the Distribution

Account in respect of taxes pursuant to Section 10.01(g)(iii).

"Fannie Mae": Fannie Mae, formally known as the Federal

National Mortgage Association, or any successor thereto.

"FDIC": 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, the Depositor or the Servicer pursuant to or as

contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a determination

made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and

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other payments or recoveries which the Servicer, in its reasonable good faith

judgment, expects to be finally recoverable in respect thereof have been so

recovered. The Servicer shall maintain records, prepared by a Servicing Officer,

of each Final Recovery Determination made thereby.

"Fitch": Fitch Ratings, or its successor in interest.

"Fixed-Rate Mortgage Loan": Each of the Mortgage Loans

identified on the Mortgage Loan Schedule as having a fixed Mortgage Rate.

"Formula Rate": For any Distribution Date and the Class A

Certificates, the Mezzanine Certificates and the REMIC I Regular Interests

(other than REMIC I Regular Interest I-LTAA, REMIC I Regular Interest I-LTZZ,

REMIC I Regular Interest II-LTAA, REMIC I Regular Interest II-LTZZ and REMIC I

Regular Interest I-LTP) the lesser of (i) One-Month LIBOR plus the related

Certificate Margin and (ii) the Maximum Cap Rate.

"Freddie Mac": Freddie Mac, formally known as the Federal Home

Loan Mortgage Corporation, or any successor thereto.

"Gross Margin": With respect to each Adjustable-Rate Mortgage

Loan, the fixed percentage set forth in the related Mortgage Note that is added

to the Index on each Adjustment Date in accordance with the terms of the related

Mortgage Note used to determine the Mortgage Rate for such Adjustable-Rate

Mortgage Loan.

"Group I Interest Remittance Amount": For any Distribution

Date, that portion of the Available Distribution Amount for the related

Distribution Date that represents interest received or advanced on the Group I

Mortgage Loans.

"Group I Marker Rate": With respect to the Class CE-I Interest

and any Distribution Date, a per annum rate equal to two (2) times the weighted

average of the REMIC I Remittance Rate for each of the REMIC I Group I Regular

Interests (other than REMIC I Regular Interest I-LTAA and REMIC I Regular

Interest I-LTP), with the rate on each such REMIC I Group I Regular Interest

subject to a cap equal to the related Formula Rate for the purpose of this

calculation for such Distribution Date and with the rate on REMIC I Regular

Interest I-LTZZ subject to a cap of zero for the purpose of this calculation;

provided however, each cap and the REMIC I Remittance Rate shall be multiplied

by a fraction, the numerator of which is the actual number days in the related

Interest Accrual Period and the denominator of which is 30.

"Group I Mortgage Loan": Each Mortgage Loan transferred,

assigned and delivered to the Trustee pursuant to Section 2.01 or Section

2.03(b) of this Agreement, as held from time to time as a part of the Trust

Fund, the Mortgage Loans so held being identified on the Mortgage Loan Schedule.

The Group I Mortgage Loans consist of Mortgage Loans with Principal Balances

that conform to Freddie Mac and Fannie Mae loan limits.

"Group I Net WAC Pass-Through Rate": With respect to each

REMIC I Group I Regular Interest and the Class A-1 Certificates and any

Distribution Date, a rate per annum equal to the product of (x) the weighted

average of the Expense Adjusted Mortgage Rates of the Group I

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Mortgage Loans, weighted based on their Stated Principal Balances as of the

first day of the related Due Period and (y) a fraction, the numerator of which

is 30 and the denominator of which is the actual number of days elapsed in the

related Interest Accrual Period.

"Group I Parity Amount": With respect to any Distribution

Date, the greater of (i) zero and (ii) the excess, if any, of (x) the

Certificate Principal Balance of the Class A-1 Certificates immediately prior to

such Distribution Date over (y) the aggregate Principal Balance of the Group I

Mortgage Loans as of the last day of the related Due Period.

"Group I Principal Distribution Amount": The Group I Principal

Distribution Amount with respect to any Distribution Date is the lesser of (A)

the greatest of (1) the product of (x) the Senior Principal Distribution Amount

for such Distribution Date and (y) a fraction, the numerator of which is the

excess of (i) the aggregate Principal Balance of the Group I Mortgage Loans as

of the first day of the related Due Period, over (ii) the aggregate Principal

Balance of the Group I Mortgage Loans as of the last day of the related Due

Period, and the denominator of which is the excess of (i) the aggregate

Principal Balance of the Mortgage Loans as of the first day of the related Due

Period, over (ii) the aggregate Principal Balance of the Mortgage Loans as of

the last day of the related Due Period, (2) the Group I Parity Amount and (3)

the excess of (i) the Senior Principal Distribution Amount for such Distribution

Date over (ii) the Certificate Principal Balance of the Class A-2 Certificates

immediately prior to the applicable Distribution Date and (B) the Certificate

Principal Balance of the Class A-1 Certificates immediately prior to such

Distribution Date.

"Group II Interest Remittance Amount": For any Distribution

Date, that portion of the Available Distribution Amount for the related

Distribution Date that represents interest received or advanced on the Group II

Mortgage Loans.

"Group II Marker Rate": With respect to the Class CE-II

Interest and any Distribution Date, a per annum rate equal to two (2) times the

weighted average of the REMIC I Remittance Rate for each of the REMIC I Group II

Regular Interests (other than REMIC I Regular Interest II-LTAA), with the rate

on each such REMIC I Group II Regular Interest subject to a cap equal to the

related Formula Rate for the purpose of this calculation for such Distribution

Date and with the rate on REMIC I Regular Interest II-LTZZ subject to a cap of

zero for the purpose of this calculation; provided however, each cap and the

REMIC I Remittance Rate shall be multiplied by a fraction, the numerator of

which is the actual number days in the related Interest Accrual Period and the

denominator of which is 30.

"Group II Mortgage Loan": Each Mortgage Moan transferred,

assigned and delivered to the Trustee pursuant to Section 2.01 or Section

2.03(b) of this Agreement, as held from time to time as a part of the Trust

Fund, the Mortgage Loans so held being identified on the Mortgage Loan Schedule.

The Group II Mortgage Loans consist predominantly of Mortgage Loans with

Principal Balances that do not conform to Freddie Mac or Fannie Mae loan limits.

"Group II Net WAC Pass-Through Rate": With respect to each

REMIC I Group II Regular Interest and the Class A-2 Certificates and any

Distribution Date, a rate per annum equal to the product of (x) the weighted

average of the Expense Adjusted Mortgage Rates of the Group II Mortgage Loans,

weighted based on their Stated Principal Balances as of the first day of the

related

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Due Period and (y) a fraction, the numerator of which is 30 and the denominator

of which is the actual number of days elapsed in the related Interest Accrual

Period.

"Group II Principal Distribution Amount": With respect to any

Distribution Date, the excess of (1) the Senior Principal Distribution Amount

for such Distribution Date over (2) the Group I Principal Distribution Amount

for such Distribution Date.

"Independent": When used with respect to any specified Person,

any such Person who (a) is in fact independent of the Depositor, the Servicer,

the Seller and their respective Affiliates, (b) does not have any direct

financial interest in or any material indirect financial interest in the

Depositor, the Servicer, the Seller or any Affiliate thereof, and (c) is not

connected with the Depositor, the Servicer, the Seller or any Affiliate thereof

as an officer, employee, promoter, underwriter, trustee, trust administrator,

partner, director or Person performing similar functions; provided, however,

that a Person shall not fail to be Independent of the Depositor, the Servicer,

the Seller or any Affiliate thereof merely because such Person is the beneficial

owner of 1% or less of any class of securities issued by the Depositor, the

Servicer, the Seller or any Affiliate thereof, as the case may be.

"Independent Contractor": Either (i) any Person (other than

the Servicer) that would be an "independent contractor" with respect to REMIC I

within the meaning of Section 856(d)(3) of the Code if REMIC I were a real

estate investment trust (except that the ownership tests set forth in that

section shall be considered to be met by any Person that owns, directly or

indirectly, 35% or more of any Class of Certificates), so long as REMIC I does

not receive or derive any income from such Person and provided that the

relationship between such Person and REMIC I is at arm's length, all within the

meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person

(including the Servicer) if the Trustee and the Trust Administrator have

received an Opinion of Counsel to the effect that the taking of any action in

respect of any REO Property by such Person, subject to any conditions therein

specified, that is otherwise herein contemplated to be taken by an Independent

Contractor will not cause such REO Property to cease to qualify as "foreclosure

property" within the meaning of Section 860G(a)(8) of the Code (determined

without regard to the exception applicable for purposes of Section 860D(a) of

the Code), or cause any income realized in respect of such REO Property to fail

to qualify as Rents from Real Property.

"Index": With respect to each Adjustable-Rate Mortgage Loan

and each related Adjustment Date, the index specified in the related Mortgage

Note.

"Insurance Proceeds": Proceeds of any title policy, hazard

policy or other insurance policy covering a Mortgage Loan, to the extent such

proceeds are not to be applied to the restoration of the related Mortgaged

Property or released to the Mortgagor in accordance with the procedures that the

Servicer would follow in servicing mortgage loans held for its own account,

subject to the terms and conditions of the related Mortgage Note and Mortgage.

"Interest Accrual Period": With respect to any Distribution

Date and the Class A Certificates and the Mezzanine Certificates, the period

commencing on the Distribution Date of the month immediately preceding the month

in which such Distribution Date occurs (or, in the case of the first

Distribution Date, commencing on the Closing Date) and ending on the day

preceding such

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Distribution Date. With respect to any Distribution Date and the Class CE-I

Interest, the Class CE-II Interest and the REMIC I Regular Interests, the

one-month period ending on the last day of the calendar month preceding the

month in which such Distribution Date occurs.

"Interest Carry Forward Amount": With respect to any

Distribution Date and the Class A Certificates or the Mezzanine Certificates,

the sum of (i) the amount, if any, by which (a) the Interest Distribution Amount

for such Class of Certificates as of the immediately preceding Distribution Date

exceeded (b) the actual amount distributed on such Class of Certificates in

respect of interest on such immediately preceding Distribution Date, (ii) the

amount of any Interest Carry Forward Amount for such Class of Certificates

remaining unpaid from the previous Distribution Date and (iii) accrued interest

on the sum of (i) and (ii) above calculated at the related Pass-Through Rate for

the most recently ended Interest Accrual Period.

"Interest Determination Date": With respect to the Class A-1

Certificates, and, for purposes of the definition of the Group I Marker Rate and

REMIC I Regular Interest I-LTA and any Interest Accrual Period therefor, the

second London Business Day preceding the commencement of such Interest Accrual

Period. With respect to the Class A-2 Certificates and the Mezzanine

Certificates, and, for purposes of the definition of the Group II Marker Rate

and REMIC I Regular Interest II-LTA-2, REMIC I Regular Interest II-LTM1, REMIC I

Regular Interest II-LTM2, REMIC I Regular II-LTM3, REMIC I Regular II-LTM4 and

REMIC I Regular II-LTM5, and any Interest Accrual Period therefor, the second

London Business Day preceding the commencement of such Interest Accrual Period.

"Interest Distribution Amount": With respect to any

Distribution Date and any Class of Class A Certificates, the aggregate Accrued

Certificate Interest on the Certificates of such Class for such Distribution

Dateand the Interest Carry Forward Amount. With respect to any Distribution Date

and any Class of Mezzanine Certificate and any Class CE Certificate is equal to

(i) the aggregate Accrued Certificate Interest on the Certificates of such Class

for such Distribution Date plus solely for federal income tax purposes (ii) the

amount of the Excess Net WAC Pass-Through Rate Amount, if any, for such

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Distribution Date, and reduced (to not less than zero), in the case of each such

Class, by the amount of the REMIC Net WAC Pass-Through Rate Amount, if any, for

such Distribution Date.

"Interest Remittance Amount": Collectively, the Group I

Interest Remittance Amount and the Group II Interest Remittance Amount.

"Late Collections": With respect to any Mortgage Loan and any

Due Period, all amounts received subsequent to the Determination Date

immediately following such Due Period, whether as late payments of Monthly

Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which

represent late payments or collections of principal and/or interest due (without

regard to any acceleration of payments under the related Mortgage and Mortgage

Note) but delinquent for such Due Period and not previously recovered.

"Liquidation Event": With respect to any Mortgage Loan, any of

the following events: (i) such Mortgage Loan is paid in full; (ii) a Final

Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage

Loan is removed from REMIC I, by reason of its being purchased, sold or replaced

pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.

With respect to any REO Property, either of the following events: (i) a Final

Recovery Determination is made as to such REO Property; or (ii) such REO

Property is removed from REMIC I by reason of its being purchased pursuant to

Section 9.01.

"Liquidation Proceeds": The amount (other than Insurance

Proceeds or amounts received in respect of the rental of any REO Property prior

to REO Disposition) received by the Servicer in connection with (i) the taking

of all or a part of a Mortgaged Property by exercise of the power of eminent

domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan

through a trustee's sale, foreclosure sale or otherwise, or (iii) the

repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant

to or as contemplated by Section 2.03, Section 3.16(c), Section 3.23 or Section

9.01.

"Loan-to-Value Ratio": As of any date of determination, the

fraction, expressed as a percentage, the numerator of which is the principal

balance of the related Mortgage Loan at such date and the denominator of which

is the Value of the related Mortgaged Property.

"London Business Day": Any day on which banks in the City of

London are open and conducting transactions in United States dollars.

"Loss Severity Percentage": With respect to any Distribution

Date, the percentage equivalent of a fraction, the numerator of which is the

amount of Realized Losses incurred on a Mortgage Loan and the denominator of

which is the principal balance of such Mortgage Loan immediately prior to the

liquidation of such Mortgage Loan.

"Maximum Cap Rate": For any Distribution Date and the Class A

Certificates and the Mezzanine Certificates, a per annum rate equal to the

product of (x) the weighted average of the Expense Adjusted Maximum Mortgage

Rates of the Mortgage Loans, weighted based on their Principal Balances

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as of the first day of the related Due Period and (y) a fraction, the numerator

of which is 30 and the denominator of which is the actual number of days elapsed

in the related Interest Accrual Period.

"Maximum I-LTZZ Uncertificated Interest Deferral Amount": With

respect to any Distribution Date, the of (i) accrued interest at the REMIC I

Remittance Rate applicable to REMIC I Regular Interest I-LTZZ for such

Distribution Date on a balance equal to the Uncertificated Balance of REMIC I

Regular Interest I-LTZZ minus the REMIC I Group I Overcollateralization Amount,

in each case for such Distribution Date, over (ii) Uncertificated Interest on

the REMIC I Group I Regular Interests (other than REMIC I Regular Interest

I-LTAA, REMIC I Regular Interest I-LTZZ and REMIC I Regular Interest I-LTP) for

such Distribution Date, with the rate on each REMIC I Group I Regular Interest

subject to a cap equal to the related Formula Rate for the purpose of this

calculation for such Distribution Date; provided however, each cap and the REMIC

I Remittance Rate shall be multiplied by a fraction, the numerator of which is

the actual number days in the related Interest Accrual Period and the

denominator of which is 30.

"Maximum II-LTZZ Uncertificated Interest Deferral Amount":

With respect to any Distribution Date, the of (i) accrued interest at the REMIC

I Remittance Rate applicable to REMIC I Regular Interest II-LTZZ for such

Distribution Date on a balance equal to the Uncertificated Balance of REMIC I

Regular Interest II-LTZZ minus the REMIC I Group II Overcollateralization

Amount, in each case for such Distribution Date, over (ii) Uncertificated

Interest on the REMIC I Group II Regular Interests (other than REMIC I Regular

Interest II-LTAA, and REMIC I Regular Interest II-LTZZ) for such Distribution

Date, with the rate on each REMIC I Group II Regular Interest subject to a cap

equal to the related Formula Rate for the purpose of this calculation for such

Distribution Date; provided however, each cap and the REMIC I Remittance Rate

shall be multiplied by a fraction, the numerator of which is the actual number

days in the related Interest Accrual Period and the denominator of which is 30.

"Maximum Mortgage Rate": With respect to each Adjustable-Rate

Mortgage Loan, the percentage set forth in the related Mortgage Note as the

maximum Mortgage Rate thereunder.

"Mezzanine Certificates": The Class M-1 Certificates, the

Class M-2 Certificates, the Class M-3 Certificates, the Class M-4 Certificates

or the Class M-4 Interest, as applicable and the Class M-5 Certificates or the

Class M-5 Interest, as applicable.

"Mezzanine Net WAC Pass-Through Rate": For any Distribution

Date and the Mezzanine Certificates, a rate per annum (adjusted for the actual

number of days in the related Interest Accrual Period) equal to the Group II Net

WAC Pass-Through Rate less the Mezzanine WAC Adjustment.

"Mezzanine WAC Adjustment": For any Distribution Date, a per

annum rate (adjusted for the actual number of days in the related Interest

Accrual Period) equal to the excess, if any, of (A) the Group II Net WAC

Pass-Through Rate over (B) the sum of (1) the product of (i) the Group I Net WAC

Pass-Through Rate multiplied by (ii) a fraction not to exceed 1.0, the numerator

of which is the amount, if any, that the aggregate Certificate Principal Balance

of the Class A-2 Certificates plus the Mezzanine Certificates immediately prior

to such Distribution Date exceeds the aggregate Principal Balance of the

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Group II Mortgage Loans as of the first day of the related Due Period, and the

denominator of which is the aggregate Certificate Principal Balance of the

Mezzanine Certificates, and (2) the product of (i) the Group II Net WAC

Pass-Through Rate multiplied by (ii) a fraction not to exceed 1.0, the numerator

of which is the amount, if any, that the aggregate Principal Balance of the

Group II Mortgage Loans as of the first day of the related Due Period exceeds

the aggregate Certificate Principal Balance of the Class A-2 Certificates

immediately prior to such Distribution Date and the denominator of which is the

aggregate Certificate Principal Balance of the Mezzanine Certificates.

"Minimum Mortgage Rate": With respect to each Adjustable-Rate

Mortgage Loan, the percentage set forth in the related Mortgage Note as the

minimum Mortgage Rate thereunder.

"Monthly Payment": With respect to any Mortgage Loan, the

scheduled monthly payment of principal and interest on such Mortgage Loan which

is payable by the related Mortgagor from time to time under the related Mortgage

Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or

Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction

in the amount of interest collectible from the related Mortgagor pursuant to the

Relief Act; (b) without giving effect to any extension granted or agreed to by

the Servicer pursuant to Section 3.07 and (c) on the assumption that all other

amounts, if any, due under such Mortgage Loan are paid when due.

"Moody's": Moody's Investors Service, Inc., or its successor

in interest.

"Mortgage": The mortgage, deed of trust or other instrument

creating a first lien or second lien on, or first priority or second priority

security interest in, a Mortgaged Property securing a Mortgage Note.

"Mortgage File": The mortgage documents listed in Section 2.01

pertaining to a particular Mortgage Loan and any additional documents required

to be added to the Mortgage File pursuant to this Agreement.

"Mortgage Loan": Collectively, the Group I Mortgage Loans and

the Group II Mortgage Loans.

"Mortgage Loan Purchase Agreement": The agreement among the

Originator, the Seller and the Depositor, regarding the sale of the Mortgage

Loans by the Seller to the Depositor, substantially in the form of Exhibit D

annexed hereto.

"Mortgage Loan Schedule": As of any date, the list of Mortgage

Loans included in REMIC I on such date, attached hereto as Schedule 1. The

Mortgage Loan Schedule shall set forth the following information with respect to

each Mortgage Loan in each Group:

(i) the Mortgage Loan identifying number;

(ii) the Mortgagor's name;

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(iii) the street address of the Mortgaged Property

including the state and zip code;

(iv) a code indicating whether the Mortgaged Property is

owner-occupied;

(v) the type of Residential Dwelling constituting the

Mortgaged Property;

(vi) the original months to maturity;

(vii) the stated remaining months to maturity from the

Cut-off Date based on the original amortization

schedule;

(viii) the Loan-to-Value Ratio at origination;

(ix) the Mortgage Rate in effect immediately following the

Cut-off Date;

(x) (A) the date on which the first Monthly Payment was

due on the Mortgage Loan and (B) if such date is not

consistent with the Due Date currently in effect,

such Due Date;

(xi) the stated maturity date;

(xii) the amount of the Monthly Payment at origination;

(xiii) the amount of the Monthly Payment due on the first

Due Date after the Cut-off Date;

(xiv) the last Due Date on which a Monthly Payment was

actually applied to the unpaid Stated Principal

Balance;

(xv) the original principal amount of the Mortgage Loan;

(xvi) the principal balance of the Mortgage Loan as of the

close of business on the Cut- off Date;

(xvii) a code indicating the purpose of the Mortgage Loan

(i. e., purchase financing, Rate/Term Refinancing,

Cash-Out Refinancing);

(xviii) with respect to each Adjustable-Rate Mortgage Loan,

the Adjustment Dates, the Gross Margin, the Maximum

Mortgage Rate, the Minimum Mortgage Rate, the

Periodic Rate Cap, the maximum first Adjustment Date

Mortgage Rate adjustment and the first Adjustment

Date immediately following the Cut-off Date;

(xix) the Mortgage Rate at origination;

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(xx) a code indicating the documentation program (i.e.,

Full Documentation, Full- Alternative Documentation,

Lite Documentation, Stated Documentation, No

Income-No Asset, or NINA, Disclosure Documentation

and Express Documentation);

(xxi) the risk grade;

(xxii) the Value of the Mortgaged Property;

(xxiii) the sale price of the Mortgaged Property, if

applicable;

(xxiv) the actual unpaid principal balance of the Mortgage

Loan as of the Cut-off Date;

(xxv) a code indicating the type and term of the related

Prepayment Charge;

(xxvi) with respect to each Adjustable-Rate Mortgage Loan,

the rounding code (i.e., nearest 0.125%, next highest

0.125%);

(xxvii) the program code; and

(xxviii) whether such Mortgage Loan is an Adjustable-Rate

Mortgage Loan or a Fixed- Rate Mortgage Loan.

The Mortgage Loan Schedule shall set forth the following

information with respect to the Mortgage Loans in the aggregate and in each

Group, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current

principal balance of the Mortgage Loans; (3) the weighted average Mortgage Rate

of the Mortgage Loans and (4) the weighted average maturity of the Mortgage

Loans. The Mortgage Loan Schedule shall be amended from time to time by the

Depositor in accordance with the provisions of this Agreement. With respect to

any Qualified Substitute Mortgage Loan, the Cut-off Date shall refer to the

related Cut-off Date for such Mortgage Loan, determined in accordance with the

definition of Cut-off Date herein.

"Mortgage Note": The original executed note or other evidence

of the indebtedness of a Mortgagor under a Mortgage Loan.

"Mortgage Pool": The pool of Mortgage Loans, identified on

Schedule 1 and existing from time to time thereafter, and any REO Properties

acquired in respect thereof.

"Mortgage Rate": With respect to each Mortgage Loan, the

annual rate at which interest accrues on such Mortgage Loan from time to time in

accordance with the provisions of the related Mortgage Note, which rate with

respect to the Adjustable-Rate Mortgage Loans, (A) as of any date of

determination until the first Adjustment Date following the Cut-off Date shall

be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in

effect immediately following the Cut-off Date and (B) as of any date of

determination thereafter shall be the rate as adjusted on the most recent

Adjustment Date

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equal to the sum, rounded as provided in the Mortgage Note, of the Index, as

most recently available as of a date prior to the Adjustment Date as set forth

in the related Mortgage Note, plus the related Gross Margin; provided that the

Mortgage Rate on such Adjustable-Rate Mortgage Loan on any Adjustment Date shall

never be more than the lesser of (i) the sum of the Mortgage Rate in effect

immediately prior to the Adjustment Date plus the related Periodic Rate Cap, if

any, and (ii) the related Maximum Mortgage Rate, and shall never be less than

the greater of (i) the Mortgage Rate in effect immediately prior to the

Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum

Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property,

as of any date of determination, the annual rate determined in accordance with

the immediately preceding sentence as of the date such Mortgage Loan became an

REO Property.

"Mortgaged Property": The underlying property securing a

Mortgage Loan, including any REO Property, consisting of an Estate in Real

Property improved by a Residential Dwelling.

"Mortgagor": The obligor on a Mortgage Note.

"Net Monthly Excess Cashflow": With respect to any

Distribution Date, the sum of (i) any Overcollateralization Reduction Amount for

such Distribution Date and (ii) the excess of (x) the Available Distribution

Amount for such Distribution Date over (y) the sum for such Distribution Date of

(A) the Senior Interest Distribution Amount payable to the holders of the Class

A Certificates and the Interest Distribution Amount payable to the holders of

the Mezzanine Certificates and (B) the Principal Remittance Amount.

"Net Mortgage Rate": With respect to any Mortgage Loan (or the

related REO Property) as of any date of determination, a per annum rate of

interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus

the Servicing Fee Rate.

"Net WAC Pass-Through Rate": With respect to each REMIC I

Regular Interest, the Class A Certificates and the Mezzanine Certificates and

any Distribution Date, (i) with respect to the Class A-1 Certificates, the Group

I Net WAC Pass-Through Rate, (ii) with respect to the Class A-2 Certificates,

the Group II Net WAC Pass-Through Rate or (iii) with respect to the Mezzanine

Certificates, the Mezzanine Net WAC Pass-Through Rate.

"Net WAC Rate Carryover Amount": With respect to any Class of

the Class A Certificates and the Mezzanine Certificates and any Distribution

Date, the sum of (A) the positive excess of (i) the amount of interest accrued

on such Class of Certificates for such Distribution Date calculated at the

related Formula Rate for such Distribution Date over (ii) the amount of interest

accrued on such Class of Certificates at the applicable Net WAC Pass-Through

Rate for such Distribution Date and (B) the related Net WAC Rate Carryover

Amount for the previous Distribution Date not previously paid, together with

interest thereon at a rate equal to the related Formula Rate for such Class of

Certificates for such Distribution Date.

"Net Wac Rate Carryover Reserve Account": As defined in

Section 3.27.

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<PAGE>

"New Lease": Any lease of REO Property entered into on behalf

of REMIC I, including any lease renewed or extended on behalf of REMIC I, if

REMIC I has the right to renegotiate the terms of such lease.

"Nonrecoverable Advance": Any Advance previously made or

proposed to be made in respect of a Mortgage Loan or REO Property that, in the

good faith business judgment of the Servicer, will not or, in the case of a

proposed Advance, would not be ultimately recoverable from related Late

Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or

REO Property as provided herein.

"Nonrecoverable Servicing Advance": Any Servicing Advance

previously made or proposed to be made in respect of a Mortgage Loan or REO

Property that, in the good faith business judgment of the Servicer, will not or,

in the case of a proposed Servicing Advance, would not be ultimately recoverable

from related Late Collections, Insurance Proceeds or Liquidation Proceeds on

such Mortgage Loan or REO Property as provided herein.

"Non-United States Person": Any Person other than a United

States Person.

"Notional Amount": With respect to the Class CE-I Interest and

any Distribution Date, the aggregate Uncertificated Balance of the REMIC I Group

I Regular Interests for such Distribution Date. With respect to the Class CE-II

Interest and any Distribution Date, the aggregate Uncertificated Balance of the

REMIC I Group II Regular Interests for such Distribution Date.

"Officers' Certificate": A certificate signed by the Chairman

of the Board, the Vice Chairman of the Board, the President or a vice president

(however denominated), and by the Treasurer, the Secretary, or one of the

assistant treasurers or assistant secretaries of the Servicer, the Seller or the

Depositor, as applicable.

"One-Month LIBOR": With respect to the Class A Certificates,

the Mezzanine Certificates, and for purposes of the definition of Group I Marker

Rate, Group II Marker Rate, REMIC I Regular Interest I-LTA-1, REMIC I Regular

Interest II-LTA-2, REMIC I Regular Interest II-LTM1, REMIC I Regular Interest

II-LTM2, REMIC I Regular Interest II-LTM3, REMIC I Regular Interest II-LTM4 and

REMIC I Regular Interest II-LTM5 and any Interest Accrual Period therefor, the

rate determined by the Trust Administrator on the related Interest Determination

Date on the basis of the offered rate for one- month U. S. dollar deposits, as

such rate appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such

Interest Determination Date; provided that if such rate does not appear on

Telerate Page 3750, the rate for such date will be determined on the basis of

the offered rates of the Reference Banks for one- month U. S. dollar deposits,

as of 11: 00 a. m. (London time) on such Interest Determination Date. In such

event, the Trust Administrator will request the principal London office of each

of the Reference Banks to provide a quotation of its rate. If on such Interest

Determination Date, two or more Reference Banks provide such offered quotations,

One-Month LIBOR for the related Interest Accrual Period shall be the arithmetic

mean of such offered quotations (rounded upwards if necessary to the nearest

whole multiple of 1/16%). If on such Interest Determination Date, fewer than two

Reference Banks provide such offered

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quotations, One-Month LIBOR for the related Interest Accrual Period shall be the

higher of (i) LIBOR as determined on the previous Interest Determination Date

and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the

priorities described above, LIBOR for an Interest Determination Date would be

based on LIBOR for the previous Interest Determination Date for the third

consecutive Interest Determination Date, the Trust Administrator shall select an

alternative comparable index (over which the Trust Administrator has no

control), used for determining one-month Eurodollar lending rates that is

calculated and published (or otherwise made available) by an independent party.

"Opinion of Counsel": A written opinion of counsel, who may,

without limitation, be salaried counsel for the Depositor or the Servicer,

acceptable to the Trustee, if such opinion is delivered to the Trustee, or

acceptable to the Trust Administrator, if such opinion is delivered to the Trust

Administrator, except that any opinion of counsel relating to (a) the

qualification of any Trust REMIC as a REMIC or (b) compliance with the REMIC

Provisions must be an opinion of Independent counsel.

"Original Mortgage Loan": Any of the Mortgage Loans included

in REMIC I as of the Closing Date.

"Originator": WMC Mortgage Corp. or its successor in interest,

in its capacity as originator under the Mortgage Loan Purchase Agreement.

"Overcollateralization Increase Amount": With respect to any

Distribution Date, the amount, if any, by which the Overcollateralization Target

Amount exceeds the Overcollateralized Amount on such Distribution Date

(calculated for this purpose only after taking into account the distribution of

the Principal Remittance Amount on such Distribution Date).

"Overcollateralization Reduction Amount": With respect to any

Distribution Date, an amount equal to the lesser of (a) the Principal Remittance

Amount on such Distribution Date and (b) the excess, if any, of (i) the

Overcollateralized Amount for such Distribution Date (calculated for this

purpose only after assuming that 100% of the Principal Remittance Amount on such

Distribution Date have been distributed) over (ii) the Overcollateralization

Target Amount for such Distribution Date.

"Overcollateralization Target Amount": With respect to any

Distribution Date, (i) prior to the Stepdown Date, an amount equal to

$6,072,271, (ii) on or after the Stepdown Date provided a Trigger Event is not

in effect, the greater of (x) 2.50% of the then current aggregate outstanding

principal balance of the mortgage loans as of the last day of the related Due

Period (after giving effect to scheduled payments of principal due during the

related Due Period, to the extent received or advanced, and unscheduled

collections of principal received during the related Prepayment Period) and (y)

$2,428,702, or (iii) on or after the Stepdown Date and if a Trigger Event is in

effect, the Overcollateralization Target Amount for the immediately preceding

Distribution Date.

"Overcollateralized Amount": With respect to any Distribution

Date, the excess, if any, of (a) the aggregate Stated Principal Balances of the

Mortgage Loans and REO Properties as of the last day of the related Due Period

(after giving effect to scheduled payments of principal due during the related

due

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period, to the extent received or advanced, and unscheduled collections of

principal received during the related Prepayment Period) over (b) the sum of the

aggregate Certificate Principal Balances of the Class A Certificates, the

Mezzanine Certificates and the Class P Certificates after giving effect to

distributions to be made on such Distribution Date.

"Ownership Interest": As to any Certificate, any ownership or

security interest in such Certificate, including any interest in such

Certificate as the Holder thereof and any other interest therein, whether direct

or indirect, legal or beneficial, as owner or as pledgee.

"Pass-Through Rate": With respect to the Class A Certificates

and the Mezzanine Certificates and any Distribution Date, a rate per annum equal

to the lesser of (i) the related Formula Rate for such Distribution Date and

(ii) the Net WAC Pass-Through Rate for such Distribution Date. With respect to

the Class CE Interest and any Distribution Date, a rate per annum equal to the

percentage equivalent of a fraction, the numerator of which is the sum of the

amounts calculated pursuant to clauses (A) through (H) below, and the

denominator of which is the Uncertificated Balance of the REMIC I Regular

Interests. For purposes of calculating the Pass-Through Rate for the Class CE-I

Interest, the numerator is equal to the sum of the following components:

(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest I- LTAA minus the Group I Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest I-LTAA;

(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest I- LTA-1 minus the Group I Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest I-LTA-1;

(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest I- LTZZ minus the Group I Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest I-LTZZ; and

(D) 100% of the interest on REMIC I Regular Interest I-LTP.

For purposes of calculating the Pass-Through Rate for the Class CE-II Interest,

the numerator is equal to the sum of the following components:

(A) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTAA minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTAA;

(B) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTA-2 minus the Group II Marker Rate, applied to

an amount equal to the Uncertificated Principal Balance of REMIC I

Regular Interest II-LTA-2;

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<PAGE>

(C) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTM1 minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTM1;

(D) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTM2 minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTM2;

(E) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTM3 minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTM3;

(F) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTM4 minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTM4;

(G) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTM5 minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTM5; and

(H) the Uncertificated REMIC I Pass-Through Rate for REMIC I

Regular Interest II- LTZZ minus the Group II Marker Rate, applied to an

amount equal to the Uncertificated Principal Balance of REMIC I Regular

Interest II-LTZZ; and

With respect to the Class CE Certificates, 100% of the

interest payable to the Class CE-I Interest and Class CE-II Interest.

"Percentage Interest": With respect to any Class of

Certificates (other than the Residual Certificates), the undivided percentage

ownership in such Class evidenced by such Certificate, expressed as a

percentage, the numerator of which is the initial Certificate Principal Balance

or Notional Amount represented by such Certificate and the denominator of which

is the aggregate initial Certificate Principal Balance or initial Notional

Amount of all of the Certificates of such Class. The Class A Certificates and

the Mezzanine Certificates are issuable only in minimum Percentage Interests

corresponding to minimum initial Certificate Principal Balances of $100,000 and

integral multiples of $1.00 in thereof. The Class P Certificates are issuable

only in Percentage Interests corresponding to initial Certificate Principal

Balances of $20 and integral multiples thereof. The Class CE Certificates are

issuable only in minimum Percentage Interests corresponding to minimum initial

Certificate Principal Balances of $100,000 and integral multiples of $1.00 in

thereof; provided, however, that a single Certificate of each such Class of

Certificates may be issued having a Percentage Interest corresponding to the

remainder of the aggregate initial Certificate Principal Balance or Notional

Amount of such Class or to an otherwise authorized denomination for such Class

plus such remainder. With respect to any Residual Certificate, the undivided

percentage ownership in such Class evidenced by such Certificate, as set forth

on the face of such Certificate. The Residual Certificates are issuable in

Percentage Interests of 20% and multiples thereof.

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<PAGE>

"Periodic Rate Cap": With respect to each Adjustable-Rate

Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth

in the related Mortgage Note, which is the maximum amount by which the Mortgage

Rate for such Mortgage Loan may increase or decrease (without regard to the

Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from

the Mortgage Rate in effect immediately prior to such Adjustment Date.

"Permitted Investments": Any one or more of the following

obligations or securities acquired at a purchase price of not greater than par,

regardless of whether issued by the Depositor, the Servicer, the Trustee, the

Trust Administrator 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 issued by, any Depository Institution;

(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 each

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 each 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 that have been rated "AAA" by

Fitch (if rated by Fitch) and "AAAm" or "AAAm-G" by S&P or "Aaa" by

Moody's Investors Service, Inc.; and

(viii) if previously confirmed in writing to the Trustee and

the Trust Administrator, any other demand, money market or time

deposit, or any other obligation, security or investment, as may be

acceptable to the Rating Agencies as a permitted investment of funds

backing securities having ratings equivalent to its highest initial

rating of the Class A Certificates;

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% of the yield to maturity at par of the underlying obligations.

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"Permitted Transferee": Any Transferee of a Residual

Certificate other than a Disqualified Organization or Non-United States Person.

"Person": Any individual, corporation, partnership, limited

liability company, joint venture, association, joint-stock company, trust,

unincorporated organization or government or any agency or political subdivision

thereof.

"Plan": Any employee benefit plan or certain other retirement

plans and arrangements, including individual retirement accounts and annuities,

Keogh plans and bank collective investment funds and insurance company general

or separate accounts in which such plans, accounts or arrangements are invested,

that are subject to ERISA and Section 4975 of the Code.

"Prepayment Assumption": A prepayment rate for the Mortgage

Loans of [__]% CPR. The Prepayment Assumption is used solely for determining the

accrual of original issue discount on the Certificates for federal income tax

purposes. A CPR (or Constant Prepayment Rate) represents an annualized constant

assumed rate of prepayment each month of a pool of mortgage loans relative to

its outstanding principal balance for the life of such pool.

"Prepayment Charge": With respect to any Prepayment Period,

any prepayment premium, penalty or charge payable by a Mortgagor in connection

with any Principal Prepayment on a Mortgage Loan pursuant to the terms of the

related Mortgage Note (other than any Servicer Prepayment Charge Payment

Amount).

"Prepayment Interest Shortfall": With respect to any

Distribution Date, for each Mortgage Loan that was during the related Prepayment

Period the subject of a Principal Prepayment in full or in part that was applied

by the Servicer to reduce the outstanding principal balance of such loan on a

date preceding the Due Date in the succeeding Prepayment Period, an amount equal

to interest at the applicable Net Mortgage Rate on the amount of such Principal

Prepayment for the number of days commencing on the date on which the prepayment

is applied and ending on the last day of the related Prepayment Period. The

obligations of the Servicer in respect of any Prepayment Interest Shortfall are

set forth in Section 3.24.

"Prepayment Period": With respect to any Distribution Date,

the calendar month preceding the calendar month in which such Distribution Date

occurs.

"Principal Balance": As to any Mortgage Loan other than a

Liquidated Mortgage Loan, and any day, the related Stated Principal Balance as

of the Cut-off Date, MINUS all collections credited against the Principal

Balance of any such Mortgage Loan. For purposes of this definition, a Liquidated

Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal

Balance of the related Mortgage Loan as of the final recovery of related

Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO

Property and any day, the Principal Balance of the related Mortgage Loan

immediately prior to such Mortgage Loan becoming REO Property minus any REO

Principal Amortization received with respect thereto on or prior to such day.

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<PAGE>

"Principal Distribution Amount ": With respect to any

Distribution Date, the sum of:

(i) the principal portion of each Monthly Payment on the

Mortgage Loans due during the related Due Period, received or advanced

on or prior to the related Determination Date;

(ii) the Stated Principal Balance of any Mortgage Loan that

was purchased during the related Prepayment Period pursuant to or as

contemplated by Section 2.03, Section 3.16(c) or Section 9.01 and the

amount of any shortfall deposited in the Collection Account in

connection with the substitution of a Deleted Mortgage Loan pursuant to

Section 2.03 during the related Prepayment Period (other than

Prepayment Charges);

(iii) the principal portion of all other unscheduled

collections (including, without limitation, Principal Prepayments,

Insurance Proceeds, Liquidation Proceeds and REO Principal

Amortization) received with respect to the Mortgage Loans during the

related Prepayment Period; and

(iv) the amount of any Overcollateralization Increase Amount

for such Distribution Date;

minus:

(v) the amount of any Overcollateralization Reduction Amount

for such Distribution Date.

"Principal Prepayment": Any payment of principal made by the

Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due

Date and which is not accompanied by an amount of interest representing the full

amount of scheduled interest due on any Due Date in any month or months

subsequent to the month of prepayment.

"Principal Remittance Amount": The sum of the amounts set

forth in (i) through (iii) of the definition of Principal Distribution Amount.

"Private Certificates": As defined in Section 5.02(b).

"PTCE": A Prohibited Transaction Class Exemption issued by the

United States Department of Labor which provides that exemptive relief is

available to any party to any transaction which satisfies the conditions of the

exemption.

"Purchase Price": With respect to any Mortgage Loan or REO

Property to be purchased pursuant to or as contemplated by Section 2.03, Section

3.16(c) or Section 9.01, and as confirmed by a certification from a Servicing

Officer to the Trustee and the Trust Administrator, an amount equal to the sum

of (i) 100% of the Stated Principal Balance thereof as of the date of purchase

(or such other price as provided in Section 9.01), (ii) in the case of (x) a

Mortgage Loan, accrued interest on such Stated Principal

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Balance at the applicable Net Mortgage Rate in effect from time to time from the

Due Date as to which interest was last covered by a payment by the Mortgagor or

an Advance by the Servicer, which payment or Advance had as of the date of

purchase been distributed pursuant to Section 4.01, through the end of the

calendar month in which the purchase is to be effected and (y) an REO Property,

the sum of (1) accrued interest on such Stated Principal Balance at the

applicable Net Mortgage Rate in effect from time to time from the Due Date as to

which interest was last covered by a payment by the Mortgagor or an Advance by

the Servicer through the end of the calendar month immediately preceding the

calendar month in which such REO Property was acquired, plus (2) REO Imputed

Interest for such REO Property for each calendar month commencing with the

calendar month in which such REO Property was acquired and ending with the

calendar month in which such purchase is to be effected, net of the total of all

net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as

of the date of purchase had been distributed as or to cover REO Imputed Interest

pursuant to Section 4.01, (iii) any unreimbursed Servicing Advances and Advances

(including Nonrecoverable Advances and Nonrecoverable Servicing Advances) and

any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv)

any amounts previously withdrawn from the Collection Account in respect of such

Mortgage Loan or REO Property pursuant to Section 3.11(a)(ix) and Section

3.16(b), and (v) in the case of a Mortgage Loan required to be purchased

pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the

Servicer, the Trustee or the Trust Administrator in respect of the breach or

defect giving rise to the purchase obligation.

"Qualified Substitute Mortgage Loan": A mortgage loan

substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement

which must, on the date of such substitution, (i) have an outstanding principal

balance, after application of all scheduled payments of principal and interest

due during or prior to the month of substitution, not in excess of the Stated

Principal Balance of the Deleted Mortgage Loan as of the Due Date in the

calendar month during which the substitution occurs, (ii) have a Mortgage Rate

not less than (and not more than one percentage point in excess of) the Mortgage

Rate of the Deleted Mortgage Loan, (iii) with respect to any Adjustable-Rate

Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage

Rate on the Deleted Mortgage Loan, (iv) with respect to any Adjustable-Rate

Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage

Rate of the Deleted Mortgage Loan, (v) with respect to any Adjustable-Rate

Mortgage Loan, have a Gross Margin equal to the Gross Margin of the Deleted

Mortgage Loan, (vi) with respect to any Adjustable-Rate Mortgage Loan, have a

next Adjustment Date not more than two months later than the next Adjustment

Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not

greater than (and not more than one year less than) that of the Deleted Mortgage

Loan, (viii) have the same Due Date as the Due Date on the Deleted Mortgage

Loan, (ix) have a Loan-to-Value Ratio as of the date of substitution equal to or

lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date,

(x) have a risk grading determined by the originator of the Mortgage Loan at

least equal to the risk grading assigned on the Deleted Mortgage Loan and (xi)

conform to each representation and warranty set forth in Section 6 of the

Mortgage Loan Purchase Agreement applicable to the Deleted Mortgage Loan. In the

event that one or more mortgage loans are substituted for one or more Deleted

Mortgage Loans, the amounts described in clause (i) hereof shall be determined

on the basis of aggregate principal balances, the Mortgage Rates described in

clause (ii) hereof shall be determined on the basis of weighted average Mortgage

Rates, the terms described in clause (vii) hereof shall be determined on the

basis of weighted

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average remaining term to maturity, the Loan-to-Value Ratios described in clause

(ix) hereof shall be satisfied as to each such mortgage loan, the risk gradings

described in clause (x) hereof shall be satisfied as to each such mortgage loan

and, except to the extent otherwise provided in this sentence, the

representations and warranties described in clause (xi) hereof must be satisfied

as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case

may be.

"Rate/Term Refinancing": A Refinanced Mortgage Loan, the

proceeds of which are not more than a nominal amount in excess of the existing

first mortgage loan and any subordinate mortgage loan on the related Mortgaged

Property and related closing costs, and were used exclusively (except for such

nominal amount) to satisfy the then existing first mortgage loan and any

subordinate mortgage loan of the Mortgagor on the related Mortgaged Property and

to pay related closing costs.

"Rating Agency or Rating Agencies": Fitch and S&P or their

successors. If such agencies or their successors are no longer in existence,

"Rating Agencies" shall be such nationally recognized statistical rating

agencies, or other comparable Persons, designated by the Depositor, notice of

which designation shall be given to the Trustee, the Trust Administrator and the

Servicer.

"Realized Loss": With respect to each Mortgage Loan as to

which a Final Recovery Determination has been made, an amount (not less than

zero) equal to (i) the unpaid principal balance of such Mortgage Loan as of the

commencement of the calendar month in which the Final Recovery Determination was

made, plus (ii) accrued interest from the Due Date as to which interest was last

paid by the Mortgagor through the end of the calendar month in which such Final

Recovery Determination was made, calculated in the case of each calendar month

during such period (A) at an annual rate equal to the annual rate at which

interest was then accruing on such Mortgage Loan and (B) on a principal amount

equal to the Stated Principal Balance of such Mortgage Loan as of the close of

business on the Distribution Date during such calendar month, plus (iii) any

amounts previously withdrawn from the Collection Account in respect of such

Mortgage Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (iv)

the proceeds, if any, received in respect of such Mortgage Loan during the

calendar month in which such Final Recovery Determination was made, net of

amounts that are payable therefrom to the Servicer with respect to such Mortgage

Loan pursuant to Section 3.11(a)(iii).

With respect to any REO Property as to which a Final Recovery

Determination has been made, an amount (not less than zero) equal to (i) the

unpaid principal balance of the related Mortgage Loan as of the date of

acquisition of such REO Property on behalf of REMIC I, plus (ii) accrued

interest from the Due Date as to which interest was last paid by the Mortgagor

in respect of the related Mortgage Loan through the end of the calendar month

immediately preceding the calendar month in which such REO Property was

acquired, calculated in the case of each calendar month during such period (A)

at an annual rate equal to the annual rate at which interest was then accruing

on the related Mortgage Loan and (B) on a principal amount equal to the Stated

Principal Balance of the related Mortgage Loan as of the close of business on

the Distribution Date during such calendar month, plus (iii) REO Imputed

Interest for such REO Property for each calendar month commencing with the

calendar month in which such REO Property was acquired and ending with the

calendar month in which such Final Recovery Determination was made, plus (iv)

any amounts previously withdrawn from the Collection Account in respect of the

related Mortgage

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Loan pursuant to Section 3.11(a)(ix) and Section 3.16(b), minus (v) the

aggregate of all Advances and Servicing Advances (in the case of Servicing

Advances, without duplication of amounts netted out of the rental income,

Insurance Proceeds and Liquidation Proceeds described in clause (vi) below) made

by the Servicer in respect of such REO Property or the related Mortgage Loan for

which the Servicer has been or, in connection with such Final Recovery

Determination, will be reimbursed pursuant to Section 3.23 out of rental income,

Insurance Proceeds and Liquidation Proceeds received in respect of such REO

Property, minus (vi) the total of all net rental income, Insurance Proceeds and

Liquidation Proceeds received in respect of such REO Property that has been, or

in connection with such Final Recovery Determination, will be transferred to the

Distribution Account pursuant to Section 3.23.

With respect to each Mortgage Loan which has become the

subject of a Deficient Valuation, the difference between the principal balance

of the Mortgage Loan outstanding immediately prior to such Deficient Valuation

and the principal balance of the Mortgage Loan as reduced by the Deficient

Valuation.

With respect to each Mortgage Loan which has become the

subject of a Debt Service Reduction, the portion, if any, of the reduction in

each affected Monthly Payment attributable to a reduction in the Mortgage Rate

imposed by a court of competent jurisdiction. Each such Realized Loss shall be

deemed to have been incurred on the Due Date for each affected Monthly Payment.

"Record Date": With respect to each Distribution Date and any

Book-Entry Certificate, the Business Day immediately preceding such Distribution

Date. With respect to each Distribution Date and any other Certificates,

including any Definitive Certificates, the last Business Day of the month

immediately preceding the month in which such Distribution Date occurs.

"Reference Banks": Bankers Trust Company, Barclays' Bank PLC,

The Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors

in interest; provided, however, that if any of the foregoing banks are not

suitable to serve as a Reference Bank, then any leading banks selected by the

Trust Administrator which are engaged in transactions in Eurodollar deposits in

the international Eurocurrency market (i) with an established place of business

in London, (ii) not controlling, under the control of or under common control

with the Depositor or any Affiliate thereof and (iii) which have been designated

as such by the Trust Administrator.

"Refinanced Mortgage Loan": A Mortgage Loan the proceeds of

which were not used to purchase the related Mortgaged Property.

"Regular Certificate": Any Class A Certificate, Mezzanine

Certificate, Class CE Certificate or Class P Certificate.

"Regular Interest": A "regular interest" in a REMIC within the

meaning of Section 860G(a)(1) of the Code.

"Relief Act": The Soldiers' and Sailors' Civil Relief Act of

1940, as amended.

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"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 calendar month as

a result of the application of the Relief Act.

"REMIC": A "real estate mortgage investment conduit" within

the meaning of Section 860D of the Code.

"REMIC I": The segregated pool of assets subject hereto,

constituting one of the primary trusts created hereby and to be administered

hereunder, with respect to which a REMIC election is to be made, consisting of:

(i) such Mortgage Loans and Prepayment Charges related thereto as from time to

time are subject to this Agreement, together with the Mortgage Files relating

thereto, and together with all collections thereon and proceeds thereof; (ii)

any REO Property, together with all collections thereon and proceeds thereof;

(iii) the Trustee's rights with respect to the Mortgage Loans under all

insurance policies required to be maintained pursuant to this Agreement and any

proceeds thereof; (iv) the Depositor's rights under the Mortgage Loan Purchase

Agreement (including any security interest created thereby); (v) the Collection

Account (other than any amounts representing any Servicer Prepayment Charge

Payment Amount), the Distribution Account (other than any amounts representing

any Servicer Prepayment Charge Payment Amount) and any REO Account, and such

assets that are deposited therein from time to time and any investments thereof,

together with any and all income, proceeds and payments with respect thereto.

Notwithstanding the foregoing, however, REMIC I specifically excludes all

payments and other collections of principal and interest due on the Mortgage

Loans on or before the Cut-off Date, all Prepayment Charges payable in

connection with Principal Prepayments on the Mortgage Loans made before the

Cut-off Date, the Net WAC Rate Carryover Reserve Account and the Excess Net WAC

Rate Reserve Fund.

"REMIC I Group I Interest Loss Allocation Amount": With

respect to any Distribution Date, an amount (subject to adjustment based on the

actual number of days elapsed in the respective Interest Accrual Periods for the

indicated Regular Interests for such Distribution Date) equal to (a) the product

of (i) the aggregate Stated Principal Balance of the Group I Mortgage Loans and

REO Properties then outstanding and (ii) the REMIC I Remittance Rate for REMIC I

Regular Interest I-LTAA minus the Group I Marker Rate, divided by (b) 12.

"REMIC I Group II Interest Loss Allocation Amount": With

respect to any Distribution Date, an amount (subject to adjustment based on the

actual number of days elapsed in the respective Interest Accrual Periods for the

indicated Regular Interests for such Distribution Date) equal to (a) the product

of (i) the aggregate Stated Principal Balance of the Group II Mortgage Loans and

REO Properties then outstanding and (ii) the REMIC I Remittance Rate for REMIC I

Regular Interest II-LTAA minus the Group II Marker Rate, divided by (b) 12.

"REMIC I Group I Overcollateralized Amount": With respect to

any date of determination, (i) 1% of the aggregate Uncertificated Balances of

the REMIC I Group I Regular Interests minus (ii) the aggregate of the

Uncertificated Balances of the REMIC I Group I Regular Interests, in each case

as of such date of determination.

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"REMIC I Group II Overcollateralized Amount": With respect to

any date of determination, (i) 1% of the aggregate Uncertificated Balances of

the REMIC I Group II Regular Interests minus (ii) the aggregate of the

Uncertificated Balances of the REMIC I Group II Regular Interests, in each case

as of such date of determination.

"REMIC I Group I Principal Loss Allocation Amount": With

respect to any Distribution Date, an amount equal to the product of (i) the

aggregate Stated Principal Balance of the Group I Mortgage Loans and REO

Properties then outstanding and (ii) 1 minus a fraction, the numerator of which

is two times the aggregate of the Uncertificated Balances of the REMIC I Group I

Regular Interests (other than REMIC I Regular Interest I-LTZZ and REMIC I

Regular Interest I-LTP) and the denominator of which is the aggregate of the

Uncertificated Balances of the REMIC I Group I Regular Interests (other than

REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTP).

"REMIC I Group II Principal Loss Allocation Amount": With

respect to any Distribution Date, an amount equal to the product of (i) the

aggregate Stated Principal Balance of the Group I Mortgage Loans and REO

Properties then outstanding and (ii) 1 minus a fraction, the numerator of which

is two times the aggregate of the Uncertificated Balances of the REMIC I Group

II Regular Interests (other than REMIC I Regular Interest II-LTZZ) and the

denominator of which is the aggregate of the Uncertificated Balances of the

REMIC I Group II Regular Interests (other than REMIC I Regular Interest

II-LTAA).

"REMIC I Group I Regular Interest": REMIC I Regular Interest

I-LTAA, REMIC I Regular Interest I-LTA-1, REMIC I Regular Interest I-LTZZ and

REMIC I Regular Interest I-LTP.

"REMIC I Group II Regular Interest": REMIC I Regular Interest

II-LTAA, REMIC I Regular Interest II-LTA-2, REMIC I Regular Interest II-LTM1,

REMIC I Regular Interest II-LTM2, REMIC I Regular Interest II-LTM3, REMIC I

Regular Interest II-LTM4, REMIC I Regular Interest II- LTM5 and REMIC I Regular

Interest II-LTZZ.

"REMIC I Regular Interest": Any of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a "regular interest" in REMIC I. Each REMIC I Regular Interest

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time or shall otherwise be entitled to interest as set forth herein, and

shall be entitled to distributions of principal, subject to the terms and

conditions hereof, in an aggregate amount equal to its initial Uncertificated

Balance as set forth in the Preliminary Statement hereto. The designations for

the respective REMIC I Regular Interests are set forth in the Preliminary

Statement hereto.

"REMIC I Regular Interest I-LTAA": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTAA

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

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"REMIC I Regular Interest I-LTA-1": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTA-1

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest I-LTZZ": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTZZ

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest I-LTP": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTP

shall be entitled to any Prepayment Charges collected by the Servicer with

respect to the Mortgage Loans and to a distribution of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest II-LTA-2": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest II-LTA-2

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest II-LTM1": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest II-LTM1

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest II-LTM2": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest II-LTM2

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest II-LTM3": One of the separate

non-certificated beneficial

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ownership interests in REMIC I issued hereunder and designated as a Regular

Interest in REMIC I. REMIC I Regular Interest II-LTM3 shall accrue interest at

the related REMIC I Remittance Rate in effect from time to time, and shall be

entitled to distributions of principal, subject to the terms and conditions

hereof, in an aggregate amount equal to its initial Uncertificated Balance as

set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest II-LTM4": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest II-LTM4

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest II-LTM5": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest II-LTM5

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Regular Interest I-LTZZ": One of the separate

non-certificated beneficial ownership interests in REMIC I issued hereunder and

designated as a Regular Interest in REMIC I. REMIC I Regular Interest I-LTZZ

shall accrue interest at the related REMIC I Remittance Rate in effect from time

to time, and shall be entitled to distributions of principal, subject to the

terms and conditions hereof, in an aggregate amount equal to its initial

Uncertificated Balance as set forth in the Preliminary Statement hereto.

"REMIC I Remittance Rate": With respect to the REMIC I Regular

Interests and any Distribution Date, the related Net WAC Pass-Through Rate.

"REMIC I Group I Overcollateralized Target Amount": 1% of the

Group I Overcollateralization Target Amount.

"REMIC I Group II Required Overcollateralized Amount": 1% of

the Group II Required Overcollateralization Amount.

"REMIC II": The segregated pool of assets consisting of all of

the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit

of the REMIC II Certificates, pursuant to Section 2.09, and all amounts

deposited therein, with respect to which a separate REMIC election is to be

made.

"REMIC II Certificate": Any Class A Certificate, Class M-1

Certificate, Class M-2 Certificate, Class M-3 Certificate or Class R-II

Interest.

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"REMIC II Certificateholder": The Holder of any REMIC II

Certificate.

"REMIC III": The segregated pool of assets consisting of the

Class M-4 Interest conveyed in trust to the Trustee, for the benefit of the

Class M-4 Certificates and all amounts deposited therein, with respect to which

a separate REMIC election is to be made.

"REMIC IV": The segregated pool of assets consisting of the

Class M-5 Interest conveyed in trust to the Trustee, for the benefit of the

Class M-5 Certificates and all amounts deposited therein, with respect to which

a separate REMIC election is to be made.

"REMIC V": The segregated pool of assets consisting of the

Class CE-I Interest and the Class CE-II Interest conveyed in trust to the

Trustee, for the benefit of the Class CE Certificates and all amounts deposited

therein, with respect to which a separate REMIC election is to be made.

"REMIC VI": The segregated pool of assets consisting of the

Class P Interest conveyed in trust to the Trustee, for the benefit of the Class

P Certificates and all amounts deposited therein, with respect to which a

separate REMIC election is to be made.

"REMIC Net WAC Pass-Through Rate": A per annum rate (but not

less than zero) equal to the least of:

(a) the related Formula Rate for the applicable Class of

Certificates;

(b) the Group I Net WAC Pass-Through Rate; and

(c) the Group II Net WAC Pass-Through Rate.

"REMIC Provisions": Provisions of the federal income tax law

relating to real estate mortgage investment conduits, which appear at Section

860A through 860G of the Code, and related provisions, and proposed, temporary

and final regulations and published rulings, notices and announcements

promulgated thereunder, as the foregoing may be in effect from time to time.

"Remittance Report": A report in form and substance acceptable

to the Trust Administrator on an electronic data file or tape prepared by the

Servicer pursuant to Section 4.03 with such additions, deletions and

modifications as agreed to by the Trust Administrator and the Servicer.

"Rents from Real Property": With respect to any REO Property,

gross income of the character described in Section 856(d) of the Code as being

included in the term "rents from real property."

"REO Account": The account or accounts maintained, or caused

to be maintained, by the Servicer in respect of an REO Property pursuant to

Section 3.23.

"REO Disposition": The sale or other disposition of an REO

Property on behalf of REMIC

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I.

"REO Imputed Interest": As to any REO Property, for any

calendar month during which such REO Property was at any time part of REMIC I,

one month's interest at the applicable Net Mortgage Rate on the Stated Principal

Balance of such REO Property (or, in the case of the first such calendar month,

of the related Mortgage Loan, if appropriate) as of the close of business on the

Distribution Date in such calendar month.

"REO Principal Amortization": With respect to any REO

Property, for any calendar month, the excess, if any, of (a) the aggregate of

all amounts received in respect of such REO Property during such calendar month,

whether in the form of rental income, sale proceeds (including, without

limitation, that portion of the Termination Price paid in connection with a

purchase of all of the Mortgage Loans and REO Properties pursuant to Section

9.01 that is allocable to such REO Property) or otherwise, net of any portion of

such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper

operation, management and maintenance of such REO Property or (ii) payable or

reimbursable to the Servicer pursuant to Section 3.23(d) for unpaid Servicing

Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances

and Advances in respect of such REO Property or the related Mortgage Loan, over

(b) the REO Imputed Interest in respect of such REO Property for such calendar

month.

"REO Property": A Mortgaged Property acquired by the Servicer

on behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure, as

described in Section 3.23.

"Request for Release": A release signed by a Servicing

Officer, in the form of Exhibit E-1 or Exhibit E-2 attached hereto.

"Reserve Interest Rate": With respect to any Interest

Determination Date, the rate per annum that the Trust Administrator determines

to be either (i) the arithmetic mean (rounded upwards if necessary to the

nearest whole multiple of 1/16%) of the one-month U. S. dollar lending rates

which New York City banks selected by the Trust Administrator are quoting on the

relevant Interest Determination Date to the principal London offices of leading

banks in the London interbank market or (ii) in the event that the Trust

Administrator can determine no such arithmetic mean, the lowest one-month U. S.

dollar lending rate which New York City banks selected by the Trust

Administrator are quoting on such Interest Determination Date to leading

European banks.

"Residential Dwelling": Any one of the following: (i) an

attached, detached or semi- detached one-family dwelling, (ii) an attached,

detached or semi-detached two-to four-family dwelling, (iii) a one-family

dwelling unit in a Fannie Mae eligible condominium project, or (iv) an attached,

detached or semi-detached one-family dwelling in a planned unit development,

none of which is a co-operative, mobile or manufactured home (as defined in 42

United States Code, Section 5402(6)).

"Residual Certificates": The Class R Certificates and the

Class R-X Certificates.

"Residual Interest": The sole class of "residual interests" in

a REMIC within the meaning

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of Section 860G(a)(2) of the Code.

"Responsible Officer": When used with respect to the Trustee

or the Trust Administrator, the Chairman or Vice Chairman of the Board of

Directors or Trustees, the Chairman or Vice Chairman of the Executive or

Standing Committee of the Board of Directors or Trustees, the President, the

Chairman of the Committee on Trust Matters, any vice president, any assistant

vice president, the Secretary, any assistant secretary, the Treasurer, any

assistant treasurer, the Cashier, any assistant cashier, any trust officer or

assistant trust officer, the Controller and any assistant controller or any

other officer of the Trustee or the Trust Administrator, as the case may be,

customarily performing functions similar to those performed by any of the above

designated officers and, with respect to a particular matter, to whom such

matter is referred because of such officer's knowledge of and familiarity with

the particular subject.

"S&P": Standard & Poor's Ratings Services, a division of the

McGraw-Hill Companies, Inc., or its successor in interest.

"Seller": Salomon Brothers Realty Corp. or its successor in

interest, in its capacity as seller under the Mortgage Loan Purchase Agreement.

"Senior Interest Distribution Amount": With respect to any

Distribution Date, an amount equal to the sum of (i) the Interest Distribution

Amount for such Distribution Date for the Class A Certificates and (ii) the

Interest Carry Forward Amount, if any, for such Distribution Date for the Class

A Certificates.

"Senior Principal Distribution Amount": With respect to any

Distribution Date, (a) prior to the Stepdown Date or during the continuation of

a Trigger Event, 100% of the Principal Distribution Amount and (b) on or after

the Stepdown Date so long as a Trigger Event is not effect, the Class A

Principal Distribution Amount.

"Servicer": Litton Loan Servicing LP or any successor servicer

appointed as herein provided, in its capacity as Servicer hereunder.

"Servicer Assignee": As defined in Section 3.28 hereof.

"Servicer Event of Default": One or more of the events

described in Section 7.01.

"Servicer Prepayment Charge Payment Amount": The amounts

payable by the Servicer in respect of any waived Prepayment Charges pursuant to

Section 3.01.

"Servicer Remittance Date": With respect to any Distribution

Date, by 3:00 p.m. New York time on the Business Day preceding the related

Distribution Date.

"Servicer Termination Trigger": With respect to any

Distribution Date, the Cumulative Realized Losses incurred since the Cut-off

Date through the last day of the related Due Period exceeds the

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applicable percentages set forth below with respect to such Distribution Date:

DISTRIBUTION DATE OCCURRING IN PERCENTAGE

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

October 2002 through September 2006 3.50%

October 2006 through September 2007 5.00%

October 2007 through September 2008 6.25%

October 2008 and September 2009 7.00%

October 2009 and thereafter 7.50%

"Servicing Account": The account or accounts created and

maintained pursuant to Section 3.09.

"Servicing Advances": The reasonable "out-of-pocket" costs and

expenses incurred by the Servicer in connection with a default, delinquency or

other unanticipated event by the Servicer in the performance of its servicing

obligations, including, but not limited to, the cost of (i) the preservation,

restoration and protection of a Mortgaged Property, (ii) any enforcement or

judicial proceedings, including but not limited to foreclosures, 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 Section 3.01, Section 3.09, Section 3.14,

Section 3.16 and Section 3.23. The Servicer shall not be required to make any

Nonrecoverable Servicing Advances.

"Servicing Fee": With respect to each Mortgage Loan and for

any calendar month, an amount equal to the Servicing Fee Rate accrued for one

month (or in the event of any payment of interest which accompanies a Principal

Prepayment in full or in part made by the Mortgagor during such calendar month,

interest for the number of days covered by such payment of interest) on the same

principal amount on which interest on such Mortgage Loan accrues for such

calendar month, calculated on the basis of a 360-day year consisting of twelve

30-day months. A portion of such Servicing Fee may be retained by any

Sub-Servicer as its servicing compensation.

"Servicing Fee Rate": 0.50% per annum.

"Servicing Officer": Any officer of the Servicer involved in,

or responsible for, the administration and servicing of Mortgage Loans, whose

name and specimen signature appear on a list of Servicing Officers furnished by

the Servicer to the Trust Administrator, the Trustee and the Depositor on the

Closing Date, as such list may from time to time be amended.

"Servicing Rights Pledgee": One or more lenders, selected by

the Servicer, to which the Servicer will pledge and assign all of its right,

title and interest in, to and under this Agreement, including Wachovia Bank,

National Association, as the representative of certain lenders.

"Single Certificate": With respect to any Class of

Certificates (other than the Class P Certificates and the Residual

Certificates), a hypothetical Certificate of such Class evidencing a Percentage

Interest for such Class corresponding to an initial Certificate Principal

Balance of $1,000. With respect to

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the Class P Certificates and the Residual Certificates, a hypothetical

Certificate of such Class evidencing a 100% Percentage Interest in such Class.

"Startup Day": With respect to each of REMIC I, REMIC II,

REMIC III, REMIC IV, REMIC V and REMIC VI the day designated as such pursuant to

Section 10.01(b) hereof.

"Stated Principal Balance": With respect to any Mortgage Loan:

(a) as of any date of determination up to but not including the Distribution

Date on which the proceeds, if any, of a Liquidation Event with respect to such

Mortgage Loan would be distributed, the Principal Balance of such Mortgage Loan

as of the Cut-off Date, as shown in the Mortgage Loan Schedule, minus the sum of

(i) the principal portion of each Monthly Payment due on a Due Date subsequent

to the Cut-off Date, to the extent received from the Mortgagor and distributed

pursuant to Section 4.01 on or before such date of determination, (ii) all

Principal Prepayments received after the Cut-off Date, to the extent distributed

pursuant to Section 4.01 on or before such date of determination, (iii) all

Liquidation Proceeds and Insurance Proceeds applied by the Servicer as

recoveries of principal in accordance with the provisions of Section 3.16, to

the extent distributed pursuant to Section 4.01 on or before such date of

determination, and (iv) any Realized Loss incurred with respect thereto as a

result of a Deficient Valuation made during or prior to the Prepayment Period

for the most recent Distribution Date coinciding with or preceding such date of

determination; and (b) as of any date of determination coinciding with or

subsequent to the Distribution Date on which the proceeds, if any, of a

Liquidation Event with respect to such Mortgage Loan would be distributed, zero.

With respect to any REO Property: (a) as of any date of determination up to but

not including the Distribution Date on which the proceeds, if any, of a

Liquidation Event with respect to such REO Property would be distributed, an

amount (not less than zero) equal to the Stated Principal Balance of the related

Mortgage Loan as of the date on which such REO Property was acquired on behalf

of REMIC I, minus the sum of (i) if such REO Property was acquired before the

Distribution Date in any calendar month, the principal portion of the Monthly

Payment due on the Due Date in the calendar month of acquisition, to the extent

distributed pursuant to Section 4.01 on or before such date of determination,

and (ii) the aggregate amount of REO Principal Amortization in respect of such

REO Property for all previously ended calendar months, to the extent distributed

pursuant to Section 4.01 on or before such date of determination; and (b) as of

any date of determination coinciding with or subsequent to the Distribution Date

on which the proceeds, if any, of a Liquidation Event with respect to such REO

Property would be distributed, zero.

"Stayed Funds": If the Servicer is the subject of a proceeding

under the federal Bankruptcy Code and the making of a Remittance (as defined in

Section 7.02(b)) is prohibited by Section 362 of the federal Bankruptcy Code,

funds that are in the custody of the Servicer, a trustee in bankruptcy or a

federal bankruptcy court and should have been the subject of such Remittance

absent such prohibition.

"Stepdown Date": The earlier to occur of (i) the Distribution

Date on which the aggregate Certificate Principal Balance of the Class A

Certificates has been reduced to zero and (ii) the later to occur of (a) the

Distribution Date occurring in October 2005 and (b) the first Distribution Date

on which the Credit Enhancement Percentage (calculated for this purpose only

prior to any distribution of the Principal Distribution Amount to the

Certificates then entitled to distributions of principal on such Distribution

Date) is equal to or greater than 26.00%.

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"Sub-Servicer": Any Person with which the Servicer has entered

into a Sub-Servicing Agreement and which meets the qualifications of a

Sub-Servicer pursuant to Section 3.02.

"Sub-Servicing Agreement": The written contract between the

Servicer and a Sub-Servicer relating to servicing and administration of certain

Mortgage Loans as provided in Section 3.02.

"Substitution Shortfall Amount": As defined in Section

2.03(b).

"Tax Returns": The federal income tax return on Internal

Revenue Service Form 1066, U. S. Real Estate Mortgage Investment Conduit Income

Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest

Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,

to be filed on behalf of the Trust Fund due to the classification of portions

thereof as REMICs under the REMIC Provisions, together with any and all other

information reports or returns that may be required to be furnished to the

Certificateholders or filed with the Internal Revenue Service or any other

governmental taxing authority under any applicable provisions of federal, state

or local tax laws.

"Telerate Page 3750": The display designated as page "3750" on

the Dow Jones Telerate Capital Markets Report (or such other page as may replace

page 3750 on that report for the purpose of displaying London interbank offered

rates of major banks).

"Termination Price": As defined in Section 9.01.

"Terminator": As defined in Section 9.01.

"Transfer": Any direct or indirect transfer, sale, pledge,

hypothecation, or other form of assignment of any Ownership Interest in a

Certificate.

"Transferee": Any Person who is acquiring by Transfer any

Ownership Interest in a Certificate.

"Transferor": Any Person who is disposing by Transfer of any

Ownership Interest in a Certificate.

"Trigger Event": A Trigger Event is in effect if:

(a) the percentage obtained by dividing the principal amount

of (A)(i) Mortgage Loans delinquent 60 days or more, (ii) Mortgage Loans in

foreclosure, (iii) REO Properties and (iv) Mortgage Loans discharged due to

bankruptcy by the aggregate Principal Balance of the Mortgage Loans, in each

case, as of the last day of the previous calendar month, exceeds (B)(i) 50% of

the then current Credit Enhancement Percentage, multiplied by a fraction, the

numerator of which is the aggregate Principal Balance of the Fixed-Rate Mortgage

Loans as of the last day of the related Due Period and the denominator of which

is the aggregate Principal Balance of all of the Mortgage Loans as of the last

day of the related Due Period, plus (ii) 40% of the then current Credit

Enhancement Percentage, multiplied by a

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fraction, the numerator of which is the aggregate Principal Balance of the

Adjustable-Rate Mortgage Loans as of the last day of the related Due Period and

the denominator of which is the aggregate Principal Balance of all of the

Mortgage Loans as of the last day of the related Due Period; or

(b) the aggregate amount of Realized Losses incurred since the

Cut-off Date through the last day of the related Due Period divided by aggregate

Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds the

applicable percentages set forth below with respect to such Distribution Date:

DISTRIBUTION DATE OCCURRING IN PERCENTAGE

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

October 2005 through September 2006 3.50%

October 2006 through September 2007 5.00%

October 2007 through September 2008 6.25%

October 2008 and September 2009 7.00%

October 2009 and thereafter 7.50%

"Trust Administrator": Citibank, N.A., a national banking

association, or its successor in interest, or any successor trust administrator

appointed as herein provided.

"Trust Fund": Collectively, all of the assets of REMIC I,

REMIC II, REMIC III, REMIC IV, REMIC V, REMIC VI, the Net WAC Rate Carryover

Reserve Account, the Excess Net WAC Rate Reserve Fund and the other assets

conveyed by the Depositor to the Trustee pursuant to Section 2.01.

"Trust REMIC": Either REMIC I, REMIC II, REMIC III, REMIC IV,

REMIC V or REMIC VI.

"Trustee": U. S. Bank National Association, a national banking

association, or its successor in interest, or any successor trustee appointed as

herein provided.

"Uncertificated Balance": The amount of any REMIC I Regular

Interest outstanding as of any date of determination. As of the Closing Date,

the Uncertificated Balance of each REMIC I Regular Interest shall equal the

amount set forth in the Preliminary Statement hereto as its initial

uncertificated balance. On each Distribution Date, the Uncertificated Balance of

each REMIC I Regular Interest shall be reduced by all distributions of principal

made on such REMIC I Regular Interest, as applicable, on such Distribution Date

pursuant to Section 4.01 and, if and to the extent necessary and appropriate,

shall be further reduced on such Distribution Date by Realized Losses as

provided in Section 4.04. The Uncertificated Balances of REMIC I Regular

Interest I-LTZZ and REMIC I Regular Interest II-LTZZ shall be increased by

interest deferrals as provided in Section 4.01(a)(1)(A)(I)(i). The

Uncertificated Balance of each REMIC I Regular Interest shall never be less than

zero.

"Uncertificated Interest": With respect to any REMIC I Regular

Interest for any Distribution Date, one month's interest at the REMIC I

Remittance Rate applicable to such REMIC I Regular Interest for such

Distribution Date, accrued on the Uncertificated Balance thereof immediately

prior to such

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Distribution Date. Uncertificated Interest in respect of any REMIC I Regular

Interest shall accrue on the basis of a 360-day year consisting of twelve 30-day

months. Uncertificated Interest with respect to each Distribution Date, as to

any REMIC I Regular Interest, shall be reduced by an amount equal to the sum of

(a) the aggregate Prepayment Interest Shortfall, if any, for such Distribution

Date to the extent not covered by payments pursuant to Section 3.24 and (b) the

aggregate amount of any Relief Act Interest Shortfall, if any allocated, in each

case, to such REMIC I Regular Interest pursuant to Section 1.02. In addition,

Uncertificated Interest with respect to each Distribution Date, as to any REMIC

I Regular Interest shall be reduced by Realized Losses, if any, allocated to

such REMIC I Regular Interest pursuant to Section 1.02 and Section 4.04.

"Underwriters' Exemption": An individual exemption issued by

the United States Department of Labor, Prohibited Transaction Exemption 91-23

(56 Fed. Reg. 15936, April 19, 1991), as amended, to Salomon Smith Barney Inc.

(formerly known as Smith Barney Inc.), for specific offerings in which Salomon

Smith Barney Inc. or any person directly or indirectly, through one or more

intermediaries, controlling, controlled by or under common control with Salomon

Smith Barney Inc. is an underwriter, placement agent or a manager or co-manager

of the underwriting syndicate or selling group where the trust and the offered

certificates meet specified conditions. The Underwriters' Exemption, as amended,

provides a partial exemption for transactions involving certificates

representing a beneficial interest in a trust and entitling the holder to

pass-through payments of principal, interest and/or other payments with respect

to the trust's assets.

"Uninsured Cause": Any cause of damage to a Mortgaged Property

such that the complete restoration of such property is not fully reimbursable by

the hazard insurance policies required to be maintained pursuant to Section

3.14.

"United States Person": A citizen or resident of the United

States, a corporation, partnership or other entity created or organized in, or

under the laws of, the United States, any state thereof or, District of Columbia

(except, in the case of a partnership, to the extent provided in regulations)

provided that, for purposes solely of the restrictions on the transfer of

Residual Certificates, no partnership or other entity treated as a partnership

for United States federal income tax purposes shall be treated as a United

States Person unless all persons that own an interest in such partnership either

directly or through any entity that is not a corporation for United States

federal income tax purposes are required by the applicable operative agreement

to be United States Persons or an estate whose income is subject to United

States federal income tax regardless of its source, or a trust if a court within

the United States is able to exercise primary supervision over the

administration of the trust and one or more United States persons have the

authority to control all substantial decisions of the trust. To the extent

prescribed in regulations by the Secretary of the Treasury, which have not yet

been issued, a trust which was in existence on August 20, 1996 (other than a

trust treated as owned by the grantor under subpart E of part I of subchapter J

of chapter 1 of the Code), and which was treated as a United States person on

August 20, 1996 may elect to continue to be treated as a United States person

notwithstanding the previous sentence. The term "United States" shall have the

meaning set forth in Section 7701 of the Code.

"Value": With respect to any Mortgaged Property, the value

thereof as determined by an

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independent appraisal made at the time of the origination of the related

Mortgage Loan or the sale price, if the appraisal is not available; except that,

with respect to any Mortgage Loan that is a purchase money mortgage loan, the

lesser of (i) the value thereof as determined by an independent appraisal made

at the time of the origination of such Mortgage Loan, if any, and (ii) the sales

price of the related Mortgaged Property.

"Voting Rights": The portion of the voting rights of all of

the Certificates which is allocated to any Certificate. With respect to any date

of determination, 98% of all Voting Rights will be allocated among the holders

of the Class A Certificates, the Mezzanine Certificates and the Class CE

Certificates in proportion to the then outstanding Certificate Principal

Balances of their respective Certificates, 1% of all Voting Rights will be

allocated to the holders of the Class P Certificates and 1% of all Voting Rights

will be allocated among the holders of the Residual Certificates. The Voting

Rights allocated to each Class of Certificate shall be allocated among Holders

of each such Class in accordance with their respective Percentage Interests as

of the most recent Record Date.

SECTION 1.02. Allocation of Certain Interest

Shortfalls.

For purposes of calculating the amount of Accrued Certificate

Interest and the amount of the Interest Distribution Amount for the Class A

Certificates, the Mezzanine Certificates, the Class CE-I Interest and the Class

CE-II Interest for any Distribution Date, (1) the aggregate amount of any

Prepayment Interest Shortfalls (to the extent not covered by payments by the

Servicer pursuant to Section 3.24) and any Relief Act Interest Shortfall

incurred in respect of the Mortgage Loans for any Distribution Date shall be

allocated first, to the Class CE-I Interest and the Class CE-II Interest based

on, and to the extent of, one month's interest at the then applicable respective

Pass-Through Rate on the respective Notional Amount of each such Certificate

and, thereafter, among the Class A Certificates and the Mezzanine Certificates

on a PRO RATA basis based on, and to the extent of, one month's interest at the

then applicable respective Pass-Through Rate on the respective Certificate

Principal Balance of each such Certificate and (2) the aggregate amount of any

Realized Losses incurred for any Distribution Date shall be allocated among the

Class CE-I Interest and the Class CE-II Interest based on, and to the extent of,

one month's interest at the then applicable respective Pass-Through Rate on the

respective Notional Amount of each such Certificate.

For purposes of calculating the amount of Uncertificated

Interest for the REMIC I Group I Regular Interests for any Distribution Date,

the aggregate amount of any Prepayment Interest Shortfalls (to the extent not

covered by payments by the Servicer pursuant to Section 3.24) and any Relief Act

Interest Shortfalls incurred in respect of the Group I Mortgage Loans for any

Distribution Date shall be allocated first, to Uncertificated Interest payable

to REMIC I Regular Interest I-LTAA and REMIC I Regular Interest I-LTZZ up to an

aggregate amount equal to the REMIC I Group I Interest Loss Allocation Amount,

98% and 2%, respectively, and thereafter among REMIC I Regular Interest I-LTAA,

REMIC I Regular Interest I-LTA-1 and REMIC I Regular Interest I-LTZZ PRO RATA

based on, and to the extent of, one month's interest at the then applicable

respective Pass-Through Rate on the respective Uncertificated Balance of each

such REMIC I Group I Regular Interest.

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For purposes of calculating the amount of Uncertificated

Interest for the REMIC I Group II Regular Interests for any Distribution Date,

the aggregate amount of any Prepayment Interest Shortfalls (to the extent not

covered by payments by the Servicer pursuant to Section 3.24) and any Relief Act

Interest Shortfalls incurred in respect of the Group II Mortgage Loans for any

Distribution Date shall be allocated first, to Uncertificated Interest payable

to REMIC I Regular Interest II-LTAA and REMIC I Regular Interest II-LTZZ up to

an aggregate amount equal to the REMIC I Group II Interest Loss Allocation

Amount, 98% and 2%, respectively, and thereafter among REMIC I Regular Interest

II-LTAA, REMIC I Regular Interest II-LTA-2, REMIC I Regular Interest II-LTM1,

REMIC I Regular Interest II- LTM2, REMIC I Regular Interest II-LTM3, REMIC I

Regular Interest II-LTM4, REMIC I Regular Interest II-LTM5 and REMIC I Regular

Interest II-LTZZ PRO RATA based on, and to the extent of, one month's interest

at the then applicable respective Pass-Through Rate on the respective

Uncertificated Balance of each such REMIC I Group II Regular Interest.

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ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;

ORIGINAL ISSUANCE OF CERTIFICATES

SECTION 2.01. Conveyance of the Mortgage Loans.

The Depositor, concurrently with the execution and delivery

hereof, does hereby transfer, assign, set over and otherwise convey to the

Trustee without recourse, for the benefit of the Certificateholders, all the

right, title and interest of the Depositor, including any security interest

therein for the benefit of the Depositor, in and to the Mortgage Loans

identified on the Mortgage Loan Schedule, the rights of the Depositor under the

Mortgage Loan Purchase Agreement, and all other assets included or to be

included in REMIC I. Such assignment includes all interest and principal

received by the Depositor or the Servicer on or with respect to the Mortgage

Loans (other than payments of principal and interest due on such Mortgage Loans

on or before the Cut-off Date). The Depositor herewith delivers to the Trustee

an executed copy of the Mortgage Loan Purchase Agreement.

In connection with such transfer and assignment, the Depositor

does hereby deliver to, and deposit with, the Trustee, the following documents

or instruments with respect to each Mortgage Loan so transferred and assigned (a

"Mortgage File"):

(i) the original Mortgage Note, endorsed in blank or in the

following form: "Pay to the order of U. S. Bank National Association,

as Trustee under the applicable agreement, without recourse," with all

prior and intervening endorsements showing a complete chain of

endorsement from the originator to the Person so endorsing to the

Trustee;

(ii) the original Mortgage with evidence of recording thereon,

and the original recorded power of attorney, if the Mortgage was

executed pursuant to a power of attorney, with evidence of recording

thereon;

(iii) an original Assignment in blank;

(iv) the original recorded Assignment or Assignments showing a

complete chain of assignment from the originator to the Person

assigning the Mortgage to the Trustee as contemplated by the

immediately preceding clause (iii);

(v) the original or copies of each assumption, modification,

written assurance or substitution agreement, if any; and

(vi) the original lender's title insurance policy (except with

respect to any Mortgage Loan originated with a Principal Balance of

$150,000 or less), together with all endorsements or riders that were

issued with or subsequent to the issuance of such policy, insuring the

priority of the Mortgage as a first lien on the Mortgaged Property

represented therein as a fee interest vested in

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the Mortgagor, or in the event such original title policy is

unavailable, a written commitment or uniform binder or preliminary

report of title issued by the title insurance or escrow company.

The Trustee, at the expense of the Originator, shall promptly

(within sixty Business Days following the later of the Closing Date and the date

of receipt by the Trustee of the recording information for a Mortgage, but in no

event later than ninety days following the Closing Date) submit or cause to be

submitted for recording, at no expense to the Trust Fund, the Trustee, the Trust

Administrator, the Servicer or the Depositor, in the appropriate public office

for real property records, each Assignment referred to in Sections 2.01(iii) and

(iv) above and the Depositor shall execute each original Assignment in the

following form: "U. S. Bank National Association, as Trustee under the

applicable agreement." In the event that any such Assignment is lost or returned

unrecorded because of a defect therein, the Originator shall promptly prepare or

cause to be prepared a substitute Assignment or cure or cause to be cured such

defect, as the case may be, and thereafter cause each such Assignment to be duly

recorded. If the Originator is unable to pay the cost of recording the

Assignments, such expense will be paid by the Trust Administrator and shall be

reimbursable to the Trust Administrator as an Extraordinary Trust Fund Expense.

With respect to a maximum of 2.0% of the Original Mortgage

Loans, by outstanding principal balance of the Original Mortgage Loans as of the

Cut-off Date, if any original Mortgage Note referred to in Section 2.01(i) above

cannot be located, the obligations of the Depositor to deliver such documents

shall be deemed to be satisfied upon delivery to the Trustee of a photocopy of

such Mortgage Note, if available, with a lost note affidavit substantially in

the form of Exhibit K attached hereto. If any of the original Mortgage Notes for

which a lost note affidavit was delivered to the Trustee is subsequently

located, such original Mortgage Note shall be delivered to the Trustee within

three Business Days.

If any of the documents referred to in Sections 2.01(ii),

(iii) or (iv) above has, as of the Closing Date, been submitted for recording

but either (x) has not been returned from the applicable public recording office

or (y) has been lost or such public recording office has retained the original

of such document, the obligations of the Depositor to deliver such documents

shall be deemed to be satisfied upon (1) delivery to the Trustee of a copy of

each such document certified by the Originator in the case of (x) above or the

applicable public recording office in the case of (y) above to be a true and

complete copy of the original that was submitted for recording and (2) if such

copy is certified by the Originator, delivery to the Trustee promptly upon

receipt thereof of either the original or a copy of such document certified by

the applicable public recording office to be a true and complete copy of the

original. Notice shall be provided to the Trustee, the Trust Administrator and

the Rating Agencies by the Seller if delivery pursuant to clause (2) above will

be made more than 180 days after the Closing Date. If the original lender's

title insurance policy was not delivered pursuant to Section 2.01(vi) above, the

Depositor shall deliver or cause to be delivered to the Trustee, promptly after

receipt thereof, the original lender's title insurance policy. The Depositor

shall deliver or cause to be delivered to the Trustee promptly upon receipt

thereof any other original documents constituting a part of a Mortgage File

received with respect to any Mortgage Loan, including, but not limited to, any

original documents evidencing an assumption or modification of any Mortgage

Loan.

All original documents relating to the Mortgage Loans that are

not delivered to the Trustee

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are and shall be held by the Seller, the Depositor or the Servicer, as the case

may be, in trust for the benefit of the Trustee on behalf of the

Certificateholders. In the event that any such original document is required

pursuant to the terms of this Section to be a part of a Mortgage File, such

document shall be delivered promptly to the Trustee. Any such original document

delivered to or held by the Depositor that is not required pursuant to the terms

of this Section to be a part of a Mortgage File, shall be delivered promptly to

the Servicer.

The Depositor herewith delivers to the Trustee and the Trust

Administrator an executed copy of the Mortgage Loan Purchase Agreement.

SECTION 2.02. Acceptance of REMIC I by Trustee.

The Trustee, acknowledges receipt, subject to the provisions

of Section 2.01 and subject to any exceptions noted on the exception report

described in the next paragraph below, the documents referred to in Section 2.01

(other than such documents described in Section 2.01(v)) above and all other

assets included in the definition of "REMIC I" under clauses (i), (iii), (iv)

and (v) (to the extent of amounts attributable thereto deposited into the

Distribution Account) and declares that it holds and will hold such documents

and the other documents delivered to it constituting a Mortgage File, and that

it holds or will hold all such assets and such other assets included in the

definition of "REMIC I" in trust for the exclusive use and benefit of all

present and future Certificateholders.

The Trustee agrees, for the benefit of the Certificateholders,

to review each Mortgage File on or before the Closing Date and to certify in

substantially the form attached hereto as Exhibit C-1 that, as to each Mortgage

Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in

full or any Mortgage Loan specifically identified in the exception report

annexed thereto as not being covered by such certification), (i) all documents

constituting part of such Mortgage File (other than such documents described in

Section 2.01(v)) required to be delivered to it pursuant to this Agreement are

in its possession, (ii) such documents have been reviewed by it and appear

regular on their face and relate to such Mortgage Loan and (iii) based on its

examination and only as to the foregoing, the information set forth in the

Mortgage Loan Schedule that corresponds to items (i) through (iii), (vi),

(x)(A), (xi), (xii), (xv), (xvii), (xviii), (xx) through (xxiii) and (xxv) of

the definition of "Mortgage Loan Schedule" accurately reflects information set

forth in the Mortgage File. It is herein acknowledged that, in conducting such

review, the Trustee was under no duty or obligation (i) to inspect, review or

examine any such documents, instruments, certificates or other papers to

determine whether they are genuine, enforceable, or appropriate for the

represented purpose or whether they have actually been recorded or that they are

other than what they purport to be on their face or (ii) to determine whether

any Mortgage File should include any of the documents specified in clause (v) of

Section 2.01.

Prior to the first anniversary date of this Agreement, the

Trustee shall deliver to the Depositor, the Servicer and the Trust Administrator

a final certification in the form annexed hereto as Exhibit C-2 evidencing the

completeness of the Mortgage Files, with any applicable exceptions noted

thereon, and the Servicer shall forward a copy thereof to any Sub-Servicer.

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If in the process of reviewing the Mortgage Files and making

or preparing, as the case may be, the certifications referred to above, the

Trustee finds any document or documents constituting a part of a Mortgage File

to be missing or defective in any material respect, at the conclusion of its

review the Trustee shall so notify the Depositor, the Servicer and the Trust

Administrator. In addition, upon the discovery by the Depositor, the Servicer,

the Trust Administrator or the Trustee of a breach of any of the representations

and warranties made by the Originator or the Seller in the Mortgage Loan

Purchase Agreement in respect of any Mortgage Loan which materially adversely

affects such Mortgage Loan or the interests of the Certificateholders in such

Mortgage Loan, the party discovering such breach shall give prompt written

notice to the other parties.

The Trustee shall, at the written request and expense of any

Certificateholder, provide a written report to such Certificateholder of all

Mortgage Files released to the Servicer for servicing purposes.

SECTION 2.03. Repurchase or Substitution of

Mortgage Loans by the Originator and

the Seller.

(a) Upon discovery or receipt of notice of any materially

defective document in, or that a document is missing from, a Mortgage File or of

the breach by the Originator or the Seller of any representation, warranty or

covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage

Loan that materially adversely affects the value of such Mortgage Loan or the

interest therein of the Certificateholders, the Trustee shall promptly notify

the Seller, the Originator, the Servicer and the Trust Administrator of such

defect, missing document or breach and request that the Originator or the

Seller, as applicable, deliver such missing document or cure such defect or

breach within 60 days from the date the Originator or the Seller, as applicable,

was notified of such missing document, defect or breach, and if the Originator

or the Seller, as applicable, does not deliver such missing document or cure

such defect or breach in all material respects during such period, the Servicer,

in accordance with Section 3.02(b), shall enforce the obligations of the

Originator or the Seller, as applicable, under the Mortgage Loan Purchase

Agreement to repurchase such Mortgage Loan from REMIC I at the Purchase Price

within 90 days after the date on which the Originator or the Seller, as

applicable, was notified (subject to Section 2.03(c)) of such missing document,

defect or breach, if and to the extent that the Originator or the Seller is

obligated to do so under the Mortgage Loan Purchase Agreement. The Purchase

Price for the repurchased Mortgage Loan shall be deposited in the Collection

Account and the Trustee, upon receipt of written certification from the Servicer

of such deposit, shall release to the Originator or the Seller, as applicable,

the related Mortgage File and the Trustee shall execute and deliver such

instruments of transfer or assignment, in each case without recourse, as the

Originator or the Seller, as applicable, shall furnish to it and as shall be

necessary to vest in the Originator or the Seller, as applicable, any Mortgage

Loan released pursuant hereto. Neither the Trustee nor the Trust Administrator

shall have any further responsibility with regard to such Mortgage File. In lieu

of repurchasing any such Mortgage Loan as provided above, if so provided in the

Mortgage Loan Purchase Agreement, the Originator or the Seller may cause such

Mortgage Loan to be removed from REMIC I (in which case it shall become a

Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage

Loans in the manner and subject to the limitations set forth in Section 2.03(b).

It is understood and agreed that the obligation of the Originator and the Seller

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to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a

document is missing, a material defect in a constituent document exists or as to

which such a breach has occurred and is continuing shall constitute the sole

remedy respecting such omission, defect or breach available to the Trustee and

the Certificateholders.

(b) Any substitution of Qualified Substitute Mortgage Loans

for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected

prior to the date which is two years after the Startup Day for REMIC I.

As to any Deleted Mortgage Loan for which the Originator or

the Seller substitutes a Qualified Substitute Mortgage Loan or Loans, such

substitution shall be effected by the Originator or the Seller, as applicable,

delivering to the Trustee, for such Qualified Substitute Mortgage Loan or Loans,

the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other

documents and agreements, with all necessary endorsements thereon, as are

required by Section 2.01, together with an Officers' Certificate providing that

each such Qualified Substitute Mortgage Loan satisfies the definition thereof

and specifying the Substitution Shortfall Amount (as described below), if any,

in connection with such substitution. The Trustee shall acknowledge receipt for

such Qualified Substitute Mortgage Loan or Loans and, within ten Business Days

thereafter, review such documents as specified in Section 2.02 and deliver to

the Depositor, the Servicer and the Trust Administrator, with respect to such

Qualified Substitute Mortgage Loan or Loans, a certification substantially in

the form attached hereto as Exhibit C-1, with any applicable exceptions noted

thereon. Within one year of the date of substitution, the Trustee shall deliver

to the Depositor, the Servicer and the Trust Administrator a certification

substantially in the form of Exhibit C-2 hereto with respect to such Qualified

Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon.

Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the

month of substitution are not part of REMIC I and will be retained by the

Originator or the Seller, as applicable. For the month of substitution,

distributions to Certificateholders will reflect the Monthly Payment due on such

Deleted Mortgage Loan on or before the Due Date in the month of substitution,

and the Originator or the Seller, as applicable, shall thereafter be entitled to

retain all amounts subsequently received in respect of such Deleted Mortgage

Loan. The Depositor shall give or cause to be given written notice to the

Certificateholders that such substitution has taken place, shall amend the

Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from

the terms of this Agreement and the substitution of the Qualified Substitute

Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan

Schedule to the Trustee and the Trust Administrator. Upon such substitution,

such Qualified Substitute Mortgage Loan or Loans shall constitute part of the

Mortgage Pool and shall be subject in all respects to the terms of this

Agreement and the Mortgage Loan Purchase Agreement, including, all applicable

representations and warranties thereof included in the Mortgage Loan Purchase

Agreement.

For any month in which the Originator or the Seller, as

applicable, substitutes one or more Qualified Substitute Mortgage Loans for one

or more Deleted Mortgage Loans, the Servicer will determine the amount (the

"Substitution Shortfall Amount"), if any, by which the aggregate Purchase Price

of all such Deleted Mortgage Loans exceeds the aggregate of, as to each such

Qualified Substitute Mortgage Loan, the Stated Principal Balance thereof as of

the date of substitution, together with one month's interest on such Stated

Principal Balance at the applicable Net Mortgage Rate, plus all outstanding

Advances and

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Servicing Advances (including Nonrecoverable Advances and Nonrecoverable

Servicing Advances) related thereto. On the date of such substitution, the

Originator or the Seller, as applicable, will deliver or cause to be delivered

to the Servicer for deposit in the Collection Account an amount equal to the

Substitution Shortfall Amount, if any, and the Trustee, upon receipt of the

related Qualified Substitute Mortgage Loan or Loans and certification by the

Servicer of such deposit, shall release to the Originator or the Seller, as

applicable, the related Mortgage File or Files and the Trustee shall execute and

deliver such instruments of transfer or assignment, in each case without

recourse, the Originator or the Seller, as applicable, shall deliver to it and

as shall be necessary to vest therein any Deleted Mortgage Loan released

pursuant hereto.

In addition, the Originator or the Seller, as applicable,

shall obtain at its own expense and deliver to the Trust Administrator and the

Trustee an Opinion of Counsel to the effect that such substitution will not

cause (a) any federal tax to be imposed on any Trust REMIC, including without

limitation, any federal tax imposed on "prohibited transactions" under Section

860F(a)(1) of the Code or on "contributions after the startup date" under

Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to qualify as a

REMIC at any time that any Certificate is outstanding.

(c) Upon discovery by the Depositor, the Seller, the Servicer,

the Trustee or the Trust Administrator that any Mortgage Loan does not

constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of

the Code, the party discovering such fact shall within two Business Days give

written notice thereof to the other parties. In connection therewith, the Seller

shall repurchase or, subject to the limitations set forth in Section 2.03(b),

substitute one or more Qualified Substitute Mortgage Loans for the affected

Mortgage Loan within 90 days of the earlier of discovery or receipt of such

notice with respect to such affected Mortgage Loan. Any such repurchase or

substitution shall be made in the same manner as set forth in Section 2.03(a).

The Trustee and the Trust Administrator shall reconvey to the Seller the

Mortgage Loan to be released pursuant hereto in the same manner, and on the same

terms and conditions, as it would a Mortgage Loan repurchased for breach of a

representation or warranty.

SECTION 2.04. Reserved.

SECTION 2.05. Representations, Warranties and

Covenants of the Servicer.

The Servicer hereby represents, warrants and covenants to the

Trust Administrator and the Trustee, for the benefit of each of the Trustee, the

Trust Administrator, the Certificateholders and to the Depositor that as of the

Closing Date or as of such date specifically provided herein:

(i) The Servicer is a limited partnership duly formed, validly

existing and in good standing as a limited partnership under the laws

of the State of Delaware and is duly authorized and qualified to

transact any and all business contemplated by this Agreement to be

conducted by the Servicer in any state in which a Mortgaged Property is

located or is otherwise not required under applicable law to effect

such qualification and, in any event, is in compliance with the doing

business laws of any such State, to the extent necessary to ensure its

ability to enforce each Mortgage Loan and to service the Mortgage Loans

in accordance with the terms of this Agreement;

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(ii) The Servicer has the full power and authority to conduct

its business as presently conducted by it and to execute, deliver and

perform, and to enter into and consummate, all transactions

contemplated by this Agreement. The Servicer has duly authorized the

execution, delivery and performance of this Agreement, has duly

executed and delivered this Agreement, and this Agreement, assuming due

authorization, execution and delivery by the Depositor, the Trust

Administrator and the Trustee, constitutes a legal, valid and binding

obligation of the Servicer, enforceable against it in accordance with

its terms except as the enforceability thereof may be limited by

bankruptcy, insolvency, reorganization or similar laws affecting the

enforcement of creditors' rights generally and by general principles of

equity;

(iii) The execution and delivery of this Agreement by the

Servicer, the servicing of the Mortgage Loans by the Servicer

hereunder, the consummation by the Servicer of any other of the

transactions herein contemplated, and the fulfillment of or compliance

with the terms hereof are in the ordinary course of business of the

Servicer and will not (A) result in a breach of any term or provision

of the limited partnership agreement of the Servicer or (B) conflict

with, result in a breach, violation or acceleration of, or result in a

default under, the terms of any other material agreement or instrument

to which the Servicer is a party or by which it may be bound, or any

statute, order or regulation applicable to the Servicer of any court,

regulatory body, administrative agency or governmental body having

jurisdiction over the Servicer; and the Servicer is not a party to,

bound by, or in breach or violation of any indenture or other agreement

or instrument, or subject to or in violation of any statute, order or

regulation of any court, regulatory body, administrative agency or

governmental body having jurisdiction over it, which materially and

adversely affects or, to the Servicer's knowledge, would in the future

materially and adversely affect, (x) the ability of the Servicer to

perform its obligations under this Agreement, (y) the business,

operations, financial condition, properties or assets of the Servicer

taken as a whole or (z) the legality, validity or enforceability of

this Agreement;

(iv) The Servicer is a HUD approved mortgagee pursuant to

Section 203 and Section 211 of the National Housing Act. No event has

occurred, including but not limited to a change in insurance coverage,

that would make the Servicer unable to comply with HUD eligibility

requirements or that would require notification to HUD;

(v) The Servicer does not believe, nor does it have any reason

or cause to believe, that it cannot perform each and every covenant

made by it and contained in this Agreement;

(vi) No litigation is pending against the Servicer that would

materially and adversely affect the execution, delivery or

enforceability of this Agreement or the ability of the Servicer to

service the Mortgage Loans or to perform any of its other obligations

hereunder in accordance with the terms hereof;

(vii) There are no actions or proceedings against, or

investigations known to it of, the Servicer before any court,

administrative or other tribunal (A) that might prohibit its entering

into this Agreement, (B) seeking to prevent the consummation of the

transactions contemplated by this

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Agreement or (C) that might prohibit or materially and adversely affect

the performance by the Servicer of its obligations under, or the

validity or enforceability of, this Agreement;

(viii) No consent, approval, authorization or order of any

court or governmental agency or body is required for the execution,

delivery and performance by the Servicer of, or compliance by the

Servicer with, this Agreement or the consummation by it of the

transactions contemplated by this Agreement, except for such consents,

approvals, authorizations or orders, if any, that have been obtained

prior to the Closing Date; and

(ix) The Servicer does and will continue to accurately report

its borrower credit files for each Mortgage Loan to the three major

credit bureaus in existence as of the Closing Date in a timely manner.

It is understood and agreed that the representations,

warranties and covenants set forth in this Section 2.05 shall survive delivery

of the Mortgage Files to the Trustee and shall inure to the benefit of the Trust

Administrator, the Trustee, the Depositor and the Certificateholders. Upon

discovery by any of the Depositor, the Servicer, the Trust Administrator or the

Trustee of a breach of any of the foregoing representations, warranties and

covenants which materially and adversely affects the value of any Mortgage Loan,

Prepayment Charge or the interests therein of the Certificateholders, the party

discovering such breach shall give prompt written notice (but in no event later

than two Business Days following such discovery) to the Trust Administrator and

the Trustee. Subject to Section 7.01, unless such breach shall not be

susceptible of cure within 90 days, the obligation of the Servicer set forth in

Section 2.03(c) to cure breaches shall constitute the sole remedy against the

Servicer available to the Certificateholders, the Depositor or the Trust

Administrator and the Trustee on behalf of the Certificateholders respecting a

breach of the representations, warranties and covenants contained in this

Section 2.05. The foregoing shall not, however, limit any remedies available to

the Certificateholders, the Depositor, the Trust Administrator or the Trustee on

behalf of the Certificateholders, pursuant to the Mortgage Loan Purchase

Agreement, respecting a breach of the representations, warranties and covenants

of the Originator or the Seller contained in the Mortgage Loan Purchase

Agreement.

SECTION 2.06. Issuance of the REMIC I Regular

Interests and the Class R-I

Interest.

The Trustee acknowledges the assignment to it of the Mortgage

Loans and the delivery to it of the Mortgage Files, subject to the provisions of

Section 2.01 and Section 2.02, together with the assignment to it of all other

assets included in REMIC I, the receipt of which is hereby acknowledged.

Concurrently with such assignment and delivery and in exchange therefor, the

Trust Administrator, pursuant to the written request of the Depositor executed

by an officer of the Depositor, has executed, authenticated and delivered to or

upon the order of the Depositor, the Class R Certificates (in respect of the

Class R-I Interest) in authorized denominations. The interests evidenced by the

Class R-I Interest, together with the REMIC I Regular Interests, constitute the

entire beneficial ownership interest in REMIC I. The rights of the Class R-I

Interest and REMIC II (as holder of the REMIC I Regular Interest) to receive

distributions from the proceeds of REMIC I in respect of the Class R-I Interest

and the REMIC I Regular Interests, and

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all ownership interests evidenced or constituted by the Class R-I Interest and

the REMIC I Regular Interests, shall be as set forth in this Agreement.

SECTION 2.07. Conveyance of the REMIC I Regular

Interests; Acceptance of REMIC II by

the Trustee.

The Depositor, concurrently with the execution and delivery

hereof, does hereby transfer, assign, set over and otherwise convey to the

Trustee, without recourse all the right, title and interest of the Depositor in

and to the REMIC I Regular Interests for the benefit of the Class R-II Interest

and REMIC II (as holder of the REMIC I Regular Interests). The Trustee

acknowledges receipt of the REMIC I Regular Interests and declares that it holds

and will hold the same in trust for the exclusive use and benefit of all present

and future Class R-II Interest and REMIC II (as holder of the REMIC I Regular

Interests). The rights of the Class R-II Interest and REMIC II (as holder of the

REMIC I Regular Interests) to receive distributions from the proceeds of REMIC

II in respect of the Class R-II Interest and REMIC II Regular Interests,

respectively, and all ownership interests evidenced or constituted by the Class

R-II Interest and the REMIC II Regular Interests, shall be as set forth in this

Agreement.

SECTION 2.08. Issuance of Class R Certificates.

The Trustee acknowledges the assignment to it of the REMIC

Regular Interests and, concurrently therewith and in exchange therefor, pursuant

to the written request of the Depositor executed by an officer of the Depositor,

the Trust Administrator has executed, authenticated and delivered to or upon the

order of the Depositor, the Class R Certificates in authorized denominations.

SECTION 2.09. Conveyance of the Class M-4

Interest; Acceptance of REMIC III by

the Trustee.

The Depositor, concurrently with the execution and delivery

hereof, does hereby transfer, assign, set over and otherwise convey to the

Trustee, without recourse all the right, title and interest of the Depositor in

and to the Class M-4 Interest for the benefit of the Holders of the Class M-4

Certificates and the Class R-III Interest, and REMIC III (as holder of the Class

M-4 Interest). The Trustee acknowledges receipt of the Class M-4 Interest and

declares that it holds and will hold the same in trust for the exclusive use and

benefit of all present and future Holders of the Class M-4 Certificates and the

Class R-X Certificates, in respect of the Class R-III Interest, and REMIC III

(as holder of the Class M-4 Certificates). The rights of the Class R-X

Certificates, in respect of the Class R-III Interest, and REMIC III (as holder

of the Class M-4 Certificates) to receive distributions from the proceeds of

REMIC III, and all ownership interests evidenced or constituted by the Class R-X

Certificates, in respect of the Class R-III Interest, and the Class M-4

Certificates shall be as set forth in this Agreement.

SECTION 2.10. Conveyance of the Class M-5

Interest; Acceptance of REMIC IV by

the Trustee.

The Depositor, concurrently with the execution and delivery

hereof, does hereby transfer,

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assign, set over and otherwise convey to the Trustee, without recourse all the

right, title and interest of the Depositor in and to the Class M-5 Interest for

the benefit of the Holders of the Class M-5 Certificates and the Class R-IV

Interest, and REMIC IV (as holder of the Class M-5 Interest). The Trustee

acknowledges receipt of the Class M-5 Interest and declares that it holds and

will hold the same in trust for the exclusive use and benefit of all present and

future Holders of the Class M-5 Certificates and the Class R-X Certificates, in

respect of the Class R-IV Interest, and REMIC IV (as holder of the Class M-5

Certificates). The rights of the Class R-X Certificates, in respect of the Class

R-IV Interest, and REMIC IV (as holder of the Class M-5 Certificates) to receive

distributions from the proceeds of REMIC IV, and all ownership interests

evidenced or constituted by the Class R-X Certificates, in respect of the Class

R-IV Interest, and the Class M-5 Certificates shall be as set forth in this

Agreement.

SECTION 2.11. Conveyance of the Class CE-I

Interest and the Class CE-II

Interest; Acceptance of REMIC V by

the Trustee.

The Depositor, concurrently with the execution and delivery

hereof, does hereby transfer, assign, set over and otherwise convey to the

Trustee, without recourse all the right, title and interest of the Depositor in

and to the Class CE-I Interest and the Class CE-II Interest for the benefit of

the Holders of the Class CE Certificates and the Class R-V Interest, and REMIC V

(as holder of the Class CE-I Interest and the Class CE-II Interest). The Trustee

acknowledges receipt of the Class CE-I Interest and the Class CE-II Interest and

declares that it holds and will hold the same in trust for the exclusive use and

benefit of all present and future Holders of the Class CE Certificates and the

Class R-X Certificates, in respect of the Class R-V Interest, and REMIC V (as

holder of the Class CE Certificates). The rights of the Class R-X Certificates,

in respect of the Class R-V Interest, and REMIC V (as holder of the Class CE

Certificates) to receive distributions from the proceeds of REMIC V, and all

ownership interests evidenced or constituted by the Class R-X Certificates, in

respect of the Class R-V Interest, and the Class CE Certificates shall be as set

forth in this Agreement.

SECTION 2.12. Conveyance of the Class P Interest;

Acceptance of REMIC VI by the

Trustee.

The Depositor, concurrently with the execution and delivery

hereof, does hereby transfer, assign, set over and otherwise convey to the

Trustee, without recourse all the right, title and interest of the Depositor in

and to the Class P Interest for the benefit of the Holders of the Class P

Certificates and the Class R-VI Interest, and REMIC VI (as holder of the Class P

Interest). The Trustee acknowledges receipt of the Class P Interest and declares

that it holds and will hold the same in trust for the exclusive use and benefit

of all present and future Holders of the Class P Certificates and the Class R-X

Certificates, in respect of the Class R-VI Interest, and REMIC VI (as holder of

the Class P Certificates). The rights of the Class R-X Certificates, in respect

of the Class R-VI Interest, and REMIC VI (as holder of the Class P Certificates)

to receive distributions from the proceeds of REMIC VI, and all ownership

interests evidenced or constituted by the Class R-X Certificates, in respect of

the Class R-VI Interest, and the Class P Certificates shall be as set forth in

this Agreement.

SECTION 2.13. Issuance of Class R-X Certificates.

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The Trustee acknowledges the assignment to it of the Class

R-III Interest, the Class R-IV Interest, the Class R-V Interest and the Class

R-VI Interest and, concurrently therewith and in exchange therefor, pursuant to

the written request of the Depositor executed by an officer of the Depositor,

the Trust Administrator has executed, authenticated and delivered to or upon the

order of the Depositor, the Class R-X Certificates in authorized denominations.

ARTICLE III

ADMINISTRATION AND SERVICING

OF THE MORTGAGE LOANS

SECTION 3.01. Servicer to Act as Servicer.

The Servicer shall service and administer the Mortgage Loans

on behalf of the Trust Fund and in the best interests of and for the benefit of

the Certificateholders (as determined by the Servicer in its reasonable

judgment) in accordance with the terms of this Agreement and the respective

Mortgage Loans and, to the extent consistent with such terms, in the same manner

in which it services and administers similar mortgage loans for its own

portfolio, giving due consideration to customary and usual standards of practice

of prudent mortgage lenders and loan servicers administering similar mortgage

loans but without regard to:

(i) any relationship that the Servicer or any Affiliate of the

Servicer may have with the related Mortgagor;

(ii) the ownership of any Certificate by the Servicer or any

Affiliate of the Servicer;

(iii) the Servicer's obligation to make Advances or Servicing

Advances; or

(iv) the Servicer'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 also 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, 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 is hereby authorized and empowered by the Trustee

when the Servicer believes it appropriate in its best judgment, to execute and

deliver, on behalf of the Trust Fund, the Certificateholders and the Trustee or

any of them, and upon notice to the Trustee and the Trust Administrator, 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

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Trustee, for the benefit of the Trust Fund and the Certificateholders. 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. Subject to Section 3.17, the

Trustee shall execute, at the written request of the Servicer, and furnish to

the Servicer any special or limited powers of attorney and other documents

necessary or appropriate to enable the Servicer to carry out its servicing and

administrative duties hereunder and the Trustee shall not be liable for the

actions of the Servicer under such powers of attorney.

In accordance with the standards of the preceding paragraph,

the Servicer shall make or cause to be made Servicing Advances as necessary for

the purpose of effecting the payment of taxes and assessments on the Mortgaged

Properties, which Servicing Advances shall be reimbursable in the first instance

from related collections from the Mortgagors pursuant to Section 3.09, and

further as provided in Section 3.11; provided, however, the Servicer shall only

make such Servicing Advance if the Mortgagor has made such payment as set forth

in Section 3.09 or if the Mortgagor has not made such payment, if the failure to

make such Servicing Advance would affect the lien position of the Mortgage Loan.

Any cost incurred by the Servicer in effecting the payment of taxes and

assessments on a Mortgaged Property shall not, for the purpose of calculating

the Stated Principal Balance of a Mortgage Loan or distributions to

Certificateholders, be added to the unpaid principal balance of the related

Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

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 4.03) and the Servicer shall not 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 (unless, as provided in Section 3.07, the Mortgagor is in default

with respect to the Mortgage Loan or such default is, in the judgment of the

Servicer, reasonably foreseeable) or 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 Trust REMIC created hereunder to fail to qualify as a REMIC under the Code

or the imposition of any tax on "prohibited transactions" or "contributions

after the startup date" under the REMIC Provisions.

Notwithstanding anything in this Agreement to the contrary, in

the event of a Principal Prepayment in full of a Mortgage Loan, the Servicer may

not waive any Prepayment Charge or portion thereof required by the terms of the

related Mortgage Note unless (i) the Servicer determines that such waiver would

maximize recovery of Liquidation Proceeds for such Mortgage Loan, taking into

account the value of such Prepayment Charge, or (ii)(A) the enforceability

thereof is limited (1) by bankruptcy, insolvency, moratorium, receivership, or

other similar law relating to creditors' rights generally or (2) due to

acceleration in connection with a foreclosure or other involuntary payment, or

(B) the enforceability is otherwise limited or prohibited by applicable law.

In the event of a Principal Prepayment in full with respect to

any Mortgage Loan, the

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Servicer shall deliver to the Trust Administrator a certification of a Servicing

Officer substantially in the form of Exhibit J no later than the third Business

Day following the immediately succeeding Determination Date with a copy to the

Class CE Certificateholder.

Promptly upon the earlier of discovery by the Servicer or

receipt of notice by the Servicer of the breach of the covenant of the Servicer

set forth above which materially and adversely affects the interests of the

Holders of the Class P Certificates in any Prepayment Charge, the Servicer shall

promptly pay the amount of such waived Prepayment Charge (or such portion

thereof as had been waived), for the benefit of the holders of the Class P

Certificates by depositing such amount into the Collection Account for

distribution in accordance with the terms of this Agreement. The foregoing shall

not, however, limit any remedies available to the Certificateholders, the

Depositor or the Trust Administrator on behalf of the Trust Fund and for the

benefit of the Certificateholders, pursuant to the Mortgage Loan Purchase

Agreement, respecting a breach of the representations, warranties and covenants

of the Originator or the Seller contained in the Mortgage Loan Purchase

Agreement.

With respect to each Mortgage Loan which is the subject of a

Principal Prepayment in full, which prepayment is not accompanied by the payment

of a Prepayment Charge, the Trust Administrator shall verify that such Mortgage

Loan was identified on the Mortgage Loan Schedule as not being subject to a

Prepayment Charge.

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.

As part of its servicing activities hereunder, the Servicer,

for the benefit of the Trustee, the Trust Administrator and the

Certificateholders, shall enforce the obligations of the Originator and the

Seller under the Mortgage Loan Purchase Agreement, including, without

limitation, any obligation of the Originator or the Seller to purchase a

Mortgage Loan on account of missing or defective documentation or on account of

a breach of a representation, warranty or covenant, as described in Section

2.03(a).

SECTION 3.02. Sub-Servicing Agreements Between

Servicer and Sub-Servicers.

The Servicer may arrange for the subservicing of any Mortgage

Loan by a Sub- Servicer pursuant to a Sub-Servicing Agreement; provided that

such sub-servicing arrangement and the terms of the related Sub-Servicing

Agreement must provide for the servicing of such Mortgage Loans in a manner

consistent with the servicing arrangements contemplated hereunder.

Notwithstanding the provisions of any Sub-Servicing Agreement, any of the

provisions of this Agreement relating to agreements or arrangements between the

Servicer or a Sub-Servicer or reference to actions taken through a Servicer or

otherwise, the Servicer shall remain obligated and liable to the Depositor, the

Trust, the Trustee, the Trust Administrator and the Certificateholders for the

servicing and administration of the Mortgage Loans in accordance with the

provisions of this Agreement without diminution of such obligation or liability

by virtue of such Sub- Servicing Agreements or arrangements or by virtue of

indemnification from the Sub-Servicer and to the same extent and under the same

terms and conditions as if the Servicer alone were servicing and

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administering the Mortgage Loans. Every Sub-Servicing Agreement entered into by

the Servicer shall contain a provision giving the successor Servicer the option

to terminate such agreement in the event a successor Servicer is appointed. All

actions of each Sub-Servicer performed pursuant to the related Sub- Servicing

Agreement shall be performed as an agent of the Servicer with the same force and

effect as if performed directly by the Servicer.

For purposes of this Agreement, the Servicer shall be deemed

to have received any collections, recoveries or payments with respect to the

Mortgage Loans that are received by a Sub- Servicer regardless of whether such

payments are remitted by the Sub-Servicer to the Servicer.

SECTION 3.03. Successor Sub-Servicers.

The Servicer shall be entitled to terminate any Sub-Servicing

Agreement in accordance with the terms and conditions of such Sub-Servicing

Agreement and to either itself directly service the related Mortgage Loans or

enter into a Sub-Servicing Agreement with a successor Sub-Servicer which

qualifies under Section 3.02. Any Sub-Servicing Agreement shall include the

provision that such agreement may be immediately terminated by the Trust

Administrator or the Trustee (if the Trust Administrator or the Trustee is

acting as Servicer) without fee, in accordance with the terms of this Agreement,

in the event that the Servicer (or the Trust Administrator or the Trustee, if it

is then acting as Servicer) shall, for any reason, no longer be the Servicer

(including termination due to a Servicer Event of Default).

SECTION 3.04. No Contractual Relationship Between

Sub-Servicer, Trust Administrator,

Trustee or the Certificateholders.

Any Sub-Servicing Agreement and any other transactions or

services relating to the Mortgage Loans involving a Sub-Servicer shall be deemed

to be between the Sub-Servicer and the Servicer alone and the Trust

Administrator, the Trustee and the Certificateholders shall not be deemed

parties thereto and shall have no claims, rights, obligations, duties or

liabilities with respect to any Sub- Servicer except as set forth in Section

3.05.

SECTION 3.05. Assumption or Termination of

Sub-Servicing Agreement by Trust

Administrator.

In connection with the assumption of the responsibilities,

duties and liabilities and of the authority, power and rights of the Servicer

hereunder by the Trust Administrator pursuant to Section 7.02 or another

successor Servicer, it is understood and agreed that the Servicer's rights and

obligations under any Sub-Servicing Agreement then in force between the Servicer

and a Sub-Servicer shall be assumed simultaneously by the Trust Administrator or

another successor Servicer without act or deed on the part of the Trust

Administrator; provided, however, that the Trust Administrator or any other

successor Servicer may terminate the Sub-Servicer.

The Servicer shall, upon the reasonable request of the Trust

Administrator, but at the expense of the Servicer, deliver to the assuming party

documents and records relating to each Sub- Servicing Agreement and an

accounting of amounts collected and held by it and otherwise use its best

reasonable efforts to effect the orderly and efficient transfer of the

Sub-Servicing Agreements to the assuming party.

SECTION 3.06. [Reserved].

SECTION 3.07. Collection of Certain Mortgage Loan

Payments.

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,

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, the Servicer may in its discretion (i) waive any late

payment charge or, if applicable, penalty interest or (ii) extend the due dates

for the Monthly Payments due on a Mortgage Note for a period of not greater than

180 days; provided that any extension pursuant to this clause shall not affect

the amortization schedule of any Mortgage Loan for purposes of any computation

hereunder. 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 waive, modify or vary any term of such Mortgage Loan (including

modifications that change the Mortgage Rate, forgive the payment of principal or

interest or extend the final maturity date of such Mortgage Loan), accept

payment from the related Mortgagor of an amount less than the Stated Principal

Balance in final satisfaction of such Mortgage Loan (such payment, a "Short

Pay-off"), or consent to the postponement of strict compliance with any such

term or otherwise grant indulgence to any Mortgagor if in the Servicer's

determination such waiver, modification, postponement or indulgence is not

materially adverse to the interests of the Certificateholders (taking into

account any estimated Realized Loss that might result absent such action).

SECTION 3.08. [Reserved].

SECTION 3.09. Collection of Taxes, Assessments and

Similar Items; Servicing Accounts.

The Servicer shall establish and maintain one or more accounts

(the "Servicing Accounts"), into which all collections from the Mortgagors (or

related advances from Sub-Servicers) for the payment of taxes, assessments,

fire, flood, and hazard insurance premiums, and comparable items for the account

of the Mortgagors ("Escrow Payments") shall be deposited and retained. Servicing

Accounts shall be Eligible Accounts. The Servicer shall deposit in the Servicing

Accounts on a daily basis and in no event later than the second Business Day

after receipt, and retain therein, all Escrow Payments collected on account of

the Mortgage Loans, for the purpose of effecting the timely payment of any such

items as required under the terms of this Agreement. Withdrawals of amounts from

a Servicing Account may be made only to (i) effect timely payment of taxes,

assessments, fire, flood, and hazard insurance premiums, and comparable items;

(ii) reimburse the Servicer out of related collections for any advances made

pursuant to Section 3.01 (with respect to taxes and assessments) and Section

3.14 (with respect to fire, flood and hazard insurance); (iii) refund to

Mortgagors any sums as may be determined to be overages; (iv) pay interest, if

required and

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as described below, to Mortgagors on balances in the Servicing Account; or (v)

clear and terminate the Servicing Account at the termination of the Servicer's

obligations and responsibilities in respect of the Mortgage Loans under this

Agreement in accordance with Article IX. As part of its servicing duties, the

Servicer shall pay to the Mortgagors interest on funds in Servicing Accounts, to

the extent required by law and, to the extent that interest earned on funds in

the Servicing Accounts is insufficient, to pay such interest from its or their

own funds, without any reimbursement therefor. Notwithstanding the foregoing,

the Servicer shall not be obligated to collect Escrow Payments if the related

Mortgage Loan does not require such payments but the Servicer shall nevertheless

be obligated to make Servicing Advances as provided in Section 3.01. In the

event the Servicer shall deposit in the Servicing Accounts any amount not

required to be deposited therein, it may at any time withdraw such amount from

the Servicing Accounts, any provision to the contrary notwithstanding.

SECTION 3.10. Collection Account, Distribution

Account and Initial Deposit

Accounts.

(a) On behalf of the Trust Fund, the Servicer shall establish

and maintain one or more accounts (such account or accounts, the "Collection

Account"), held in trust for the benefit of the Trustee, the Trust Administrator

and the Certificateholders. On behalf of the Trust Fund, the Servicer shall

deposit or cause to be deposited in the Collection Account on a daily basis and

in no event later than two Business Days after receipt, as and when received or

as otherwise required hereunder, the following payments and collections received

or made by it on or subsequent to the Cut-off Date:

(i) all payments on account of principal, including Principal

Prepayments, on the Mortgage Loans;

(ii) all payments on account of interest (net of the related

Servicing Fee) on each Mortgage Loan;

(iii) all Insurance Proceeds and Liquidation Proceeds (other

than proceeds collected in respect of any particular REO Property and

amounts paid by the Servicer in connection with a purchase of Mortgage

Loans and REO Properties pursuant to Section 9.01);

(iv) any amounts required to be deposited pursuant to Section

3.12 in connection with any losses realized on Permitted Investments

with respect to funds held in the Collection Account;

(v) any amounts required to be deposited by the Servicer

pursuant to the second paragraph of Section 3.14(a) in respect of any

blanket policy deductibles;

(vi) any Purchase Price or Substitution Shortfall Amount

delivered to the Servicer and all proceeds (net of amounts payable or

reimbursable to the Servicer) of Mortgage Loans purchased in accordance

with Section 9.01; and

(vii) any Prepayment Charges or amounts required to be

deposited by the Servicer in

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connection with a breach of its obligations under Section 3.01 with

respect to the waiver of Prepayment Charges.

The foregoing requirements for deposit in the Collection

Accounts shall be exclusive, it being understood and agreed that, without

limiting the generality of the foregoing, payments in the nature of late payment

charges, assumption fees or other similar fees need not be deposited by the

Servicer in the Collection Account. In the event the Servicer shall deposit in

the Collection Account any amount not required to be deposited therein, it may

at any time withdraw such amount from the Collection Account, any provision

herein to the contrary notwithstanding.

(b) On behalf of the Trust Fund, the Trust Administrator, as

agent for the Trustee, shall establish and maintain one or more accounts (such

account or accounts, the "Distribution Account"), held in trust for the benefit

of the Trustee, the Trust Fund and the Certificateholders. On behalf of the

Trust Fund, the Servicer shall deliver to the Trust Administrator in immediately

available funds for deposit in the Distribution Account on or before 3:00 p.m.

New York time (i) on the Servicer Remittance Date, that portion of the Available

Distribution Amount (calculated without regard to the references in clause (2)

of the definition thereof to amounts that may be withdrawn from the Distribution

Account) for the related Distribution Date then on deposit in the Collection

Account and the amount of all Prepayment Charges collected by the Servicer in

connection with the Principal Prepayment of any of the Mortgage Loans (including

the amount of any payment by the Servicer in respect of a waived Prepayment

Charge, other than as permitted in Section 3.01) then on deposit in the

Collection Account and the amount of any funds reimbursable to an Advancing

Person pursuant to Section 3.28, and (ii) on each Business Day as of the

commencement of which the balance on deposit in the Collection Account exceeds

$75,000 following any withdrawals pursuant to the next succeeding sentence, the

amount of such excess, but only if the Collection Account constitutes an

Eligible Account solely pursuant to clause (ii) of the definition of "Eligible

Account." If the balance on deposit in the Collection Account exceeds $75,000 as

of the commencement of business on any Business Day and the Collection Account

constitutes an Eligible Account solely pursuant to clause (ii) of the definition

of "Eligible Account," the Servicer shall, on or before 5:00 p.m. New York time

on such Business Day, withdraw from the Collection Account any and all amounts

payable or reimbursable to the Depositor, the Servicer, the Trustee, the Trust

Administrator, the Originator or the Seller pursuant to Section 3.11 and shall

pay such amounts to the Persons entitled thereto.

(c) Funds in the Collection Account and the Distribution

Account may be invested in Permitted Investments in accordance with the

provisions set forth in Section 3.12. The Servicer shall give notice to the

Trustee and the Trust Administrator of the location of the Collection Account

maintained by it when established and prior to any change thereof. The Trust

Administrator shall give notice to the Servicer, the Trustee and the Depositor

of the location of the Distribution Account when established and prior to any

change thereof.

(d) Funds held in the Collection Account at any time may be

delivered by the Servicer in immediately available funds to the Trust

Administrator for deposit in the Distribution Account. In the event the Servicer

shall deliver to the Trust Administrator for deposit in the Distribution Account

any amount not required to be deposited therein, it may at any time request that

the Trust Administrator

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withdraw such amount from the Distribution Account and remit to it any such

amount, any provision herein to the contrary notwithstanding. In no event shall

the Trust Administrator incur liability as a result of withdrawals from the

Distribution Account at the direction of the Servicer in accordance with the

immediately preceding sentence. In addition, the Servicer shall deliver to the

Trust Administrator from time to time for deposit in the Distribution Account

the amounts set forth in clauses (i) through (v) below:

(i) any Advances, as required pursuant to Section 4.03;

(ii) any amounts required to be deposited pursuant to Section

3.23(d) or 3.23(f) in connection with any REO Property;

(iii) any amounts to be paid in connection with a purchase of

Mortgage Loans and REO Properties pursuant to Section 9.01;

(iv) any amounts required to be deposited pursuant to Section

3.24 in connection with any Prepayment Interest Shortfalls; and

(v) any Stayed Funds, as soon as permitted by the federal

bankruptcy court having jurisdiction in such matters.

(e) Promptly upon receipt of any Stayed Funds, whether from

the Servicer, a trustee in bankruptcy, or federal bankruptcy court or other

source, the Trust Administrator shall notify the Servicer of such receipt and

deposit such funds in the Distribution Account, subject to withdrawal thereof as

permitted hereunder. In addition, the Servicer shall deliver to the Trust

Administrator for deposit in the Distribution Account any amounts required to be

deposited pursuant to Section 3.12 in connection with losses realized on

Permitted Investments with respect to funds held in the Collection Account.

SECTION 3.11. Withdrawals from the Collection

Account and Distribution Account.

(a) The Servicer shall, from time to time, make withdrawals

from the Collection Account for any of the following purposes or as described in

Section 4.03:

(i) to remit to the Trust Administrator for deposit in the

Distribution Account the amounts required to be so remitted pursuant to

Section 3.10(b) or permitted to be so remitted pursuant to the first

sentence of Section 3.10(d);

(ii) subject to Section 3.16(d), to reimburse the Servicer for

Advances, but only to the extent of amounts received which represent

Late Collections (net of the related Servicing Fees) of Monthly

Payments on Mortgage Loans with respect to which such Advances were

made in accordance with the provisions of Section 4.03;

(iii) subject to Section 3.16(d), to pay the Servicer any

unpaid Servicing Fees and

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reimburse the Servicer any unreimbursed Servicing Advances with respect

to each Mortgage Loan, but only to the extent of any Liquidation

Proceeds and Insurance Proceeds received with respect to such Mortgage

Loan;

(iv) to pay to the Servicer as servicing compensation (in

addition to the Servicing Fee) on the Servicer Remittance Date any

interest or investment income earned on funds deposited in the

Collection Account;

(v) to pay to the Servicer, the Originator or the Seller, as

the case may be, with respect to each Mortgage Loan that has previously

been purchased or replaced pursuant to Section 2.03 or Section 3.16(c)

all amounts received thereon not included in the Purchase Price or the

Substitution Shortfall Amount;

(vi) to reimburse the Servicer for any Advance or Servicing

Advance previously made which the Servicer has determined to be a

Nonrecoverable Advance or a Nonrecoverable Servicing Advance in

accordance with the provisions of Section 4.03;

(vii) to reimburse the Servicer or the Depositor for expenses

incurred by or reimbursable to the Servicer or the Depositor, as the

case may be, pursuant to Section 6.03;

(viii) to reimburse the Servicer, the Trust Administrator or

the Trustee, as the case may be, for expenses reasonably incurred in

respect of the breach or defect giving rise to the purchase obligation

under Section 2.03 of this Agreement that were included in the Purchase

Price of the Mortgage Loan, including any expenses arising out of the

enforcement of the purchase obligation;

(ix) to pay, or to reimburse the Servicer for advances in

respect of, expenses incurred in connection with any Mortgage Loan

pursuant to Section 3.16(b); and

(x) to clear and terminate the Collection Account pursuant to

Section 9.01.

The Servicer shall keep and maintain separate accounting, on a

Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any

withdrawal from the Collection Account, to the extent held by or on behalf of

it, pursuant to subclauses (ii), (iii), (v), (vi), (viii) and (ix) above. The

Servicer shall provide written notification to the Trustee and the Trust

Administrator, on or prior to the next succeeding Servicer Remittance Date, upon

making any withdrawals from the Collection Account pursuant to subclauses (vi)

and (vii) above.

(b) The Trust Administrator shall, from time to time, make

withdrawals from the Distribution Account, for any of the following purposes,

without priority:

(i) to make distributions to Certificateholders in accordance

with Section 4.01;

(ii) to pay to itself and the Trustee amounts to which it is

entitled pursuant to Section

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8.05;

(iii) to pay to itself any interest or investment income

earned on funds deposited in the Distribution Account pursuant to

Section 3.12(b);

(iv) to reimburse itself pursuant to Section 7.02;

(v) to pay to an Advancing Person reimbursements for Advances

and/or Servicing Advances pursuant to Section 3.28;

(vi) to pay any amounts in respect of taxes pursuant to

Section 10.01(g)(iii); and

(vii) to clear and terminate the Distribution Account pursuant

to Section 9.01.

SECTION 3.12. Investment of Funds in the

Investment Accounts.

(a) The Servicer may direct, by means of written directions

(which may be standing directions), any depository institution maintaining the

Collection Account to invest the funds in the Collection Account and the Trust

Administrator may direct the investment of funds in the Distribution Account

(each, for purposes of this Section 3.12, an "Investment Account") in one or

more Permitted Investments bearing interest or sold at a discount, and maturing,

unless payable on demand, (i) no later than the Business Day immediately

preceding the date on which such funds are required to be withdrawn from such

account pursuant to this Agreement, if a Person other than the Trust

Administrator is the obligor thereon, and (ii) no later than the date on which

such funds are required to be withdrawn from such account pursuant to this

Agreement, if the Trust Administrator is the obligor thereon. All such Permitted

Investments shall be held to maturity, unless payable on demand. Any investment

of funds shall be made in the name of the Trust Administrator (in its capacity

as such) or in the name of a nominee of the Trust Administrator. The Trust

Administrator shall be entitled to sole possession over each such investment

(except with respect to investment direction of funds held in the Collection

Account) and, subject to subsection (b) below, the income thereon, and any

certificate or other instrument evidencing any such investment shall be

delivered directly to the Trust Administrator or its agent, together with any

document of transfer necessary to transfer title to such investment to the Trust

Administrator or its nominee. In the event amounts on deposit in the Collection

Account are at any time invested in a Permitted Investment payable on demand,

the Trust Administrator shall at the direction of the Servicer:

(x) consistent with any notice required to be given

thereunder, demand that payment thereon be made on the last day such

Permitted Investment may otherwise mature hereunder in an amount equal

to the lesser of (1) all amounts then payable thereunder and (2) the

amount required to be withdrawn on such date; and

(y) demand payment of all amounts due thereunder promptly upon

determination by a Responsible Officer of the Trust Administrator that

such Permitted Investment would not constitute a Permitted Investment

in respect of funds thereafter on deposit in the Investment

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Account.

(b) All income and gain realized from the investment of funds

deposited in the Collection Account held by or on behalf of the Servicer or the

Trustee, shall be for the benefit of the Servicer and shall be subject to its

withdrawal in accordance with Section 3.11. The Servicer shall deposit in the

Collection Account the amount of any loss incurred in respect of any such

Permitted Investment made with funds in such account immediately upon

realization of such loss. All income and gain realized from the investment of

funds deposited in the Distribution Account shall be for the benefit of the

Trust Administrator. The Trust Administrator shall deposit in the Distribution

Account the amount of any loss incurred in respect of any such Permitted

Investment made with funds in such account immediately upon realization of such

loss.

(c) Except as otherwise expressly provided in this Agreement,

if any default occurs in the making of a payment due under any Permitted

Investment, or if a default occurs in any other performance required under any

Permitted Investment, the Trust Administrator may and, subject to Section 8.01

and Section 8.02(v), shall, at the written direction of the Servicer, take such

action as may be appropriate to enforce such payment or performance, including

the institution and prosecution of appropriate proceedings.

SECTION 3.13. [Reserved].

SECTION 3.14. Maintenance of Hazard Insurance and

Errors and Omissions and Fidelity

Coverage.

(a) The terms of each Mortgage Note require the related

Mortgagor to maintain fire, flood and hazard insurance policies. To the extent

such policies are not maintained, the Servicer shall cause to be maintained for

each Mortgaged Property fire and hazard insurance with extended coverage as is

customary in the area where the Mortgaged Property is located in an amount which

is at least equal to the lesser of the current principal balance of such

Mortgage Loan and the amount necessary to fully compensate for any damage or

loss to the improvements which are a part of such property on a replacement cost

basis, in each case in an amount not less than such amount as is necessary to

avoid the application of any coinsurance clause contained in the related hazard

insurance policy. The Servicer shall also cause to be maintained fire and hazard

insurance on each REO Property with extended coverage as is customary in the

area where the Mortgaged Property is located in an amount which is at least

equal to the lesser of (i) the maximum insurable value of the improvements which

are a part of such property and (ii) the outstanding principal balance of the

related Mortgage Loan at the time it became an REO Property. The Servicer will

comply in the performance of this Agreement with all reasonable rules and

requirements of each insurer under any such hazard policies. Any amounts to be

collected by the Servicer under any such policies (other than amounts to be

applied to the restoration or repair of the property subject to the related

Mortgage or amounts to be released to the Mortgagor in accordance with the

procedures that the Servicer would follow in servicing loans held for its own

account, subject to the terms and conditions of the related Mortgage and

Mortgage Note) shall be deposited in the Collection Account, subject to

withdrawal pursuant to Section 3.11, if received in respect of a Mortgage Loan,

or in the REO Account, subject to

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withdrawal pursuant to Section 3.23, if received in respect of an REO Property.

Any cost incurred by the Servicer in maintaining any such insurance shall not,

for the purpose of calculating distributions to Certificateholders, be added to

the unpaid principal balance of the related Mortgage Loan, notwithstanding that

the terms of such Mortgage Loan so permit. It is understood and agreed that no

earthquake or other additional insurance is to be required of any Mortgagor

other than pursuant to such applicable laws and regulations as shall at any time

be in force and as shall require such additional insurance. If the Mortgaged

Property or REO Property is at any time in an area identified in the Federal

Register by the Federal Emergency Management Agency as having special flood

hazards, the Servicer will cause to be maintained a flood insurance policy in

respect thereof. Such flood insurance shall be in an amount equal to the lesser

of (i) the unpaid principal balance of the related Mortgage Loan and (ii) the

maximum amount of such insurance available for the related Mortgaged Property

under the national flood insurance program (assuming that the area in which such

Mortgaged Property is located is participating in such program).

In the event that the Servicer shall obtain and maintain a

blanket policy with an insurer having a General Policy Rating of B:VI or better

in Best's Key Rating Guide insuring against hazard losses on all of the Mortgage

Loans, it shall conclusively be deemed to have satisfied its obligations as set

forth in the first two sentences of this Section 3.14, it being understood and

agreed that such policy may contain a deductible clause, in which case the

Servicer shall, in the event that there shall not have been maintained on the

related Mortgaged Property or REO Property a policy complying with the first two

sentences of this Section 3.14, and there shall have been one or more losses

which would have been covered by such policy, deposit to the Collection Account

from its own funds the amount not otherwise payable under the blanket policy

because of such deductible clause. In connection with its activities as

administrator and servicer of the Mortgage Loans, the Servicer agrees to prepare

and present, on behalf of itself, the Trustee, the Trust Fund and the

Certificateholders, claims under any such blanket policy in a timely fashion in

accordance with the terms of such policy.

(b) The Servicer shall keep in force during the term of this

Agreement a policy or policies of insurance covering errors and omissions for

failure in the performance of its respective obligations under this Agreement,

which policy or policies shall be in such form and amount that would meet the

requirements of Fannie Mae or Freddie Mac if it were the purchaser of the

Mortgage Loans, unless the Servicer, has obtained a waiver of such requirements

from Fannie Mae or Freddie Mac. The Servicer shall each also maintain a fidelity

bond in the form and amount that would meet the requirements of Fannie Mae or

Freddie Mac, unless the Servicer, has obtained a waiver of such requirements

from Fannie Mae or Freddie Mac. The Servicer shall be deemed to have complied

with this provision if an Affiliate of the Servicer, has such errors and

omissions and fidelity bond coverage and, by the terms of such insurance policy

or fidelity bond, the coverage afforded thereunder extends to the Servicer. Any

such errors and omissions policy and fidelity bond shall by its terms not be

cancelable without thirty days' prior written notice to the Trustee and the

Trust Administrator.

SECTION 3.15. Enforcement of Due-on-Sale Clauses;

Assumption Agreements.

The Servicer will, to the extent it has knowledge of any

conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor

(whether by absolute conveyance or by

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contract of sale, and whether or not the Mortgagor remains or is to remain

liable under the Mortgage Note and/or the Mortgage), exercise its rights to

accelerate the maturity of such Mortgage Loan under the "due- on-sale" clause,

if any, applicable thereto; provided, however, that the Servicer shall not

exercise any such rights if prohibited by law from doing so. If the Servicer

reasonably believes it is unable under applicable law to enforce such

"due-on-sale" clause, or if any of the other conditions set forth in the proviso

to the preceding sentence apply, the Servicer will enter into an assumption and

modification agreement from or with the person to whom such property has been

conveyed or is proposed to be conveyed, pursuant to which such person becomes

liable under the Mortgage Note and, to the extent permitted by applicable state

law, the Mortgagor remains liable thereon. The Servicer is also authorized to

enter into a substitution of liability agreement with such person, pursuant to

which the original Mortgagor is released from liability and such person is

substituted as the Mortgagor and becomes liable under the Mortgage Note,

provided that no such substitution shall be effective unless such person

satisfies the then current underwriting criteria of the Servicer for mortgage

loans similar to the Mortgage Loans. In connection with any assumption or

substitution, the Servicer shall apply such underwriting standards and follow

such practices and procedures as shall be normal and usual in its general

mortgage servicing activities and as it applies to other mortgage loans owned

solely by it. The Servicer shall not take or enter into any assumption and

modification agreement, however, unless (to the extent practicable in the

circumstances) it shall have received confirmation, in writing, of the continued

effectiveness of any applicable hazard insurance policy. Any fee collected by

the Servicer in respect of an assumption or substitution of liability agreement

will be retained by the Servicer as additional servicing compensation. In

connection with any such assumption, no material term of the Mortgage Note

(including but not limited to the related Mortgage Rate and the amount of the

Monthly Payment) may be amended or modified, except as otherwise required

pursuant to the terms thereof. The Servicer shall notify the Trustee and the

Trust Administrator that any such substitution or assumption agreement has been

completed by forwarding to the Trustee (with a copy to the Trust Administrator)

the executed original of such substitution or assumption agreement, which

document shall be added to the related Mortgage File and shall, for all

purposes, be considered a part of such Mortgage File to the same extent as all

other documents and instruments constituting a part thereof.

Notwithstanding the foregoing paragraph or any other provision

of this Agreement, the Servicer shall not be deemed to be in default, breach or

any other violation of its obligations hereunder by reason of any assumption of

a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any

assumption which the Servicer may be restricted by law from preventing, for any

reason whatever. For purposes of this Section 3.15, the term "assumption" is

deemed to also include a sale (of the Mortgaged Property) subject to the

Mortgage that is not accompanied by an assumption or substitution of liability

agreement.

SECTION 3.16. Realization Upon Defaulted Mortgage

Loans.

(a) The Servicer shall use its best efforts, consistent with

Accepted Servicing Practices, to foreclose upon or otherwise comparably convert

the ownership of properties securing such of the Mortgage Loans as come into and

continue in default and as to which no satisfactory arrangements can be made for

collection of delinquent payments pursuant to Section 3.07. The Servicer shall

be responsible for all costs and expenses incurred by it in any such

proceedings; provided, however, that such costs and

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expenses will be recoverable as Servicing Advances by the Servicer as

contemplated in Sections 3.11 and 3.23. The foregoing is subject to the

provision that, in any case in which a Mortgaged Property shall have suffered

damage from an Uninsured Cause, the Servicer shall not be required to expend its

own funds toward the restoration of such property unless it shall determine in

its discretion that such restoration will increase the proceeds of liquidation

of the related Mortgage Loan after reimbursement to itself for such expenses.

(b) Notwithstanding the foregoing provisions of this Section

3.16 or any other provision of this Agreement, with respect to any Mortgage Loan

as to which the Servicer has received actual notice of, or has actual knowledge

of, the presence of any toxic or hazardous substance on the related Mortgaged

Property, the Servicer shall not, on behalf of the Trust Fund, either (i) obtain

title to such Mortgaged Property as a result of or in lieu of foreclosure or

otherwise, or (ii) otherwise acquire possession of, or take any other action

with respect to, such Mortgaged Property, if, as a result of any such action,

the Trust Fund, the Trustee, the Trust Administrator or the Certificateholders

would be considered to hold title to, to be a "mortgagee-in-possession" of, or

to be an "owner" or "operator" of such Mortgaged Property within the meaning of

the Comprehensive Environmental Response, Compensation and Liability Act of

1980, as amended from time to time, or any comparable law, unless the Servicer

has also previously determined, based on its reasonable judgment and a prudent

report prepared by a Person who regularly conducts environmental audits using

customary industry standards, that:

(1) such Mortgaged Property is in compliance with applicable

environmental laws or, if not, that it would be in the best economic

interest of the Trust Fund to take such actions as are necessary to

bring the Mortgaged Property into compliance therewith; and

(2) there are no circumstances present at such Mortgaged

Property relating to the use, management or disposal of any hazardous

substances, hazardous materials, hazardous wastes or petroleum-based

materials for which investigation, testing, monitoring, containment,

clean-up or remediation could be required under any federal, state or

local law or regulation, or that if any such materials are present for

which such action could be required, that it would be in the best

economic interest of the Trust Fund to take such actions with respect

to the affected Mortgaged Property.

The cost of the environmental audit report contemplated by

this Section 3.16 shall be advanced by the Servicer, subject to the Servicer's

right to be reimbursed therefor from the Collection Account as provided in

Section 3.11(a)(ix), such right of reimbursement being prior to the rights of

Certificateholders to receive any amount in the Collection Account received in

respect of the affected Mortgage Loan or other Mortgage Loans.

If the Servicer determines, as described above, that it is in

the best economic interest of the Trust Fund to take such actions as are

necessary to bring any such Mortgaged Property into compliance with applicable

environmental laws, or to take such action with respect to the containment,

clean-up or remediation of hazardous substances, hazardous materials, hazardous

wastes, or petroleum-based materials affecting any such Mortgaged Property, then

the Servicer shall take such action as it deems to be in the best economic

interest of the Trust Fund. The cost of any such compliance, containment,

cleanup or remediation

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shall be advanced by the Servicer, subject to the Servicer's right to be

reimbursed therefor from the Collection Account as provided in Sections

3.11(a)(iii) or 3.11(a)(ix), such right of reimbursement being prior to the

rights of Certificateholders to receive any amount in the Collection Account

received in respect of the affected Mortgage Loan or other Mortgage Loans.

(c) The Servicer shall have the right to purchase from REMIC I

any defaulted Mortgage Loan that is 90 days or more delinquent, which the

Servicer determines in good faith will otherwise become subject to foreclosure

proceedings (evidence of such determination to be delivered in writing to the

Trust Administrator and the Trustee, in form and substance satisfactory to the

Servicer, the Trust Administrator and the Trustee prior to purchase), at a price

equal to the Purchase Price. The Purchase Price for any Mortgage Loan purchased

hereunder shall be deposited in the Collection Account, and the Trustee, upon

receipt of written certification from the Servicer of such deposit, shall

release or cause to be released to the Servicer the related Mortgage File and

the Trustee shall execute and deliver such instruments of transfer or

assignment, in each case without recourse, as the Servicer shall furnish and as

shall be necessary to vest in the Servicer title to any Mortgage Loan released

pursuant hereto.

(d) Proceeds received in connection with any Final Recovery

Determination, as well as any recovery resulting from a partial collection of

Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan,

will be applied in the following order of priority: first, to reimburse the

Servicer for any related unreimbursed Servicing Advances and Advances, pursuant

to Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid interest on

the Mortgage Loan, to the date of the Final Recovery Determination, or to the

Due Date prior to the Distribution Date on which such amounts are to be

distributed if not in connection with a Final Recovery Determination; and third,

as a recovery of principal of the Mortgage Loan. If the amount of the recovery

so allocated to interest is less than the full amount of accrued and unpaid

interest due on such Mortgage Loan, the amount of such recovery will be

allocated by the Servicer as follows: first, to unpaid Servicing Fees; and

second, to the balance of the interest then due and owing. The portion of the

recovery so allocated to unpaid Servicing Fees shall be reimbursed to the

Servicer pursuant to Section 3.11(a)(iii). The portion of the recovery allocated

to interest (net of unpaid Servicing Fees) and the portion of the recovery

allocated to principal of the Mortgage Loan shall be applied as follows: first,

to reimburse the Servicer for any related unreimbursed Advances in accordance

with Section 3.11(a)(ii) and any other amounts reimbursable to the Servicer

pursuant to Section 3.11, and second, as part of the amounts to be transferred

to the Distribution Account in accordance with Section 3.10(b).

SECTION 3.17. Trustee to Cooperate; Release of

Mortgage Files.

Upon the payment in full of any Mortgage Loan, or the receipt

by the Servicer of a notification that payment in full shall be escrowed in a

manner customary for such purposes, the Servicer will notify the Trust

Administrator and the Trustee by a certification in the form of Exhibit E-2

(which certification shall include a statement to the effect that all amounts

received or to be received in connection with such payment which are required to

be deposited in the Collection Account pursuant to Section 3.10 have been or

will be so deposited) of a Servicing Officer and shall request delivery to it of

the Mortgage File. Upon receipt of such certification and request, the Trustee

shall promptly release the related Mortgage

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File to the Servicer. No expenses incurred in connection with any instrument of

satisfaction or deed of reconveyance shall be chargeable to the Collection

Account or the Distribution Account.

From time to time and as appropriate for the servicing or

foreclosure of any Mortgage Loan, including, for this purpose, collection under

any insurance policy relating to the Mortgage Loans, the Trustee shall, upon

request of the Servicer and delivery to the Trustee of a Request for Release in

the form of Exhibit E-l, release the related Mortgage File to the Servicer, and

the Trustee or the Servicer as attorney-in-fact of the Trustee shall, at the

direction of the Servicer, execute such documents as shall be necessary to the

prosecution of any such proceedings. Such Request for Release shall obligate the

Servicer to return each and every document previously requested from the

Mortgage File to the Trustee when the need therefor by the Servicer no longer

exists, unless the Mortgage Loan has been liquidated and the Liquidation

Proceeds relating to the Mortgage Loan have been deposited in the Collection

Account or the Mortgage File or such document has been delivered to an attorney,

or to a public trustee or other public official as required by law, for purposes

of initiating or pursuing legal action or other proceedings for the foreclosure

of the Mortgaged Property either judicially or non-judicially, and the Servicer

has delivered to the Trustee a certificate of a Servicing Officer certifying as

to the name and address of the Person to which such Mortgage File or such

document was delivered and the purpose or purposes of such delivery. Upon

receipt of a certificate of a Servicing Officer stating that such Mortgage Loan

was liquidated and that all amounts received or to be received in connection

with such liquidation that are required to be deposited into the Collection

Account have been so deposited, or that such Mortgage Loan has become an REO

Property, a copy of the Request for Release shall be released by the Trustee to

the Servicer.

Upon written certification of a Servicing Officer, the Trustee

shall execute and deliver to the Servicer, any court pleadings, requests for

trustee's sale or other documents necessary to the foreclosure or trustee's sale

in respect of a Mortgaged Property or to any legal action brought to obtain

judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a

deficiency judgment, or to enforce any other remedies or rights provided by the

Mortgage Note or Mortgage or otherwise available at law or in equity. Each such

certification shall include a request that such pleadings or documents be

executed by the Trustee and a statement as to the reason such documents or

pleadings are required and that the execution and delivery thereof by the

Trustee will not invalidate or otherwise affect the lien of the Mortgage, except

for the termination of such a lien upon completion of the foreclosure or

trustee's sale. So long as no Servicing Termination Event shall have occurred

and be continuing, the Servicer shall have the right to execute any and all such

court pleadings, requests and other documents as attorney-in-fact for, and on

behalf of the Trustee.

SECTION 3.18. Servicing Compensation.

As compensation for the activities of the Servicer, hereunder,

the Servicer shall be entitled to the Servicing Fee with respect to each

Mortgage Loan payable solely from payments of interest in respect of such

Mortgage Loan, subject to Section 3.24. In addition, the Servicer shall be

entitled to recover unpaid Servicing Fees out of Insurance Proceeds or

Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii) and out of

amounts derived from the operation and sale of an REO Property to the extent

permitted by Section 3.23. Except as set forth in Section 6.04 hereof, the right

to receive the

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Servicing Fee may not be transferred in whole or in part except in connection

with the transfer of all of the Servicer's responsibilities and obligations

under this Agreement to the extent permitted herein.

Additional servicing compensation in the form of assumption

fees, late payment charges and other miscellaneous fees (other than Prepayment

Charges) shall be retained by the Servicer only to the extent such fees or

charges are received by the Servicer. The Servicer shall also be entitled

pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account and

pursuant to Section 3.23(b) to withdraw from any REO Account, as additional

servicing compensation, interest or other income earned on deposits therein,

subject to Section 3.12. The Servicer shall be required to pay all expenses

incurred by it in connection with its servicing activities hereunder and shall

not be entitled to reimbursement therefor except as specifically provided

herein.

SECTION 3.19. Reports to the Trust Administrator

and the Trustee; Collection Account

Statements.

Not later than fifteen days after each Distribution Date, the

Servicer shall forward to the Trust Administrator, the Trustee and the Depositor

a statement prepared by the institution at which the Collection Account is

maintained setting forth the status of the Collection Account as of the close of

business on such Distribution Date and showing, for the period covered by such

statement, the aggregate amount of deposits into and withdrawals from the

Collection Account of each category of deposit specified in Section 3.10(a) and

each category of withdrawal specified in Section 3.11. Copies of such statement

shall be provided by the Trust Administrator to any Certificateholder and to any

Person identified to the Trust Administrator as a prospective transferee of a

Certificate, upon request at the expense of the requesting party, provided such

statement is delivered by the Servicer to the Trust Administrator.

SECTION 3.20. Statement as to Compliance.

The Servicer will deliver to, the Trust Administrator, the

Trustee and the Depositor not later than 120 days following the end of the

fiscal year of the Servicer, which as of the Closing Date ends on the last day

in December, an Officers' Certificate stating, as to each signatory thereof,

that (i) a review of the activities of the Servicer during the preceding year

and of performance under this Agreement has been made under such officers'

supervision and (ii) to the best of such officer's knowledge, based on such

review, the Servicer has fulfilled all of its obligations under this Agreement

throughout such year, or, if there has been a default in the fulfillment of any

such obligation, specifying each such default known to such officer and the

nature and status thereof. Copies of any such statement shall be provided by the

Trust Administrator to any Certificateholder and to any Person identified to the

Trust Administrator as a prospective transferee of a Certificate, upon request

at the expense of the requesting party, provided such statement is delivered by

the Servicer to the Trust Administrator.

SECTION 3.21. Independent Public Accountants'

Servicing Report.

Not later than 120 days following the end of each fiscal year

of the Servicer (which, as of the Closing Date, ends on the last day of

December), the Servicer, at its expense, shall cause a nationally

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recognized firm of independent certified public accountants to furnish to the

Servicer a report stating that (i) it has obtained a letter of representation

regarding certain matters from the management of the Servicer which includes an

assertion that the Servicer has complied with certain minimum residential

mortgage loan servicing standards, identified in the Uniform Single Attestation

Program for Mortgage Bankers established by the Mortgage Bankers Association of

America, with respect to the servicing of residential mortgage loans during the

most recently completed fiscal year and (ii) on the basis of an examination

conducted by such firm in accordance with standards established by the American

Institute of Certified Public Accountants, such representation is fairly stated

in all material respects, subject to such exceptions and other qualifications

that may be appropriate. Immediately upon receipt of such report, the Servicer

shall furnish a copy of such report to the Trust Administrator, the Trustee and

each Rating Agency. Copies of such statement shall be provided by the Trust

Administrator to any Certificateholder upon request at the Servicer's expense,

provided that such statement is delivered by the Servicer to the Trust

Administrator.

SECTION 3.22. Access to Certain Documentation.

The Servicer shall provide to the Office of Thrift

Supervision, the FDIC, and any other federal or state banking or insurance

regulatory authority that may exercise authority over any Certificateholder,

access to the documentation regarding the Mortgage Loans required by applicable

laws and regulations. Such access shall be afforded without charge, but only

upon reasonable request and during normal business hours at the offices of the

Servicer designated by it. In addition, access to the documentation regarding

the Mortgage Loans will be provided to any Certificateholder, the Trustee, the

Trust Administrator and to any Person identified to the Servicer, as a

prospective transferee of a Certificate, upon reasonable request during normal

business hours at the offices of the Servicer designated by it at the expense of

the Person requesting such access.

SECTION 3.23. Title, Management and Disposition of

REO Property.

(a) The deed or certificate of sale of any REO Property shall

be taken in the name of the Trustee, or its nominee, on behalf of the Trust Fund

and for the benefit of the Certificateholders. The Servicer, on behalf of REMIC

I, shall either sell any REO Property by the close of the third calendar year

following the calendar year in which REMIC I acquires ownership of such REO

Property for purposes of Section 860(a)(8) of the Code or request from the

Internal Revenue Service, no later than 60 days before the day on which the

three-year grace period would otherwise expire an extension of the three-year

grace period, unless the Servicer had delivered to the Trust Administrator and

the Trustee an Opinion of Counsel, addressed to the Trust Administrator, the

Trustee and the Depositor, to the effect that the holding by REMIC I of such REO

Property subsequent to three years after its acquisition will not result in the

imposition on any Trust REMIC created hereunder of taxes on "prohibited

transactions" thereof, as defined in Section 860F of the Code, or cause any

Trust REMIC hereunder to fail to qualify as a REMIC under Federal law at any

time that any Certificates are outstanding. The Servicer shall manage, conserve,

protect and operate each REO Property for the Certificateholders solely for the

purpose of its prompt disposition and sale in a manner which does not cause such

REO Property to fail to qualify as "foreclosure property" within the meaning of

Section 860G(a)(8) of the Code or result in the receipt by any Trust REMIC

created hereunder of any "income from non-permitted assets" within the meaning

of Section 860F(a)(2)(B) of the

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Code, or any "net income from foreclosure property" which is subject to taxation

under the REMIC Provisions.

(b) The Servicer shall segregate and hold all funds collected

and received in connection with the operation of any REO Property separate and

apart from its own funds and general assets and shall establish and maintain

with respect to REO Properties an account held in trust for the Trustee, on

behalf of the Trust Fund and for the benefit of the Certificateholders (the "REO

Account"), which shall be an Eligible Account. The Servicer shall be permitted

to allow the Collection Account to serve as the REO Account, subject to separate

ledgers for each REO Property. The Servicer shall be entitled to retain or

withdraw any interest income paid on funds deposited in the REO Account.

(c) The Servicer shall have full power and authority, subject

only to the specific requirements and prohibitions of this Agreement, to do any

and all things in connection with any REO Property as are consistent with the

manner in which the Servicer manages and operates similar property owned by the

Servicer or any of its Affiliates, all on such terms and for such period as the

Servicer deems to be in the best interests of Certificateholders. In connection

therewith, the Servicer shall deposit, or cause to be deposited, on a daily

basis in the REO Account all revenues received by it with respect to an REO

Property and shall withdraw therefrom funds necessary for the proper operation,

management and maintenance of such REO Property including, without limitation:

(i) all insurance premiums due and payable in respect of such

REO Property;

(ii) all real estate taxes and assessments in respect of such

REO Property that may result in the imposition of a lien thereon; and

(iii) all costs and expenses necessary to maintain such REO

Property.

To the extent that amounts on deposit in the REO Account with

respect to an REO Property are insufficient for the purposes set forth in

clauses (i) through (iii) above with respect to such REO Property, the Servicer

shall advance from its own funds such amount as is necessary for such purposes

if, but only if, the Servicer would make such advances if the Servicer owned the

REO Property and if in the Servicer's judgment, the payment of such amounts will

be recoverable from the rental or sale of the REO Property.

Subject to compliance with applicable laws and regulations as

shall at any time be in force, and notwithstanding the foregoing, the Servicer

shall not:

(i) permit the Trust Fund to enter into, renew or extend any

New Lease with respect to any REO Property, if the New Lease by its

terms will give rise to any income that does not constitute Rents from

Real Property;

(ii) permit any amount to be received or accrued under any New

Lease other than amounts that will constitute Rents from Real Property;

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(iii) authorize or permit any construction on any REO

Property, other than the completion of a building or other improvement

thereon, and then only if more than ten percent of the construction of

such building or other improvement was completed before default on the

related Mortgage Loan became imminent, all within the meaning of

Section 856(e)(4)(B) of the Code; or

(iv) allow any Person to Directly Operate any REO Property on

any date more than 90 days after its date of acquisition by the Trust

Fund;

unless, in any such case, the Servicer has obtained an Opinion of Counsel,

provided to the Servicer, the Trust Administrator and the Trustee, to the effect

that such action will not cause such REO Property to fail to qualify as

"foreclosure property" within the meaning of Section 860G(a)(8) of the Code at

any time that it is held by REMIC I, in which case the Servicer may take such

actions as are specified in such Opinion of Counsel.

The Servicer may contract with any Independent Contractor for

the operation and management of any REO Property, provided that:

(i) the terms and conditions of any such contract shall not be

inconsistent herewith;

(ii) any such contract shall require, or shall be administered

to require, that the Independent Contractor pay all costs and expenses

incurred in connection with the operation and management of such REO

Property, including those listed above and remit all related revenues

(net of such costs and expenses) to the Servicer as soon as

practicable, but in no event later than thirty days following the

receipt thereof by such Independent Contractor;

(iii) none of the provisions of this Section 3.23(c) relating

to any such contract or to actions taken through any such Independent

Contractor shall be deemed to relieve the Servicer of any of its duties

and obligations to the Trustee on behalf of the Trust Fund and for the

benefit of the Certificateholders with respect to the operation and

management of any such REO Property; and

(iv) the Servicer shall be obligated with respect thereto to

the same extent as if it alone were performing all duties and

obligations in connection with the operation and management of such REO

Property.

The Servicer shall be entitled to enter into any agreement

with any Independent Contractor performing services for it related to its duties

and obligations hereunder for indemnification of the Servicer by such

Independent Contractor, and nothing in this Agreement shall be deemed to limit

or modify such indemnification. The Servicer shall be solely liable for all fees

owed by it to any such Independent Contractor, irrespective of whether the

Servicer's compensation pursuant to Section 3.18 is sufficient to pay such fees.

(d) In addition to the withdrawals permitted under Section

3.23(c), the Servicer may from time to time make withdrawals from the REO

Account for any REO Property: (i) to pay itself unpaid

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Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse

itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made

in respect of such REO Property or the related Mortgage Loan. On the Servicer

Remittance Date, the Servicer shall withdraw from each REO Account maintained by

it and deposit into the Distribution Account in accordance with Section

3.10(d)(ii), for distribution on the related Distribution Date in accordance

with Section 4.01, the income from the related REO Property received during the

prior calendar month, net of any withdrawals made pursuant to Section 3.23(c) or

this Section 3.23(d).

(e) Subject to the time constraints set forth in Section

3.23(a), each REO Disposition shall be carried out by the Servicer at such price

and upon such terms and conditions as the Servicer shall deem necessary or

advisable, as shall be normal and usual in its Accepted Servicing Practices.

(f) The proceeds from the REO Disposition, net of any amount

required by law to be remitted to the Mortgagor under the related Mortgage Loan

and net of any payment or reimbursement to the Servicer as provided above, shall

be deposited in the Distribution Account in accordance with Section 3.10(d)(ii)

on the Servicer Remittance Date in the month following the receipt thereof for

distribution on the related Distribution Date in accordance with Section 4.01.

Any REO Disposition shall be for cash only (unless changes in the REMIC

Provisions made subsequent to the Startup Day allow a sale for other

consideration).

(g) The Servicer shall file information returns with respect

to the receipt of mortgage interest received in a trade or business, reports of

foreclosures and abandonments of any Mortgaged Property and cancellation of

indebtedness income with respect to any Mortgaged Property as required by

Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be

in form and substance sufficient to meet the reporting requirements imposed by

such Sections 6050H, 6050J and 6050P of the Code.

SECTION 3.24. Obligations of the Servicer in

Respect of Prepayment Interest

Shortfalls.

The Servicer shall deliver to the Trust Administrator for

deposit into the Distribution Account on or before 5:00 p.m. New York time on

the Servicer Remittance Date from its own funds an amount equal to the lesser of

(i) the aggregate of the Prepayment Interest Shortfalls attributable to

prepayments in full for the related Distribution Date resulting solely from

Principal Prepayments received by the Servicer during the related Prepayment

Period and (ii) 50% of its aggregate Servicing Fee for the most recently ended

Prepayment Period. The Servicer shall not have the right to reimbursement for

any amounts remitted to the Trust Administrator in respect of this Section 3.24.

The Servicer shall not be obligated to pay the amounts set forth in this Section

3.24 with respect to Relief Act Interest Shortfalls.

SECTION 3.25. [Reserved].

SECTION 3.26. Obligations of the Servicer in

Respect of Mortgage Rates and

Monthly Payments.

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In the event that a shortfall in any collection on or

liability with respect to any Mortgage Loan results from or is attributable to

adjustments to Mortgage Rates, Monthly Payments or Stated Principal Balances

that were made by the Servicer in a manner not consistent with the terms of the

related Mortgage Note and this Agreement, the Servicer, upon discovery or

receipt of notice thereof, immediately shall deliver to the Trust Administrator

for deposit in the Distribution Account from its own funds the amount of any

such shortfall and shall indemnify and hold harmless the Trust Fund, the Trust

Administrator, the Trustee, the Depositor and any successor Servicer in respect

of any such liability. Such indemnities shall survive the termination or

discharge of this Agreement.

SECTION 3.27. Net Wac Rate Carryover Reserve

Account.

(a) No later than the Closing Date, the Trust Administrator

shall establish and maintain with itself, as agent for the Trustee, a separate,

segregated trust account titled, "Net Wac Rate Carryover Reserve Account,

Citibank, N.A., as agent for U.S. Bank National Association, as Trustee, in

trust for the registered holders of Salomon Brothers Mortgage Securities VII,

Inc., Salomon Home Equity Loan Trust, Series 2002-WMC2, Asset Backed

Pass-Through Certificates." On the Closing Date, the Depositor will deposit, or

cause to be deposited, into the Net Wac Rate Carryover Reserve Account, $1,000.

(b) On each Distribution Date as to which there is a Net WAC

Rate Carryover Amount payable to the Class A Certificates or the Mezzanine

Certificates, the Trust Administrator has been directed by the Class CE

Certificateholders to, and therefore will, deposit into the Net Wac Rate

Carryover Reserve Account the amounts described in Section 4.01(a)(5)(xiii),

rather than distributing such amounts to the Class CE Certificateholders. On

each such Distribution Date, the Trust Administrator shall hold all such amounts

for the benefit of the Holders of the Class A Certificates and the Mezzanine

Certificates, and will distribute such amounts to the Holders of the Class A

Certificates and the Mezzanine Certificates in the amounts and priorities set

forth in Section 4.01(a). If no Net WAC Rate Carryover Amounts are payable on a

Distribution Date, the Trust Administrator shall deposit into the Net Wac Rate

Carryover Reserve Account on behalf of the Class CE Certificateholders, from

amounts otherwise distributable to the Class CE Certificateholders, an amount

such that when added to other amounts already on deposit in the Net Wac Rate

Carryover Reserve Account, the aggregate amount on deposit therein is equal to

$1,000.

(c) For federal and state income tax purposes, the Class CE

Certificateholders will be deemed to be the owners of the Net Wac Rate Carryover

Reserve Account and all amounts deposited into the Net Wac Rate Carryover

Reserve Account (other than the initial deposit therein of $1,000) shall be

treated as amounts distributed by REMIC II to the Holders of the Class CE

Certificates. Upon the termination of the Trust Fund, or the payment in full of

the Class A Certificates and the Mezzanine Certificates, all amounts remaining

on deposit in the Net Wac Rate Carryover Reserve Account will be released by the

Trust Fund and distributed to the Class CE Certificateholders or their

designees. The Net Wac Rate Carryover Reserve Account will be part of the Trust

Fund but not part of any Trust REMIC and any payments to the Holders of the

Class A Certificates or the Mezzanine Certificates of Net WAC Rate Carryover

Amounts will not be payments with respect to a "regular interest" in a REMIC

within the meaning of Code Section 860(G)(a)(1).

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(d) By accepting a Class CE Certificate, each Class CE

Certificateholder hereby agrees to direct the Trust Administrator, and the Trust

Administrator hereby is directed to deposit into the Net Wac Rate Carryover

Reserve Account the amounts described above on each Distribution Date as to

which there is any Net WAC Rate Carryover Amount rather than distributing such

amounts to the Class CE Certificateholders. By accepting a Class CE Certificate,

each Class CE Certificateholder further agrees that such direction is given for

good and valuable consideration, the receipt and sufficiency of which is

acknowledged by such acceptance.

(e) At the direction of the Holders of a majority in

Percentage Interest in the Class CE Certificates, the Trust Administrator shall

direct any depository institution maintaining the Net Wac Rate Carryover Reserve

Account to invest the funds in such account in one or more Permitted Investments

bearing interest or sold at a discount, and maturing, unless payable on demand,

(i) no later than the Business Day immediately preceding the date on which such

funds are required to be withdrawn from such account pursuant to this Agreement,

if a Person other than the Trust Administrator or an Affiliate manages or

advises such investment, and (ii) no later than the date on which such funds are

required to be withdrawn from such account pursuant to this Agreement, if the

Trust Administrator or an Affiliate manages or advises such investment. If no

investment direction of the Holders of a majority in Percentage Interest in the

Class CE Certificates with respect to the Net Wac Rate Carryover Reserve Account

is received by the Trust Administrator, the Trust Administrator shall invest the

funds in such account in Permitted Investments managed by the Trust

Administrator or an Affiliate of the kind described in clause (vi) of the

definition of Permitted Investments. All income and gain earned upon such

investment shall be deposited into the Net Wac Rate Carryover Reserve Account.

(f) For federal tax return and information reporting, the

right of the Class A Certificateholders and the Mezzanine Certificateholders to

receive payments from the Net Wac Rate Carryover Reserve Account in respect of

any Net Wac Rate Carryover Amount shall be assigned a value of zero.

SECTION 3.28. Advance Facility.

(a) The Servicer is hereby authorized to enter into a

financing or other facility (any such arrangement, an "Advance Facility"), the

documentation for which complies with Section 3.28(e) below, under which (1) the

Servicer assigns or pledges its rights under this Agreement to be reimbursed for

any or all Advances and/or Servicing Advances to (i) a special-purpose

bankruptcy-remote entity (an "SPV") (or to a Person, who simultaneously assigns

or pledges such rights to an SPV) or (ii) a lender (a "Lender"), which, in the

case of an SPV, in turn, directly or through other assignees and/or pledgees,

assigns or pledges such rights to a Person, which may include a trustee acting

on behalf of holders of debt instruments (any such Person or any such Lender, an

"Advance Financing Person"), and/or (2) an Advance Financing Person agrees to

fund some or all Advances and/or Servicing Advances required to be made by the

Servicer pursuant to this Agreement. No consent of the Trustee,

Certificateholders or any other party shall be required before the Servicer may

enter into an Advance Facility nor shall the Trustee or the Certificateholders

be a third party beneficiary of any obligation of an Advance Financing Person to

the Servicer. Notwithstanding the existence of any Advance Facility under which

an Advance Financing

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Person agrees to fund Advances and/or Servicing Advances, the Servicer shall

remain obligated pursuant to this Agreement to make Advances and/or Servicing

Advances pursuant to and as required by this Agreement, and shall not be

relieved of such obligations by virtue of such Advance Facility. If a Servicer

enters into an Advance Facility, and for so long as an Advance Financing Person

remains entitled to receive reimbursement for any Advances and/or Servicing

Advances outstanding and previously unreimbursed pursuant to this Agreement,

then, to the extent prohibited under such Advance Facility, such Servicer shall

not be permitted to reimburse itself for Advances and/or Servicing Advances

pursuant to Section 3.11(a) of this Agreement, but instead such Servicer's

assignee and the designee (the "Servicer's Assignee") shall have the right to

receive from the Collection Account collections that such Servicer would

otherwise have the right to receive from the Collection Account pursuant to said

Section 3.11(a) of this Agreement, amounts available to reimburse previously

unreimbursed Advances and/or Servicing Advances ("Advance Reimbursement

Amounts").

(b) If the Servicer enters into an Advance Facility, the

Servicer and the related Advance Financing Person shall deliver to the Trustee a

written notice of the existence of such Advance Facility (an "Advance Facility

Notice"), stating the identity of the Advance Financing Person and the

Servicer's Assignee, and specifying what Advances and/or Servicing Advances are

covered by the Advance Facility. An Advance Facility may be terminated by the

joint written direction of the Servicer and the related Advance Financing

Person.

(c) Advance Reimbursement Amounts (i) shall consist solely of

amounts in respect of Advances and/or Servicing Advances for which the Servicer

would be permitted to reimburse itself in accordance with Section 3.11(a)

hereof, assuming the Servicer had made the related Advance(s) and/or Servicing

Advance(s) and (ii) shall not consist of amounts payable to a successor Servicer

in accordance with Section 3.11(a) to the extent permitted under Section 3.28(e)

below.

(d) An Advance Financing Person who receives an assignment or

pledge of rights to receive Advance Reimbursement Amounts and/or whose

obligations are limited to the funding of Advances and/or Servicing Advances

pursuant to an Advance Facility shall not be required to meet the criteria for

qualification as a Sub-Servicer.

(e) As between a predecessor Servicer and its Advance

Financing Person, on the one hand, and a successor Servicer and its Advance

Financing Person if any, on the other hand, Advance Reimbursement Amounts on a

loan-by-loan basis with respect to each Mortgage Loan as to which an Advance

and/or Servicing Advance shall have been made and be outstanding shall be

allocated on a "first-in, first out" ("FIFO") basis. In the event that some or

all of an Advance Reimbursement Amount related to Advances and/or Servicing

Advances that were made by a Person other than such predecessor Servicer or its

related Advance Financing Person shall have been paid in error to the Servicer's

Assignee related to such predecessor Servicer, then such Servicer's Assignee

shall be required to remit any portion of such Advance Reimbursement Amount to

each Person entitled to such portion of such Advance Reimbursement Amount. At

any time when an Advance Financing Person shall have ceased funding Advances

and/or Servicing Advances, including without limitation a servicing transfer

pursuant to Article VII, and the Servicer's Assignee shall have received from

the Collection Account Advance Reimbursement

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Amounts sufficient to reimburse all Advances and/or Servicing Advances, the

right to reimbursement for which were assigned to the Servicer's Assignee, then

the Servicer's Assignee and the Advance Financing Person and the Servicer

related to such Servicer's Assignee and Advance Financing Person shall deliver a

written notice to the Trustee terminating the Advance Facility. Without limiting

the generality of the foregoing, the Servicer shall remain entitled to be

reimbursed by the Advance Financing Person for all Advances and/or Servicing

Advances funded by the Servicer to the extent the related Advance Reimbursement

Amounts have not been assigned or pledged to such Advance Financing Person or

Servicer's Assignee.

(f) For purposes of any certification of a Servicing Officer

of the Servicer made pursuant to Section 4.06(iii), any Nonrecoverable Advance

or Nonrecoverable Servicing Advance referred to therein may have been made by

such Servicer or any predecessor Servicer. In making its determination that any

Advance or Servicing Advance theretofore made has become a Nonrecoverable

Advance or Nonrecoverable Servicing Advance, the Servicer shall apply the same

criteria in making such determination regardless of whether such Advance or

Servicing Advance shall have been made by the Servicer or any predecessor

Servicer.

ARTICLE IV

PAYMENTS TO CERTIFICATEHOLDERS

SECTION 4.01. Distributions.

(a)(1) On each Distribution Date, the following amounts, in

the following order of priority, shall be distributed by REMIC I to REMIC II on

account of the REMIC I Group I Regular Interests or withdrawn from the

Distribution Account and distributed to the holders of the Class R-I Interest,

as the case may be:

(i) first, to Holders of the REMIC I Regular Interest

I-LTA-1, in an amount equal to (A) the Uncertificated Interest

for such Distribution Date, plus (B) any amounts in respect

thereof remaining unpaid from previous Distribution Dates.

Amounts payable as Uncertificated Interest in respect of REMIC

I Regular Interest I-LTZZ shall be reduced when the sum of the

REMIC I Group I Overcollateralization Amount is less than the

REMIC I Group I Required Overcollateralized Amount, by the

lesser of (x) the amount of such difference and (y) the

Maximum Uncertificated Interest Deferral Amount. Amounts

payable as Uncertificated Interest in respect of REMIC I

Regular Interest I- LTZZ shall be reduced when the REMIC I

Group I Overcollateralized Amount is less than the REMIC I

Group I Required Overcollateralization Amount, by the lesser

of (x) the amount of such difference and (y) the Maximum

I-LTZZ Uncertificated Interest Deferral Amount and such amount

will be payable to the Holders of REMIC I Regular Interest I-

LTA-1 in the same proportion as the Overcollateralization

Increase Amount is allocated to the Corresponding

Certificates;

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(ii) second, to the Holders of REMIC I Group I Regular

Interests, in an amount equal to the remainder of the

Available Distribution Amount for such Distribution Date after

the distributions made pursuant to clause (i) above, allocated

as follows:

(a) to the Holders of REMIC I Regular Interest

I-LTAA, 98.000% of such remainder (less the amount

payable in clause (d) below), until the

Uncertificated Balance of such REMIC I Regular

Interest is reduced to zero;

(b) to the Holders of REMIC I Regular Interest

I-LTA-1, 1.000% of such remainder (less the amount

payable in clause (d) below), in the same proportion

as principal payments are allocated to the

Corresponding Certificates, until the Uncertificated

Balances of such REMIC I Regular Interests are

reduced to zero;

(c) to the Holders of REMIC I Regular Interest

I-LTZZ, 1.000% of such remainder (less the amount

payable in clause (d) below), until the

Uncertificated Balance of such REMIC I Regular

Interest is reduced to zero; then

(d) to the Holders of REMIC I Regular Interest I-LTP,

on the Distribution Date immediately following the

expiration of the latest Prepayment Charge as

identified on the Mortgage Loan Schedule or any

Distribution Date thereafter until $100 has been

distributed pursuant to this clause; and

(e) any remaining amount to the Holders of the Class

R Certificates (as Holder of the Class R-I Interest);

provided, however, that 98.000% and 2.000% of any principal payments that are

attributable to an Overcollateralization Reduction Amount shall be allocated to

Holders of REMIC I Regular Interest I- LTAA and REMIC I Regular Interest I-LTZZ,

respectively.

(2) On each Distribution Date, the following amounts, in

the following order of priority, shall be distributed by REMIC I to REMIC II on

account of the REMIC I Group II Regular Interests or withdrawn from the

Distribution Account and distributed to the holders of the Class R-I Interest,

as the case may be:

(i) first, to Holders of the REMIC I Regular Interest

II-LTA-2, REMIC I Regular Interest II-LTM1, REMIC I Regular

Interest II-LTM2, REMIC I Regular Interest II-LTM3, REMIC I

Regular Interest II-LTM4 and REMIC I Regular Interest II-LTM5,

in an amount equal to (A) the Uncertificated Interest for such

Distribution Date, plus (B) any amounts in respect thereof

remaining unpaid from previous Distribution Dates. Amounts

payable as Uncertificated Interest in respect of REMIC I

Regular Interest II- LTZZ shall be reduced when the sum of the

REMIC I Group II Overcollateralization Amount is less than the

REMIC I Group II Required Overcollateralized Amount, by the

lesser of (x) the amount of such difference and (y) the

Maximum Uncertificated Interest

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Deferral Amount. Amounts payable as Uncertificated Interest in

respect of REMIC I Regular Interest II-LTZZ shall be reduced

when the REMIC I Group II Overcollateralized Amount is less

than the REMIC I Group II Required Overcollateralization

Amount, by the lesser of (x) the amount of such difference and

(y) the Maximum II-LTZZ Uncertificated Interest Deferral

Amount and such amount will be payable to the Holders of REMIC

I Regular Interest II-LTA-1, REMIC I Regular Interest II-LTM1,

REMIC I Regular Interest II-LTM2, REMIC I Regular Interest

II-LTM3, REMIC I Regular Interest II- LTM4 and REMIC I Regular

Interest II-LTM5 in the same proportion as the

Overcollateralization Increase Amount is allocated to the

Corresponding Certificates;

(ii) second, to the Holders of REMIC I Group II Regular

Interests, in an amount equal to the remainder of the

Available Distribution Amount for such Distribution Date after

the distributions made pursuant to clause (i) above, allocated

as follows:

(a) to the Holders of REMIC I Regular Interest

II-LTAA, 98.000% of such remainder (less the amount

payable in clause (d) below), until the

Uncertificated Balance of such REMIC I Regular

Interest is reduced to zero;

(b) to the Holders of REMIC I Regular Interest

II-LTA-1, REMIC I Regular Interest II-LTM1, REMIC I

Regular Interest II-LTM2, REMIC I Regular Interest

II-LTM3, REMIC I Regular Interest II-LTM4 and REMIC I

Regular Interest II- LTM5, 1.000% of such remainder

(less the amount payable in clause (d) below), in the

same proportion as principal payments are allocated

to the Corresponding Certificates, until the

Uncertificated Balances of such REMIC I Regular

Interests are reduced to zero;

(c) to the Holders of REMIC I Regular Interest

II-LTZZ, 1.000% of such remainder (less the amount

payable in clause (d) below), until the

Uncertificated Balance of such REMIC I Regular

Interest is reduced to zero; then

(d) any remaining amount to the Holders of the Class

R Certificates (as Holder of the Class R-I Interest);

provided, however, that 98.000% and 2.000% of any principal payments that are

attributable to an Overcollateralization Reduction Amount shall be allocated to

Holders of REMIC I Regular Interest II- LTAA and REMIC I Regular Interest

II-LTZZ, respectively.

(3) On each Distribution Date, the Trust Administrator shall

withdraw from the Distribution Account an amount equal to the applicable

Interest Remittance Amount and distribute to the Certificateholders the

following amounts, in the following order of priority:

(i) to the Holders of the Class A Certificates, PRO RATA based

on their entitlements, an amount equal to the Senior Interest

Distribution Amount allocable to the Class A Certificates;

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(ii) to the Holders of the Class M-1 Certificates, an amount

equal to the Interest Distribution Amount allocable to the Class M-1

Certificates;

(iii) to the Holders of the Class M-2 Certificates, an amount

equal to the Interest Distribution Amount allocable to the Class M-2

Certificates;

(iv) to the Holders of the Class M-3 Certificates, an amount

equal to the Interest Distribution Amount allocable to the Class M-3

Certificates;

(v) to the Holders of the Class M-4 Certificates, an amount

equal to the Interest Distribution Amount allocable to the Class M-4

Certificates; and

(v) to the Holders of the Class M-5 Certificates, an amount

equal to the Interest Distribution Amount allocable to the Class M-5

Certificates.

(4) On each Distribution Date, the Trust Administrator shall

withdraw from the Distribution Account an amount equal to the Principal

Distribution Amount and distribute to the Certificateholders the following

amounts, in the following order of priority:

(i) On each Distribution Date (a) prior to the Stepdown Date

or (b) on which a Trigger Event is in effect, the Principal

Distribution Amount shall be distributed in the following order of

priority;

first, to the Holders of the Class A Certificates,

the Group I Principal Distribution Amount and the Group II Principal

Distribution Amount, as applicable, until the Certificate Principal

Balance of such Class has been reduced to zero;

second, to the Holders of the Class M-1 Certificates,

the Principal Distribution Amount remaining until the Certificate

Principal Balance of such Class has been reduced to zero;

third, to the Holders of the Class M-2 Certificates,

the Principal Distribution Amount remaining until the Certificate

Principal Balance of such Class has been reduced to zero;

fourth, to the Holders of the Class M-3 Certificates,

the Principal Distribution Amount remaining until the Certificate

Principal Balance of such Class has been reduced to zero;

fifth, to the Holders of the Class M-4 Certificates,

the Principal Distribution Amount remaining until the Certificate

Principal Balance of such Class has been reduced to zero and

sixth, to the Holders of the Class M-5 Certificates,

the Principal Distribution Amount remaining until the Certificate

Principal Balance of such Class has been reduced to zero.

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(ii) On each Distribution Date (a) on or after the Stepdown

Date and (b) on which a Trigger Event is not in effect, the Principal

Distribution Amount shall be distributed in the following order of

priority;

first, the Class A Principal Distribution Amount

shall be distributed to the Holders of the Class A Certificates, the

Group I Principal Distribution Amount and the Group II Principal

Distribution Amount, as applicable, until the Certificate Principal

Balance of such Class has been reduced to zero;

second, the Class M-1 Principal Distribution Amount

shall be distributed to the Holders of the Class M-1 Certificates,

until the Certificate Principal Balance of such Class has been reduced

to zero;

third, the Class M-2 Principal Distribution Amount

shall be distributed to the Holders of the Class M-2 Certificates,

until the Certificate Principal Balance of such Class has been reduced

to zero;

fourth, the Class M-3 Principal Distribution Amount

shall be distributed to the Holders of the Class M-3 Certificates,

until the Certificate Principal Balance of such Class has been reduced

to zero;

fifth, the Class M-4 Principal Distribution Amount

shall be distributed to the Holders of the Class M-4 Certificates,

until the Certificate Principal Balance of such Class has been reduced

to zero; and

sixth, the Class M-5 Principal Distribution Amount

shall be distributed to the Holders of the Class M-5 Certificates,

until the Certificate Principal Balance of such Class has been reduced

to zero.

(5) On each Distribution Date, the Net Monthly Excess Cashflow

(or, in the case of clause (i) below, the Net Monthly Excess Cashflow exclusive

of any Overcollateralization Reduction Amount) shall be distributed by the Trust

Administrator as follows:

(i) to the Holders of the Class or Classes of

Certificates then entitled to receive distributions in respect of

principal, as part of the Principal Distribution Amount in an amount

equal to the Overcollateralization Increase Amount for the

Certificates, applied to reduce the Certificate Principal Balance of

such Certificates until the aggregate Certificate Principal Balance of

such Certificates is reduced to zero;

(ii) to the Holders of the Class M-1 Certificates, in

an amount equal to the Interest Carry Forward Amount allocable to such

Class of Certificates;

(iii) to the Holders of the Class M-2 Certificates,

in an amount equal to the

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Interest Carry Forward Amount allocable to such Class of Certificates;

(iv) to the Holders of the Class M-3 Certificates, in

an amount equal to the Interest Carry Forward Amount allocable to such

Class;

(v) to the Holders of the Class M-4 Certificates, in

an amount equal to the Interest Carry Forward Amount allocable to such

Class;

(vi) to the Holders of the Class M-5 Certificates, in

an amount equal to the Interest Carry Forward Amount allocable to such

Class;

(vii) to the Holders of the Class A Certificates, in

an amount equal to the aggregate of any Prepayment Interest Shortfalls

(to the extent not covered by payments pursuant to Section 3.24) and

any Relief Act Interest Shortfall on the Mortgage Loans allocated to

such Certificates;

(viii) to the Holders of the Class M-1 Certificates,

in an amount equal to the aggregate of any Prepayment Interest

Shortfalls (to the extent not covered by payments pursuant to Section

3.24) and any Relief Act Interest Shortfall on the Mortgage Loans

allocated to such Certificates;

(ix) to the Holders of the Class M-2 Certificates, in

an amount equal to the aggregate of any Prepayment Interest Shortfalls

(to the extent not covered by payments pursuant to Section 3.24) and

any Relief Act Interest Shortfall on the Mortgage Loans allocated to

such Certificates;

(x) to the Holders of the Class M-3 Certificates, in

an amount equal to the aggregate of any Prepayment Interest Shortfalls

(to the extent not covered by payments pursuant to Section 3.24) and

any Relief Act Interest Shortfall on the Mortgage Loans allocated to

such Certificates;

(xi) to the Holders of the Class M-4 Certificates, in

an amount equal to the aggregate of any Prepayment Interest Shortfalls

(to the extent not covered by payments pursuant to Section 3.24) and

any Relief Act Interest Shortfall on the Mortgage Loans allocated to

such Certificates;

(xii) to the Holders of the Class M-5 Certificates,

in an amount equal to the aggregate of any Prepayment Interest

Shortfalls (to the extent not covered by payments pursuant to Section

3.24) and any Relief Act Interest Shortfall on the Mortgage Loans

allocated to such Certificates;

(xiii) to the Net Wac Rate Carryover Reserve Account,

the amount required by Section 3.27(b);

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(xiv) to the Holders of the Class CE Certificates the

Interest Distribution Amount and any remaining Overcollateralization

Reduction Amount for such Distribution Date; and

(xv) to the Holders of the Class R Certificates, any

remaining amounts; provided that if such Distribution Date is the

Distribution Date immediately following the expiration of the latest

Prepayment Charge term on a Mortgage Loan as identified on the Mortgage

Loan Schedule or any Distribution Date thereafter, then any such

remaining amounts will be distributed first, to the Holders of the

Class P Certificates, until the Certificate Principal Balance thereof

has been reduced to zero; and second, to the Holders of the Class R

Certificates.

On each Distribution Date, after making the distributions of

the Available Distribution Amount as set forth above, the Trust Administrator

will FIRST, withdraw from the Net WAC Rate Carryover Reserve Account all income

from the investment of funds in the Net WAC Rate Carryover Reserve Account and

distribute such amount to the Class CE Certificates, and SECOND, withdraw from

the Net WAC Rate Carryover Reserve Account, to the extent of amounts remaining

on deposit therein, the amount of any Net WAC Rate Carryover Amount with respect

to the Class A Certificates and the Mezzanine Certificates for such Distribution

Date and distribute such amount first, to the Class A Certificates; second, to

the Class M-1 Certificates, third, to the Class M-2 Certificates, fourth, to the

Class M-3 Certificates, fifth, to the Class M-4 Certificates and sixth, to the

Class M-5 Certificates, in each case to the extent such Net WAC Carryover Amount

is allocable to each such Class.

With respect to any distributions to be made on the Class M-4

Certificates, the Class M-5 Certificates, the Class CE Certificates or the Class

P Certificates pursuant to Section 4.01(a)(3), (4) or (5), such distributions

will be made first, on the Class M-4 Interest, the Class M-5 Interest, the Class

CE Interest or the Class P Interest, as applicable, and then, on the related

Class of Certificates.

(b) On each Distribution Date, the Trust Administrator shall

withdraw any amounts then on deposit in the Distribution Account that represent

Prepayment Charges collected by the Servicer in connection with the Principal

Prepayment of any of the Mortgage Loans or any Servicer Prepayment Charge

Payment Amount and shall distribute such amounts to the Holders of the Class P

Interest. Such distributions shall not be applied to reduce the Certificate

Principal Balance of the Class P Interest.

(c) All distributions made with respect to each Class of

Certificates on each Distribution Date shall be allocated PRO RATA among the

outstanding Certificates in such Class based on their respective Percentage

Interests. Payments in respect of each Class of Certificates on each

Distribution Date will be made to the Holders of the respective Class of record

on the related Record Date (except as otherwise provided in Section 4.01(e) or

Section 9.01 respecting the final distribution on such Class), based on the

aggregate Percentage Interest represented by their respective Certificates, and

shall be made by wire transfer of immediately available funds to the account of

any such Holder at a bank or other entity having appropriate facilities

therefor, if such Holder shall have so notified the Trust Administrator in

writing at least five Business Days prior to the Record Date immediately prior

to such Distribution Date and is the registered owner of Certificates having an

initial aggregate Certificate Principal Balance or Notional Amount that is in

excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the initial

Certificate Principal Balance

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or Notional Amount of such Class of Certificates, or otherwise by check mailed

by first class mail to the address of such Holder appearing in the Certificate

Register. The final distribution on each Certificate will be made in like

manner, but only upon presentment and surrender of such Certificate at the

Corporate Trust Office of the Trust Administrator or such other location

specified in the notice to Certificateholders of such final distribution.

Each distribution with respect to a Book-Entry Certificate

shall be paid to the Depository, as Holder thereof, and the Depository shall be

responsible for crediting the amount of such distribution to the accounts of its

Depository Participants in accordance with its normal procedures. Each

Depository Participant shall be responsible for disbursing such distribution to

the Certificate Owners that it represents and to each indirect participating

brokerage firm (a "brokerage firm" or "indirect participating firm") for which

it acts as agent. Each brokerage firm shall be responsible for disbursing funds

to the Certificate Owners that it represents. None of the Trust Administrator,

the Trustee, the Depositor or the Servicer shall have any responsibility

therefor except as otherwise provided by this Agreement or applicable law.

(d) The rights of the Certificateholders to receive

distributions in respect of the Certificates, and all interests of the

Certificateholders in such distributions, shall be as set forth in this

Agreement. None of the Holders of any Class of Certificates, the Trust

Administrator, the Trustee or the Servicer shall in any way be responsible or

liable to the Holders of any other Class of Certificates in respect of amounts

properly previously distributed on the Certificates.

(e) Except as otherwise provided in Section 9.01, whenever the

Trust Administrator expects that the final distribution with respect to any

Class of Certificates will be made on the next Distribution Date, the Trust

Administrator shall, no later than three (3) days before the related

Distribution Date, mail to each Holder on such date of such Class of

Certificates a notice to the effect that:

(i) the Trust Administrator expects that the final

distribution with respect to such Class of Certificates will be made on

such Distribution Date but only upon presentation and surrender of such

Certificates at the office of the Trust Administrator therein

specified, and

(ii) no interest shall accrue on such Certificates from and

after the end of the related Interest Accrual Period.

Any funds not distributed to any Holder or Holders of

Certificates of such Class on such Distribution Date because of the failure of

such Holder or Holders to tender their Certificates shall, on such date, be set

aside and held in trust by the Trust Administrator and credited to the account

of the appropriate non-tendering Holder or Holders. If any Certificates as to

which notice has been given pursuant to this Section 4.01(e) shall not have been

surrendered for cancellation within six months after the time specified in such

notice, the Trust Administrator shall mail a second notice to the remaining

non-tendering Certificateholders to surrender their Certificates for

cancellation in order to receive the final distribution with respect thereto. If

within one year after the second notice all such Certificates shall not have

been surrendered for cancellation, the Trust Administrator shall, directly or

through an agent, mail a final notice to the remaining non-tendering

Certificateholders concerning surrender of their Certificates but shall

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continue to hold any remaining funds for the benefit of non-tendering

Certificateholders. The costs and expenses of maintaining the funds in trust and

of contacting such Certificateholders shall be paid out of the assets remaining

in such trust fund. If within one year after the final notice any such

Certificates shall not have been surrendered for cancellation, the Trust

Administrator shall pay to Salomon Smith Barney Inc. all such amounts, and all

rights of non-tendering Certificateholders in or to such amounts shall thereupon

cease. No interest shall accrue or be payable to any Certificateholder on any

amount held in trust by the Trust Administrator as a result of such

Certificateholder's failure to surrender its Certificate(s) for final payment

thereof in accordance with this Section 4.01(e). Any such amounts held in trust

by the Trust Administrator shall be held in an Eligible Account and the Trust

Administrator may direct any depository institution maintaining such account to

invest the funds in one or more Permitted Investments. All income and gain

realized from the investment of funds deposited in such accounts held in trust

by the Trust Administrator shall be for the benefit of the Trust Administrator;

provided, however, that the Trust Administrator shall deposit in such account

the amount of any loss of principal incurred in respect of any such Permitted

Investment made with funds in such accounts immediately upon the realization of

such loss.

(f) Notwithstanding anything to the contrary herein, (i) in no

event shall the Certificate Principal Balance of a Class A Certificate or a

Mezzanine Certificate be reduced more than once in respect of any particular

amount allocated to such Certificate in respect of Realized Losses pursuant to

Section 4.04 and (ii) in no event shall the Uncertificated Balance of a REMIC I

Regular Interest be reduced more than once in respect of any particular amount

both (a) allocated to such REMIC I Regular Interest in respect of Realized

Losses pursuant to Section 4.04 and (b) distributed on such REMIC I Regular

Interest in reduction of the Uncertificated Balance thereof pursuant to this

Section 4.01.

SECTION 4.02. Statements to Certificateholders.

On each Distribution Date, the Trust Administrator shall

prepare and make available on its website at www.sf.citidirect.com for access by

each Holder of the Regular Certificates, a statement as to the distributions

made on such Distribution Date setting forth:

(i) the amount of the distribution made on such Distribution

Date to the Holders of the Certificates of each Class allocable to

principal, and the amount of the distribution made on such Distribution

Date to the Holders of the Class P Interest and the Class P

Certificates allocable to Prepayment Charges;

(ii) the amount of the distribution made on such Distribution

Date to the Holders of the Certificates of each Class allocable to

interest;

(iii) the aggregate Servicing Fee received by the Servicer

during the related Due Period and such other customary information as

the Trust Administrator deems necessary or desirable, or which a

Certificateholder reasonably requests, to enable Certificateholders to

prepare their tax returns;

(iv) the aggregate amount of Advances for such Distribution

Date;

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(v) the aggregate Stated Principal Balance of the Mortgage

Loans and any REO Properties as of the close of business on such

Distribution Date;

(vi) the number, aggregate principal balance, weighted average

remaining term to maturity and weighted average Mortgage Rate of the

Mortgage Loans as of the related Due Date;

(vii) the number and aggregate unpaid principal balance of

Mortgage Loans (a) delinquent 30 to 59 days, (b) delinquent 60 to 89

days, (c) delinquent 90 or more days, in each case, as of the last day

of the preceding calendar month, (d) as to which foreclosure

proceedings have been commenced and (e) with respect to which the

related Mortgagor has filed for protection under applicable bankruptcy

laws, with respect to whom bankruptcy proceedings are pending or with

respect to whom bankruptcy protection is in force;

(viii) with respect to any Mortgage Loan that became an REO

Property during the preceding calendar month, the loan number of such

Mortgage Loan, the unpaid principal balance and the Stated Principal

Balance of such Mortgage Loan as of the date it became an REO Property;

(ix) the book value of any REO Property as of the close of

business on the last Business Day of the calendar month preceding the

Distribution Date;

(x) the aggregate amount of Principal Prepayments made during

the related Prepayment Period;

(xi) the aggregate amount of Realized Losses incurred during

the related Prepayment Period (or, in the case of Bankruptcy Losses

allocable to interest, during the