POOLING AND SERVICING AGREEMENT

Pooling and Servicing Agreement

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NOMURA ASSET ACCEPTANCE CORPORATION, | NOMURA CREDIT & CAPITAL, INC., | HSBC BANK USA, NATIONAL ASSOCIATION

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Title: POOLING AND SERVICING AGREEMENT
Governing Law: Delaware Date: 10/17/2005

EXECUTION COPY

NOMURA ASSET ACCEPTANCE CORPORATION,

Depositor

NOMURA CREDIT & CAPITAL, INC.,

Seller

GMAC MORTGAGE CORPORATION

Servicer

HSBC BANK USA, NATIONAL ASSOCIATION

Trustee

and

WELLS FARGO BANK, N.A.

Securities Administrator, Master Servicer and Custodian

____________________

POOLING AND SERVICING AGREEMENT

Dated as of September 1, 2005

________________________________________

NOMURA ASSET ACCEPTANCE CORPORATION

ALTERNATIVE LOAN TRUST, SERIES 2005-S3

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS

Section 1.01

Defined Terms

Section 1.02

Interest Calculations.

ARTICLE II CONVEYANCE OF TRUST FUND REPRESENTATIONS AND

WARRANTIES

Section 2.01

Conveyance of Trust Fund.

Section 2.02

Acceptance of the Mortgage Loans.

Section 2.03

Representations, Warranties and Covenants of the Servicer, the Master

Servicer and the Seller.

Section 2.04

Representations and Warranties of the Depositor.

Section 2.05

Delivery of Opinion of Counsel in Connection with Substitutions and

Repurchases.

Section 2.06

REMIC Matters.

Section 2.07

Conveyance of Lower Tier REMIC Regular Interests and Acceptance

Thereof; Issuance of Certificates.

Section 2.08

Establishment of Trust.

ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE

LOANS

Section 3.01

The Servicer to Act as Servicer.

Section 3.02

Due-on-Sale Clauses; Assumption Agreements.

Section 3.03

Subservicers.

Section 3.04

Documents, Records and Funds in Possession of the Servicer

To Be Held for Trustee.

Section 3.05

Maintenance of Hazard Insurance.

Section 3.06

Presentment of Claims and Collection of Proceeds.

Section 3.07

Maintenance of Insurance Policies.

Section 3.08

Maintenance of Fidelity Bond and Errors and Omissions Insurance.

Section 3.09

Realization Upon Defaulted Mortgage Loans; Determination of Excess

Liquidation Proceeds and Realized Losses; Repurchases of Certain

Mortgage Loans.

Section 3.10

Servicing Compensation.

Section 3.11

REO Property.

Section 3.12

Liquidation Reports.

Section 3.13

Annual Certificate as to Compliance.

Section 3.14

Annual Independent Certified Public Accountants’ Servicing Report.

Section 3.15

Books and Records.

Section 3.16

The Trustee.

Section 3.17

REMIC-Related Covenants.

Section 3.18

Reimbursement of Costs and Expenses.

Section 3.19

Release of Mortgage Files.

Section 3.20

Documents, Records and Funds in Possession of the Servicer to be held

for Trustee.

Section 3.21

Possession of Certain Insurance Policies and Documents.

Section 3.22

UCC.

Section 3.23

Optional Purchase of Defaulted Mortgage Loans.

Section 3.24

Special Serviced Mortgage Loans.

ARTICLE IIIA ADMINISTRATION AND MASTER SERVICING OF THE

MORTGAGE LOANS

Section 3A.01. Master Servicer.

Section 3A.02. Monitoring of Servicer.

Section 3A.03. Fidelity Bond.

Section 3A.04. Power to Act; Procedures.

Section 3A.05. [Reserved].

Section 3A.06. Documents, Records and Funds in Possession of Master Servicer To Be

Held for Trustee.

Section 3A.07. Possession of Certain Insurance Policies and Documents.

Section 3A.08. Compensation for the Master Servicer.

Section 3A.09. Annual Officer’s Certificate as to Compliance.

Section 3A.10. Annual Independent Accountant’s Servicing Report.

Section 3A.11. Obligation of the Master Servicer in Respect of Prepayment Interest

Shortfalls.

Section 3A.12. Monthly Advances by the Master Servicer.

Section 3A.13. Merger or Consolidation.

Section 3A.14. Reports Filed with Securities and Exchange Commission..

ARTICLE IV ACCOUNTS

Section 4.01

Collection of Mortgage Loan Payments; Custodial Account.

Section 4.02

Permitted Withdrawals From the Custodial Account.

Section 4.03

Reports by Servicer.

Section 4.04

Collection of Taxes; Assessments and Similar Items; Escrow Accounts.

Section 4.05

Reserved.

Section 4.06

Distribution Account.

Section 4.07

Permitted Withdrawals and Transfers from the Distribution Account.

Section 4.08

Duties of the Credit Risk Manager; Termination.

Section 4.09

Limitation Upon Liability of the Credit Risk Manager.

ARTICLE V ADVANCES AND DISTRIBUTIONS

Section 5.01

Advances; Advance Facility.

Section 5.02

Compensating Interest Payments.

101

Section 5.03

REMIC Distributions.

102

Section 5.04

Class P Certificate Account.

102

Section 5.05

Reserved.

102

Section 5.06

Distributions on the Certificates.

102

Section 5.07

Allocation of Realized Losses .

107

Section 5.08

Interest Rate Cap Account.

108

Section 5.09

Monthly Statements to Certificateholders.

109

Section 5.10

Basis Risk Reserve Fund.

112

ARTICLE VI THE CERTIFICATES

115

Section 6.01

The Certificates.

115

Section 6.02

Certificate Register; Registration of Transfer and Exchange of

Certificates.

115

Section 6.03

Mutilated, Destroyed, Lost or Stolen Certificates.

119

Section 6.04

Persons Deemed Owners.

119

Section 6.05

Access to List of Certificateholders’ Names and Addresses.

120

Section 6.06

Book-Entry Certificates.

120

Section 6.07

Notices to Depository.

121

Section 6.08

Definitive Certificates.

121

Section 6.09

Maintenance of Office or Agency.

122

ARTICLE VII THE DEPOSITOR, THE MASTER SERVICER AND THE SERVICER

123

Section 7.01

Liabilities of the Depositor, the Master Servicer and the Servicer.

123

Section 7.02

Merger or Consolidation of the Depositor, the Master Servicer or the Servicer.

123

Section 7.03

Indemnification of the Depositor, the Master Servicer and the Servicer.

123

Section 7.04

Limitations on Liability of the Depositor, the Master Servicer,

the Servicer and Others.

124

Section 7.05

Servicer Not to Resign.

125

Section 7.06

Termination of Servicer Without Cause; Appointment of

Special Servicer.

126

Section 7.07

Limitation on Resignation of the Master Servicer.

127

Section 7.08

Assignment of Master Servicing.

127

Section 7.09

Rights of the Depositor in Respect of the Servicer and the

Master Servicer.

127

ARTICLE VIII DEFAULT; TERMINATION OF SERVICER AND MASTER SERVICER

129

Section 8.01

Servicer Default.

129

Section 8.02

Master Servicer to Act; Appointment of Successor.

130

Section 8.03

Master Servicer Default.

132

Section 8.04

Trustee to Act; Appointment of Successor.

134

Section 8.05

Notification to Certificateholders.

136

Section 8.06

Waiver of Servicer Defaults and Master Servicer Defaults.

136

ARTICLE IX CONCERNING THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE CUSTODIANS

137

Section 9.01

Duties of Trustee and Securities Administrator.

137

Section 9.02

Certain Matters Affecting the Trustee and Securities Administrator.

139

Section 9.03

Trustee and Securities Administrator Not Liable for Certificates or

Mortgage Loans.

141

Section 9.04

Trustee and Securities Administrator May Own Certificates.

142

Section 9.05

Trustee’s and Securities Administrator’s Compensation and Expenses;

Indemnification.

142

Section 9.06

Eligibility Requirements for Trustee and Securities Administrator.

143

Section 9.07

Insurance.

143

Section 9.08

Resignation and Removal of Trustee or Securities Administrator.

144

Section 9.09

Successor Trustee and Successor Securities Administrator.

145

Section 9.10

Merger or Consolidation of Trustee or Securities Administrator.

145

Section 9.11

Appointment of Co-Trustee or Separate Trustee or of Co-Securities

Administrator or Separate Securities Administrator.

145

Section 9.12

Tax Matters.

147

Section 9.13

Custodian’s Fees and Expenses.

149

Section 9.14

Indemnification of Custodian.

150

Section 9.15

Reliance of Custodian.

150

ARTICLE X TERMINATION

152

Section 10.01

Termination upon Liquidation or Repurchase of all Mortgage Loans.

152

Section 10.02

Final Distribution on the Certificates.

152

Section 10.03

Additional Termination Requirements.

154

ARTICLE XI MISCELLANEOUS PROVISIONS

155

Section 11.01

Amendment.

155

Section 11.02

Recordation of Agreement; Counterparts.

156

Section 11.03

GOVERNING LAW .

157

Section 11.04

Intention of Parties.

157

Section 11.05

Notices.

157

Section 11.06

Severability of Provisions.

159

Section 11.07

Assignment.

159

Section 11.08

Limitation on Rights of Certificateholders.

159

Section 11.09

Certificates Nonassessable and Fully Paid.

160

Exhibits

Exhibit A-1

Form of Class A-[1][2][3] Certificates

Exhibit A-2

Form of Class M-[1][2] and Class B-[1][2][3] Certificates

Exhibit A-3

Form of Class X-[1][2] Certificates

Exhibit A-4

Form of Class P Certificates

Exhibit A-5

Form of Class R Certificates

Exhibit A-6

Form of Class A-IO Certificates

Exhibit A-7

Form of Class B-4-IO Certificates

Exhibit A-8

Form of Class B-4-PO Certificates

Exhibit B

Mortgage Loan Schedule

Exhibit C-1

Form of Initial Certification

Exhibit C-2

Form of Interim Certification

Exhibit C-3

Form of Final Certification

Exhibit D

Form of Transfer Affidavit

Exhibit E

Form of Transferor Certificate

Exhibit F

Form of Investment Letter (Non-Rule 144A)

Exhibit G

Form of Rule 144A Investment Letter

Exhibit H

Form of Request for Release

Exhibit I

DTC Letter of Representations

Exhibit J

Schedule of Mortgage Loans with Lost Notes

Exhibit K

Prepayment Charge Schedule

Exhibit L

Appendix E of the Standard & Poor’s Glossary For File

Format For LEVELS® Version 5.6 Revised

Exhibit M

Forms of Interest Rate Cap Agreements

Exhibit N

Charged Off Loan Data Report

Exhibit O

Form of Servicer Certification

Exhibit P-1

Calculation of Realized Loss/Gain Form 332

Exhibit P-2

Form of Standard File Layout – Delinquency Reporting

POOLING AND SERVICING AGREEMENT, dated as of September 1, 2005, among NOMURA ASSET ACCEPTANCE CORPORATION, a Delaware corporation, as depositor (the “Depositor”), NOMURA CREDIT & CAPITAL, INC., a Delaware corporation, as seller (in such capacity, the “Seller”), GMAC MORTGAGE CORPORATION, a Pennsylvania corporation, as servicer (the “Servicer”), HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity, but solely as trustee (the “Trustee”) and WELLS FARGO BANK, N.A., a national banking association, as master servicer (the “Master Servicer”), as securities administrator (the “Securities Administrator”) and as a custodian (a “Custodian”).

PRELIMINARY STATEMENT

The Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee in return for the Certificates.

As provided herein, the Trustee, shall elect that the Trust Fund (exclusive of the assets held in the Basis Risk Reserve Fund and the Interest Rate Cap Account) be treated for federal income tax purposes as comprising four real estate mortgage investment conduits (each a “REMIC” or, in the alternative, the “Subsidiary REMIC,” “Intermediate REMIC 1,” “Intermediate REMIC 2” and the “Master REMIC”). For purposes of the REMIC Provisions, each Certificate other than the Class X-2 Certificate and Class R Certificate represents ownership of a regular interest in the Master REMIC. In addition, the LIBOR and Fixed Rate Certificates (other than the Class A-IO Certificates) represent the right to receive payments pursuant to contractual arrangements as described in Section 5.10(e) of this Agreement. The Class R Certificate represents ownership of the sole class of residual interest in each of the Subsidiary REMIC, Intermediate REMIC 1, Intermediate REMIC 2 and the Master REMIC for purposes of the REMIC Provisions.

The Master REMIC shall hold as its assets the several classes of uncertificated Lower Tier Interests in Intermediate REMIC 2, other than the Class LT3-R Interest, and each such Lower Tier Interest is hereby designated as a regular interest in Intermediate REMIC 2 for purposes of the REMIC Provisions. Intermediate REMIC 2 shall hold as its assets the several clases of uncertificated Lower Tier Interests in Intermediate REMIC 1, other than the Class LT2-R Interest, and each such Lower Tier Interest is hereby designated as a regular interest in Intermediate REMIC 1. Intermediate REMIC 1 shall hold as its assets the several classes of uncertificated Lower Tier Interests in the Subsidiary REMIC, other than the Class LT1-R Interest, and each such Lower Tier Interest is hereby designated as a regular interest in the Subsidiary REMIC. The Subsidiary REMIC shall hold as its assets the property of the Trust Fund other than (i) the Lower Tier Interests in the Subsidiary REMIC and the Intermediate REMIC, (ii) the Interest Rate Cap Account and (iii) the Basis Risk Reserve Fund. The startup day for each REMIC created hereby for purposes of the REMIC Provisions is the Closing Date. In addition, for purposes of the REMIC Provisions, the latest possible maturity date for each regular interest in each REMIC created hereby is the 36th month following the month of the scheduled maturity of the Mortgage Loan held in the Trust Fund as of the Closing Date having the latest maturity date.

The Subsidiary REMIC

Subsidiary REMIC Lower Tier Class Designation	Subsidiary REMIC Lower Tier Interest Rate	Initial Class Principal Balance
Class LT1-Pool-PO	(1)	(2)
Class LT1-Pool-P&I	13.335% (3)	(4)
Class LT1-A-IO-1	13.335% (3)	$1,123,359.58
Class LT1-A-IO-2	13.335% (3)	$1,124,859.39
Class LT1-A-IO-3	13.335% (3)	$1,123,359.58
Class LT1-A-IO-4	13.335% (3)	$1,123,359.58
Class LT1-A-IO-5	13.335% (3)	$1,124,859.39
Class LT1-A-IO-6	13.335% (3)	$1,123,359.58
Class LT1-A-IO-7	13.335% (3)	$1,123,359.58
Class LT1-A-IO-8	13.335% (3)	$1,124,859.39
Class LT1-A-IO-9	13.335% (3)	$1,123,359.58
Class LT1-A-IO-10	13.335% (3)	$1,123,359.58
Class LT1-A-IO-11	13.335% (3)	$1,124,859.39
Class LT1-A-IO-12	13.335% (3)	$1,123,359.58
Class LT1-A-IO-13	13.335% (3)	$1,123,359.58
Class LT1-A-IO-14	13.335% (3)	$1,124,859.39
Class LT1-A-IO-15	13.335% (3)	$1,123,359.58
Class LT1-A-IO-16	13.335% (3)	$1,124,859.39
Class LT1-A-IO-17	13.335% (3)	$1,123,359.58
Class LT1-A-IO-18	13.335% (3)	$1,123,359.58
Class LT1-A-IO-19	13.335% (3)	$1,124,859.39
Class LT1-A-IO-20	13.335% (3)	$1,123,359.58
Class LT1-A-IO-21	13.335% (3)	$1,123,359.58
Class LT1-A-IO-22	13.335% (3)	$1,124,859.39
Class LT1-A-IO-23	13.335% (3)	$1,123,359.58
Class LT1-A-IO-24	13.335% (3)	$1,123,359.58
Class LT1-A-IO-25	13.335% (3)	$1,124,859.39
Class LT1-A-IO-26	13.335% (3)	$1,123,359.58
Class LT1-A-IO-27	13.335% (3)	$1,123,359.58
Class LT1-A-IO-28	13.335% (3)	$1,124,859.39
Class LT1-A-IO-29	13.335% (3)	$1,123,359.58
Class LT1-A-IO-30	13.335% (3)	$1,123,359.58
Class LT1-P	0.00%	$100.00
Class LT1-R	(5)	(5)

___________________________

(1)

The interest rate for the Class LT1-Pool-PO Interest for each Distribution Date before the Distribution Date in April 2008 (and the related Accrual Period), is a per annum rate of 0%; and for each Distribution Date thereafter is a per annum rate equal to the Net WAC Rate for the related Due Period.

(2)

This interest will have an initial principal balance equal to (i) the aggregate of the Stated Principal Balances of the Mortgage Loans as of the Cut-off Date minus (ii) the sum of the initial principal balances of the remaining Lower Tier Interests in the Subsidiary REMIC.

(3)

For each Distribution Date on and after the Distribution Date in April 2008 (and the related Accrual Period), this Lower Tier Interest shall bear interest at a per annum rate equal to the Net WAC Rate for the related Due Period.

(4)

This interest will have an initial principal balance equal to the excess of (a) the sum of the following amount for each Mortgage Loan: (i) the Stated Principal Balance of such Mortgage Loan multiplied by (ii) a fraction, the numerator of which is the Net Mortgage Rate of such Mortgage Loan and the denominator of which is 13.335% over (b) the sum of the initial principal balances of the Lower Tier Interests containing the letters “A-IO” in their class designations.

(5)

The Class LT1-R Interest is the sole class of residual interest in the Subsidiary REMIC. It does not have an interest rate or a principal balance.

On each Distribution Date, the Securities Administrator shall first pay or charge as an expense of the Subsidiary REMIC all expenses of the Trust allocable to the Subsidiary REMIC for such Distribution Date.

On each Distribution Date, the Securities Administrator shall distribute the Interest Remittance Amount with respect to each of the Lower Tier Interests in the Subsidiary REMIC based on the above-described interest rates.

On each Distribution Date the Principal Remittance Amount shall be distributed (and Realized Losses shall be allocated) among the Lower Tier Interests in the Subsidiary REMIC in the following order of priority:

With respect to the PO Portion of such amounts, to the Class LT1-Pool-PO until the principal balance of such Interest is reduced to zero; and

With respect to the P&I Portion of such amounts, to the Class LT1-Pool Interest until the principal balance of such Interest is reduced to zero, and then to the Subsidiary REMIC Lower Tier Interests having the letters “A-IO” in their Class designation in ascending order of their numerical designation until the principal balance or each such Subsidiary REMIC Lower Tier Interest is reduced to zero.

For this purpose, the “P&I Portion” of any Mortgage Loan shall equal the following portion for any Mortgage Loan: (i) the Stated Principal Balance of such Mortgage Loan multiplied by (ii) a fraction, the numerator of which is the Net Mortgage Rate of such Mortgage Loan and the denominator of which is 13.335%. The “PO Portion” of any Mortgage Loan shall equal the Stated Principal Balance of such Mortgage Loan minus the P&I Portion of such Mortgage Loan.

On each Distribution Date, amounts distributable on the Class P Certificates shall be distributed on the Class LT1-P Interest.

Intermediate REMIC 1

The following table sets forth (or describes) the class designation, interest rate, and initial principal amount for each class of Lower Tier Interests in Intermediate REMIC 1:

Intermediate REMIC Class Designation	Intermediate REMIC Interest Rate	Initial Principal Balance	Corresponding Class of Certificates
Class LT2-A1	(1)	(33)	A-1
Class LT2-A2	(1)	(33)	A-2
Class LT2-A3	(1)	(33)	A-3
Class LT2-M1	(1)	(33)	M-1
Class LT2-M2	(1)	(33)	M-2
Class LT2-B1	(1)	(33)	B-1
Class LT2-B2	(1)	(33)	B-2
Class LT2-B3	(1)	(33)	B-3
Class LT2-B4	(1)	(33)	B-4-IO, B-4-PO
Class LT2-Q	(1)	(34)	X
Class LT2-A-IO-1	(2)	(2)	A-IO
Class LT2-A-IO-2	(3)	(3)	A-IO
Class LT2-A-IO-3	(4)	(4)	A-IO
Class LT2-A-IO-4	(5)	(5)	A-IO
Class LT2-A-IO-5	(6)	(6)	A-IO
Class LT2-A-IO-6	(7)	(7)	A-IO
Class LT2-A-IO-7	(8)	(8)	A-IO
Class LT2-A-IO-8	(9)	(9)	A-IO
Class LT2-A-IO-9	(10)	(10)	A-IO
Class LT2-A-IO-10	(11)	(11)	A-IO
Class LT2-A-IO-11	(12)	(12)	A-IO
Class LT2-A-IO-12	(13)	(13)	A-IO
Class LT2-A-IO-13	(14)	(14)	A-IO
Class LT2-A-IO-14	(15)	(15)	A-IO
Class LT2-A-IO-15	(16)	(16)	A-IO
Class LT2-A-IO-16	(17)	(17)	A-IO
Class LT2-A-IO-17	(18)	(18)	A-IO
Class LT2-A-IO-18	(19)	(19)	A-IO
Class LT2-A-IO-19	(20)	(20)	A-IO
Class LT2-A-IO-20	(21)	(21)	A-IO
Class LT2-A-IO-21	(22)	(22)	A-IO
Class LT2-A-IO-22	(23)	(23)	A-IO
Class LT2-A-IO-23	(24)	(24)	A-IO
Class LT2-A-IO-24	(25)	(25)	A-IO
Class LT2-A-IO-25	(26)	(26)	A-IO
Class LT2-A-IO-26	(27)	(27)	A-IO
Class LT2-A-IO-27	(28)	(28)	A-IO
Class LT2-A-IO-28	(29)	(29)	A-IO
Class LT2-A-IO-29	(30)	(30)	A-IO
Class LT2-A-IO-30	(31)	(31)	A-IO
Class LT2-P	0.00%	$100.00	P
Class LT2-R	(32)	(32)	R

___________________________

(1)

The interest rate for this Lower Tier Interest for each Distribution Date (and the related Accrual Period) is a per annum rate equal to the weighted average of the interest rates of the regular interests in the Subsidiary REMIC for such Distribution Date, weighted on the principal balances of such Subsidiary REMIC Lower Tier Interests and determined by reducing the interest rate of each Subsidiary REMIC Lower Tier Interest to zero for each Distribution Date on which interest accruing on such Lower Tier Interest is payable to a Lower Tier Interest in Intermediate REMIC 1 having the letters “A-IO” in its class designation.

(2)

The Class LT2-A-IO-1 Interest is an interest-only Class and does not have a principal balance. For the first Distribution Date the Class LT2-A-IO-1 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-1 Interest and shall not be entitled to any payments after the first Distribution Date.

(3)

The Class LT2-A-IO-2 Interest is an interest-only Class and does not have a principal balance. For each of the first two Distribution Dates the Class LT2-A-IO-2 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-2 Interest and shall not be entitled to any payments after the first two Distribution Dates.

(4)

The Class LT2-A-IO-3 Interest is an interest-only Class and does not have a principal balance. For each of the first three Distribution Dates the Class LT2-A-IO-3 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-3 Interest and shall not be entitled to any payments after the first three Distribution Dates.

(5)

The Class LT2-A-IO-4 Interest is an interest-only Class and does not have a principal balance. For each of the first four Distribution Dates the Class LT2-A-IO-4 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-4 Interest and shall not be entitled to any payments after the first four Distribution Dates.

(6)

The Class LT2-A-IO-5 Interest is an interest-only Class and does not have a principal balance. For each of the first five Distribution Dates the Class LT2-A-IO-5 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-5 Interest and shall not be entitled to any payments after the first five Distribution Dates.

(7)

The Class LT2-A-IO-6 Interest is an interest-only Class and does not have a principal balance. For each of the first six Distribution Dates the Class LT2-A-IO-6 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-6 Interest and shall not be entitled to any payments after the first six Distribution Dates.

(8)

The Class LT2-A-IO-7 Interest is an interest-only Class and does not have a principal balance. For each of the first seven Distribution Dates the Class LT2-A-IO-7 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-7 Interest and shall not be entitled to any payments after the first seven Distribution Dates.

(9)

The Class LT2-A-IO-8 Interest is an interest-only Class and does not have a principal balance. For each of the first eight Distribution Dates the Class LT2-A-IO-8 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-8 Interest and shall not be entitled to any payments after the first eight Distribution Dates.

(10)

The Class LT2-A-IO-9 Interest is an interest-only Class and does not have a principal balance. For each of the first nine Distribution Dates the Class LT2-A-IO-9 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-9 Interest and shall not be entitled to any payments after the first nine Distribution Dates.

(11)

The Class LT2-A-IO-10 Interest is an interest-only Class and does not have a principal balance. For each of the first 10 Distribution Dates the Class LT2-A-IO-10 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-10 Interest and shall not be entitled to any payments after the first 10 Distribution Dates.

(12)

The Class LT2-A-IO-11 Interest is an interest-only Class and does not have a principal balance. For each of the first 11 Distribution Dates the Class LT2-A-IO-11 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-11 Interest and shall not be entitled to any payments after the first 11 Distribution Dates.

(13)

The Class LT2-A-IO-12 Interest is an interest-only Class and does not have a principal balance. For each of the first 12 Distribution Dates the Class LT2-A-IO-12 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-12 Interest and shall not be entitled to any payments after the first 12 Distribution Dates.

(14)

The Class LT2-A-IO-13 Interest is an interest-only Class and does not have a principal balance. For each of the first 13 Distribution Dates the Class LT2-A-IO-13 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-13 Interest and shall not be entitled to any payments after the first 13 Distribution Dates.

(15)

The Class LT2-A-IO-14 Interest is an interest-only Class and does not have a principal balance. For each of the first 14 Distribution Dates the Class LT2-A-IO-14 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-14 Interest and shall not be entitled to any payments after the first 14 Distribution Dates.

(16)

The Class LT2-A-IO-15 Interest is an interest-only Class and does not have a principal balance. For each of the first 15 Distribution Dates the Class LT2-A-IO-15 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-15 Interest and shall not be entitled to any payments after the first 15 Distribution Dates.

(17)

The Class LT2-A-IO-16 Interest is an interest-only Class and does not have a principal balance. For each of the first 16 Distribution Dates the Class LT2-A-IO-16 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-16 Interest and shall not be entitled to any payments after the first 16 Distribution Dates.

(18)

The Class LT2-A-IO-17 Interest is an interest-only Class and does not have a principal balance. For each of the first 17 Distribution Dates the Class LT2-A-IO-17 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-17 Interest and shall not be entitled to any payments after the first 17 Distribution Dates.

(19)

The Class LT2-A-IO-18 Interest is an interest-only Class and does not have a principal balance. For each of the first 18 Distribution Dates the Class LT2-A-IO-18 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-18 Interest and shall not be entitled to any payments after the first 18 Distribution Dates.

(20)

The Class LT2-A-IO-19 Interest is an interest-only Class and does not have a principal balance. For each of the first 19 Distribution Dates the Class LT2-A-IO-19 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-19 Interest and shall not be entitled to any payments after the first 19 Distribution Dates.

(21)

The Class LT2-A-IO-20 Interest is an interest-only Class and does not have a principal balance. For each of the first 20 Distribution Dates the Class LT2-A-IO-20 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-20 Interest and shall not be entitled to any payments after the first 20 Distribution Dates.

(22)

The Class LT2-A-IO-21 Interest is an interest-only Class and does not have a principal balance. For each of the first 21 Distribution Dates the Class LT2-A-IO-21 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-21 Interest and shall not be entitled to any payments after the first 21 Distribution Dates.

(23)

The Class LT2-A-IO-22 Interest is an interest-only Class and does not have a principal balance. For each of the first 22 Distribution Dates the Class LT2-A-IO-22 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-22 Interest and shall not be entitled to any payments after the first 22 Distribution Dates.

(24)

The Class LT2-A-IO-23 Interest is an interest-only Class and does not have a principal balance. For each of the first 23 Distribution Dates the Class LT2-A-IO-23 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-23 Interest and shall not be entitled to any payments after the first 23 Distribution Dates.

(25)

The Class LT2-A-IO-24 Interest is an interest-only Class and does not have a principal balance. For each of the first 24 Distribution Dates the Class LT2-A-IO-24 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-24 Interest and shall not be entitled to any payments after the first 24 Distribution Dates.

(26)

The Class LT2-A-IO-25 Interest is an interest-only Class and does not have a principal balance. For each of the first 25 Distribution Dates the Class LT2-A-IO-25 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-25 Interest and shall not be entitled to any payments after the first 25 Distribution Dates.

(27)

The Class LT2-A-IO-26 Interest is an interest-only Class and does not have a principal balance. For each of the first 26 Distribution Dates the Class LT2-A-IO-26 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-26 Interest and shall not be entitled to any payments after the first 26 Distribution Dates.

(28)

The Class LT2-A-IO-27 Interest is an interest-only Class and does not have a principal balance. For each of the first 27 Distribution Dates the Class LT2-A-IO-27 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-27 Interest and shall not be entitled to any payments after the first 27 Distribution Dates.

(29)

The Class LT2-A-IO-28 Interest is an interest-only Class and does not have a principal balance. For each of the first 28 Distribution Dates the Class LT2-A-IO-28 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-28 Interest and shall not be entitled to any payments after the first 28 Distribution Dates.

(30)

The Class LT2-A-IO-29 Interest is an interest-only Class and does not have a principal balance. For each of the first 29 Distribution Dates the Class LT2-A-IO-29 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-29 Interest and shall not be entitled to any payments after the first 29 Distribution Dates.

(31)

The Class LT2-A-IO-30 Interest is an interest-only Class and does not have a principal balance. For each of the first 30 Distribution Dates the Class LT2-A-IO-30 Interest shall be entitled to 100% of the interest payable on the Class LT1-A-IO-30 Interest and shall not be entitled to any payments after the first 30 Distribution Dates.

(32)

The Class LT2-R Interest is the sole class of residual interest in Intermediate REMIC 1. It does not have an interest rate or a principal balance.

(33)

This interest shall have an initial principal balance equal to one-half of the initial principal balance of the Corresponding Class of Certificates for this interest.

(34)

This interest shall have an initial principal balance equal to the excess of the aggregate principal balance of the Mortgage Loans as of the Cut-off Date over the aggregate initial principal balance of all other interests in the Subsidiary REMIC other than the Class LT1-P interest.

On each Distribution Date the Securities Administrator shall distribute, from funds then on deposit in the Distribution Account, the Interest Remittance Amount with respect to each of the Lower Tier Interests in Intermediate REMIC 1 based on the above-described interest rates, provided however, that interest that accrues on the Class LT2-Q Interest shall be deferred in an amount equal to one-half of the increase, if any, in the Overcollateralization Amount for such Distribution Date. Any interest so deferred shall itself bear interest at the interest rate for the Class LT2-Q Interest. An amount equal to the interest so deferred shall be distributed as additional principal on the other Lower Tier Interests in Intermediate REMIC 1 having a principal balance in the manner described below.

On each Distribution Date the Principal Remittance Amount (together with an amount equal to the interest deferred on the Class LT2-Q Interest for such Distribution Date) shall be distributed, and Realized Losses shall be allocated, among the Lower Tier Interests in Intermediate REMIC 1 in the following order of priority:

(i)

First, concurrently, (a) to the Class LT2-A1 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class A-1 Certificates immediately after such Distribution Date, (b) to the Class LT2-A2 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class A-2 Certificates immediately after such Distribution Date and (c) to the Class LT2-A3 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class A-3 Certificates immediately after such Distribution Date;

(ii)

Second, to the Class LT2-M1 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class M-1 Certificates immediately after such Distribution Date;

(iii)

Third, to the Class LT2-M2 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class M-2 Interest immediately after such Distribution Date;

(iv)

Fourth, to the Class LT2-B1 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class B-1 Interest immediately after such Distribution Date;

(v)

Fifth, to the Class LT2-B2 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class B-2 Certificates immediately after such Distribution Date;

(vi)

Sixth, to the Class LT2-B3 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class B-3 Certificates immediately after such Distribution Date;

(vii)

Seventh, to the Class LT2-B4 Interest until the principal balance of such Lower Tier Interest equals one-half of the Certificate Principal Balance of the Class B-3 Certificates immediately after such Distribution Date; and

(viii)

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

On each Distribution Date, amounts distributable on the Class P Certificates shall be distributed on the Class LT2-P Interest.

Intermediate REMIC 2

The following table sets forth (or describes) the class designation, interest rate, and initial principal amount for each class of Lower Tier Interests in Intermediate REMIC 2:

Intermediate REMIC Class Designation	Intermediate REMIC Interest Rate	Initial Principal Balance	Corresponding Class of Certificates
Class LT3-A1	(1)	(2)	A-1
Class LT3-A2	(1)	(2)	A-2
Class LT3-A3	(1)	(2)	A-3
Class LT3-M1	(1)	(2)	M-1
Class LT3-M2	(1)	(2)	M-2
Class LT3-B1	(1)	(2)	B-1
Class LT3-B2	(1)	(2)	B-2
Class LT3-B3	(1)	(2)	B-3
Class LT3-B4	(3)	(2)	B-4-PO, B-4-IO
Class LT3-A-IO	(4)	(4)	A-IO
Class LT3-Q	(5)	(5)	X
Class LT3-R	(6)	(6)	R
Class LT3-P	0.00%	$100.00	P

___________________________

(1)

The interest rate for this Lower Tier Interest for each Distribution Date (and the related Accrual Period) is a per annum rate equal to interest rate of its Corresponding Class of Certificates.

(2)

This interest shall have an initial principal balance equal to the initial principal balance of the Corresponding Class of Certificates for this interest.

(3)

The interest rate for this Lower Tier Interest for each Distribution Date (and the related Accrual Period) is a per annum rate equal to interest rate of the Class B-4-IO Certificates.

(4)

This interest shall be an interest-only regular interest and shall be entitled to receive on any Distribution Date the amount distributable on such Distribution Date on the Class A-IO Certificates.

(5)

The Class LT3-Q Interest shall have an initial principal balance equal to the excess of (i) the aggregate Cut-off Date Principal Balance of the Mortgage Loans over (ii) the principal balance (as of the Closing Date) of each other regular interest in Intermediate REMIC 2, which right represents a Regular Interest in Intermediate REMIC 2. The Class LT3-Q Interest shall not accrue any interest on its principal balance. The Class LT3-Q Interest also comprises a notional component, which is also a Regular Interest in Intermediate REMIC 2. The notional component has a notional principal balance that at all times will equal the aggregate of the principal balances of the Regular Interests in Intermediate REMIC 1 ( i.e. , the Aggregate Loan Balance). For each Distribution Date (and the related Accrual Period thereafter), the notional component shall bear interest at a rate equal to the excess of (a) the weighted average of the interest rates of the Regular Interests in Intermediate REMIC 1 (other than the Regular Interests that are interest-only Classes), weighted on the basis of the principal balance of each such Lower Tier Interest (the “REMIC Maximum Rate”) over (b) the Adjusted WAC. For any Distribution Date, interest that accrues on the notional component of the Class LT3-Q Interest shall be deferred to the extent of any increase in the Overcollateralization Amount on such date. Such deferred interest shall not itself bear interest.

(6)

The Class LT3-R Interest is the sole class of residual interest in Intermediate REMIC 2. It does not have an interest rate or a principal balance.

On each Distribution Date the Principal Remittance Amount shall be distributed, and Realized Losses shall be allocated, among the Lower Tier Interests in Intermediate REMIC 2 until the principal balance of each such Lower Tier Interest equals the Certificate Principal Balance of its Corresponding Class of Certificates immediately after such Distribution Date.

On each Distribution Date, amounts distributable on the Class P Certificates shall be distributed on the Class LT3-P Interest.

The Master REMIC

The following table sets forth (or describes) the Class designation, Pass-Through Rate, Initial Certificate Principal Balance, and minimum Denomination for each Class of Certificates representing interests in the Master REMIC:

Class Designation	Initial Certificate Principal Balance or Class Notional Amount	Pass-Through Rate	Minimum Denominations or Percentage Interest	Integral Multiples in Excess of Minimum
Class A-1	$91,030,000	(1) (7)	$25,000	$1
Class A-2	$20,830,000	(1) (7)	$25,000	$1
Class A-3	$50,000,000	(1) (7)	$25,000	$1
Class A-IO	Notional (2)	(1)	$25,000	$1
Class M-1	$24,728,000	(1) (7)	$25,000	$1
Class M-2	$14,613,000	(1) (7)	$25,000	$1
Class B-1	$6,000,000	(1) (7)	$25,000	$1
Class B-2	$4,116,000	(1) (7)	$25,000	$1
Class B-3	$2,473,000	(1) (7)	$25,000	$1
Class B-4-IO	Notional (8)	(1) (7)	$25,000	$1
Class B-4-PO	$4,608,000	N/A	$25,000	$1
Class P	$100	N/A (3)	10%	1%
Class X-1	Notional (4)	(4)	10%	1%
Class X-2	N/A (5)	N/A (5)	10%	1%
Class R	N/A (6)	N/A (6)	10%	1%

__________________

(1)

The Pass-Through Rate for each Distribution Date is set forth in the definition of Pass-Through Rate.

(2)

The Class A-IO Certificates shall bear interest on the Class A-IO Notional Amount.

(3)

The Class P Certificates shall not bear interest but shall be entitled to receive all Prepayment Premiums payable on the Mortgage Loans.

(4)

The Class X-1 Certificates shall represent a beneficial ownership of an uncertificated interest in the Master REMIC (the “Class X-1 Interest”). On each Distribution Date the Class X-1 Interest shall be entitled to receive all amounts distributable on the Class LT3-Q Interest on such Distribution Date. On each Distribution Date, the Class X-1 Certificate shall be entitled to receive the Class X-1 Distributable Amount pursuant to Section 5.06(d)(ix).

(5)

The Class X-2 Certificates shall not represent an interest in any REMIC formed hereby. For purspoes of compliance with the REMIC Provisions, any Charged Off Loan shall be treated as having been distributed on the Class X-1 Interest and transferred by the beneficial owners of the Class X-1 Certificates to the beneficial owners of the Class X-2 Certificates.

(6)

The Class R Certificate represents ownership of the residual interest in the Master REMIC, as well as ownership of the Class LT2-R and Class LT1-R Interests.

(7)

For federal income tax purposes, the REMIC regular interest corresponding to this Certificate shall bear interest at a maximum rate equal to the REMIC Maximum Rate. Any amount payable on this Certificate in excess of the REMIC Maximum Rate shall be treated as having been paid pursuant to the contract described in Section 5.10(e) hereof.

(8)

The Class B-4-IO Certificates shall bear interest on the Class B-4-IO Notional Amount.

ARTICLE I

DEFINITIONS

Section 1.01

Defined Terms

In addition to those terms defined in Section 1.02, whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

Accepted Master Servicing Practices : With respect to any Mortgage Loan, as applicable, either (x) those master servicing practices of prudent mortgage lending institutions which master service mortgage loans of the same type and quality as such Mortgage Loans in the jurisdiction where the related Mortgaged Property is located to the extent applicable to the Master Servicer, or (y) as provided in Section 3A.01 hereof, but in no event below the standard set forth in clause (x).

Accepted Servicing Practices : With respect to any Mortgage Loan, as applicable, either (x) those servicing practices of prudent mortgage lending institutions which service mortgage loans of the same type and quality as such Mortgage Loans in the jurisdiction where the related Mortgaged Property is located to the extent applicable to the Servicer, or (y) as provided in Section 3.01 hereof, but in no event below the standard set forth in clause (x).

Account : Either the Distribution Account or the Custodial Account.

Accrual Period : For any Class of LIBOR Certificates and any Distribution Date, the period commencing on the immediately preceding Distribution Date (or, in the case of the first Accrual Period, the Closing Date) and ending on the day immediately preceding the related Distribution Date. For the Fixed Rate Certificates and any Distribution Date, the calendar month immediately preceding the related Distribution Date. Interest on the LIBOR Certificates will be calculated on the basis of the actual number of days in the related Accrual Period and a 360 day year. Interest on the Fixed Rate Certificates will be calculated on the basis of a 360 day year consisting of twelve 30 day months.

Adjusted WAC : For any Accrual Period, the product of (i) two, and (ii) the weighted average of the interest rates of the regular interests in Intermediate REMIC 1 (other than any interest-only regular interest and the Class LT2-P Interest), determined by (a) subjecting the rate on the Class LT2-Q Interest to a cap of zero and (b) subjecting the rate on the Class LT2-A1, Class LT2-A2, Class LT2-A3, Class LT2-M1, Class LT2-M2, Class LT2-B1, Class LT2-B2, Class LT2-B3 and Class LT2-B4 Interests to a cap equal to the Pass-Through Rate on the corresponding Class of Certificates for such Accrual Period (as indicated in the Preliminary Statement).

Advance : An advance of delinquent payments of principal or interest in respect of a Mortgage Loan required to be made by the Servicer, or the Master Servicer in its capacity as Successor Servicer, or by the Trustee in its capacity as Successor Master Servicer, in each case pursuant to Section 5.01.

Advance Facility : As defined in Section 5.01(b)(i).

Advance Facility Notice : As defined in Section 5.01(b)(ii).

Advance Financing Person : As defined in Section 5.01(b)(i).

Advance Reimbursement Amount : As defined in Section 5.01(b)(ii).

Aggregate Loan Balance : As of any date of determination, will be equal to the aggregate of the Stated Principal Balances of the Mortgage Loans, except as otherwise provided herein, as of the last day of the related Due Period.

Agreement : This Pooling and Servicing Agreement and any and all amendments or supplements hereto made in accordance with the terms herein.

Amount Held for Future Distribution : As to any Distribution Date, the aggregate amount held in the Custodial Account at the close of business on the immediately preceding Determination Date on account of (i) all Scheduled Payments or portions thereof received in respect of the Mortgage Loans due after the related Due Period and (ii) Principal Prepayments and Liquidation Proceeds received in respect of the Mortgage Loans after the last day of the related Prepayment Period.

Applied Loss Amount : As to any Distribution Date, an amount equal to the excess, if any of (i) the aggregate Certificate Principal Balance of the Certificates, after giving effect to all Realized Losses incurred with respect to Mortgage Loans during the Due Period for such Distribution Date and payments of principal on such Distribution Date over (ii) the Aggregate Loan Balance for such Distribution Date.

Appraised Value : With respect to any Mortgage Loan originated in connection with a refinancing, the appraised value of the Mortgaged Property based upon the appraisal made at the time of such refinancing or, with respect to any other Mortgage Loan, the lesser of (x) the appraised value of the Mortgaged Property based upon the appraisal made by a fee appraiser at the time of the origination of the Mortgage Loan, and (y) the sales price of the Mortgaged Property at the time of such origination.

Authorized Servicer Representative : Those Servicer representatives, authorized to execute a Request for Release on behalf of the Servicer, whose name and facsimile signature appear on a list furnished to the Trustee, the Securities Administrator and the Master Servicer by the Servicer on the Closing Date pursuant to this Agreement, as such list may be amended by the Servicer from time-to-time.

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

Bankruptcy Code : Title 11 of the United States Code.

Basis Risk Reserve Fund : The segregated non-interest bearing trust account created and maintained by the Securities Administrator pursuant to Section 5.10 hereof.

Basis Risk Shortfall: With respect to any Class of LIBOR or Class B-4-IO Certificates and any Distribution Date, the sum of (i) the excess, if any, of the related Current Interest calculated without regard to the applicable Net Funds Cap over the related Current Interest for the applicable Distribution Date; (ii) any amount described in clause (i) remaining unpaid from prior Distribution Dates; and (iii) interest on the amount in clause (ii) for the related Accrual Period calculated on the basis, with respect to the LIBOR Certificates, of One-Month LIBOR plus the applicable Certificate Margin, or, with respect to the Class B-4-IO Certificates, 8.000%, as applicable.

Book-Entry Certificates : Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership of which is reflected on the books of the Depository or on the books of a person maintaining an account with the Depository (directly, as a “Depository Participant,” or indirectly, as an indirect participant in accordance with the rules of the Depository and as described in Section 6.06). As of the Closing Date, the Class A-IO Certificates and each Class of LIBOR Certificates constitutes a Class of Book-Entry Certificates.

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

Carryforward Interest : For any Class of Certificates (other than the Class X-1, Class X-2, Class P and Class R Certificates) and Distribution Date, the sum of (1) the amount, if any, by which (x) the sum of (A) Current Interest for such Class for the immediately preceding Distribution Date and (B) any unpaid Carryforward Interest from the immediately preceding Distribution Date exceeds (y) the amount paid in respect of interest on such Class on such immediately preceding Distribution Date, and (2) with respect to the Certificates (other than the Class A-IO Certificates) interest on such amount for the related Accrual Period at the applicable Pass-Through Rate for such Distribution Date.

Certificate : Any one of the certificates of any Class executed and authenticated by the Securities Administrator in substantially the forms attached hereto as Exhibits A-1 through A-6.

Certificate Margin : With respect to the LIBOR Certificates and each Distribution Date on or prior to the first possible Optional Termination Date, 0.170%, 0.330%, 0.250%, 0.600%, 0.750%, 1.570%, 1.830% and 2.350%, for the Class A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class B-1, Class B-2 and Class B-3 Certificates, respectively. With respect to the LIBOR Certificates and each Distribution Date following the first possible Optional Termination Date, 0.340%, 0.660%, 0.500%, 0.900%, 1.125%, 2.355%, 2.745% and 3.525%, for the Class A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class B-1, Class B-2 and Class B-3 Certificates, respectively.

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

Certificate Principal Balance : As to any Certificate (other than the Class A-IO, Class B-4-IO, Class X-1, Class X-2 or Class R Certificates) and as of any Distribution Date, the Initial Certificate Principal Balance of such Certificate less the sum of (i) all amounts distributed with respect to such Certificate in reduction of the Certificate Principal Balance thereof on previous Distribution Dates, (ii) with respect to any Class of Subordinate Certificates entitled to distributions of principal, any reductions in the Certificate Principal Balance of such Certificate deemed to have occurred in connection with the allocations of Realized Losses, if any, pursuant to Section 5.07(a) and (iii) with respect to the Subordinate Certificates entitled to distributions of principal, Subsequent Recoveries added to the Certificate Principal Balance of any such Certificate pursuant to Section 5.07(b), in each case up to the amount of Applied Loss Amounts but only to the extent that any such Applied Loss Amount has not been paid to any Class of Certificates as a Deferred Amount. References herein to the Certificate Principal Balance of a Class of Certificates shall mean the Certificate Principal Balances of all Certificates in such Class.

Certificate Register : The register maintained pursuant to Section 6.02.

Certificateholder or Holder : The person in whose name a Certificate is registered in the Certificate Register (initially, Cede & Co., as nominee for the Depository, in the case of any Book-Entry Certificates).

Charged Off Loan : With respect to any Distribution Date, a Delinquent Mortgage Loan (other than a Mortgage Loan that is a Liquidated Loan and for which no Realized Loss has been reported by the Servicer to the Securities Administrator ) with respect to which the Servicer determines, pursuant to the procedures set forth in Section 3.09, that there will be (i) no Significant Net Recoveries with respect to such Mortgage Loan or (ii) the potential Net Recoveries are anticipated to be an amount, determined by the Servicer in its good faith judgment and in light of other mitigating circumstances, that is insufficient to warrant proceeding through foreclosure or other liquidation of the related Mortgaged Property.

Class : All Certificates bearing the same Class designation as set forth in Section 6.01.

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

Class A Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the aggregate Certificate Principal Balance of the Class A Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 44.00% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class A-1 Certificate : Any Certificate designated as a “Class A-1 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to the Percentage Interest of distributions provided for the Class A-1 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class A-2 Certificate : Any Certificate designated as a “Class A-2 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to the Percentage Interest of distributions provided for the Class A-2 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class A-2 Interest Rate Cap Agreement : The confirmation dated September 29, 2005, evidencing a transaction between the Interest Rate Cap Agreement Provider and the Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S3 (as governed by and subject to the terms and conditions of an ISDA Master Agreement with the attached schedule thereto), generally relating to Basis Risk Shortfalls on the Class A-2 Certificates, a form of which is attached hereto as Exhibit M.

Class A-3 Certificate : Any Certificate designated as a “Class A-3 Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to the Percentage Interest of distributions provided for the Class A-3 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class A-IO Certificate : Any Certificate designated as a “Class A-IO Certificate” on the face thereof, in the form of Exhibit A-6 hereto, representing the right to its Percentage Interest of distributions provided for the Class A-IO Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class A-IO Notional Amount : For any Distribution Date on or prior to the Distribution Date in March 2008, the lesser of (i) the Aggregate Loan Balance as of the first day of the related Due Period and (ii) the related Class A-IO scheduled notional amount for such Distribution Date as set forth in the table below. After the Distribution Date in March 2008, the Class A-IO Notional Amount will equal zero.

Distribution Date	Class A-IO Scheduled Notional Amount ($)
October 2005	22,480,000
November 2005	21,731,000
December 2005	20,981,000
January 2006	20,232,000
February 2006	19,483,000
March 2006	18,733,000
April 2006	17,984,000
May 2006	17,235,000
June 2006	16,485,000
July 2006	15,736,000
August 2006	14,987,000
September 2006	14,237,000
October 2006	13,488,000
November 2006	12,739,000
December 2006	11,989,000
January 2007	11,240,000
February 2007	10,490,000
March 2007	9,741,000
April 2007	8,992,000
May 2007	8,242,000
June 2007	7,493,000
July 2007	6,744,000
August 2007	5,994,000
September 2007	5,245,000
October 2007	4,496,000
November 2007	3,746,000
December 2007	2,997,000
January 2008	2,248,000
February 2008	1,498,000
March 2008	749,000

Class B-1 Certificate : Any Certificate designated as a “Class B-1 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class B-1 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class B-1 Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A and Class M Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class B-1 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 84.34% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class B-2 Certificate : Any Certificate designated as a “Class B-2 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class B-2 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class B-2 Interest Rate Cap Agreement : The confirmation dated September 29, 2005, evidencing a transaction between the Interest Rate Cap Agreement Provider and the Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S3 (as governed by and subject to the terms and conditions of an ISDA Master Agreement with the attached schedule thereto), generally relating to Basis Risk Shortfalls on the Class B-2 Certificates, a form of which is attached hereto as Exhibit M.

Class B-2 Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M and Class B-1 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class B-2 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 88.00% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class B-3 Certificate : Any Certificate designated as a “Class B-3 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class B-3 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class B-3 Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M, Class B-1 and Class B-2 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class B-3 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 90.20% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class B-4-IO Certificate : Any Certificate designated as a “Class B-4-IO Certificate” on the face thereof, in the form of Exhibit A-7 hereto, representing the right to its Percentage Interest of distributions provided for the Class B-4-IO Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class B-4-IO Notional Amount : With respect to any Distribution Date, the Certificate Principal Balance of the Class B-4-PO Certificates immediately prior to such Distribution Date.

Class B-4-PO Certificate : Any Certificate designated as a “Class B-4-PO Certificate” on the face thereof, in the form of Exhibit A-8 hereto, representing the right to its Percentage Interest of distributions provided for the Class B-4-PO Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class B-4-PO Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A, Class M, Class B-1, Class B-2 and Class B-3 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class B-4-PO Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 94.30% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class M-1 Certificate : Any Certificate designated as a “Class M-1 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-1 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class M-1 Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 66.00% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class M-2 Certificate : Any Certificate designated as a “Class M-2 Certificate” on the face thereof, in the form of Exhibit A-2 hereto, representing the right to its Percentage Interest of distributions provided for the Class M-2 Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class M-2 Principal Payment Amount : For any Distribution Date on or after the Stepdown Date and as long as a Trigger Event is not in effect with respect to such Distribution Date, will be the amount, if any, by which (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A and Class M-1 Certificates, in each case, after giving effect to payments on such Distribution Date and (ii) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date exceeds (y) the lesser of (A) the product of (i) 79.00% and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off Date.

Class P Certificate : Any Certificate designated as a “Class P Certificate” on the face thereof, in the form of Exhibit A-4 hereto, representing the right to its Percentage Interest of distributions provided for the Class P Certificates as set forth herein and evidencing a Regular Interest in the Master REMIC.

Class P Certificate Account : The Eligible Account established and maintained by the Securities Administrator pursuant to Section 5.04.

Class R Certificate : Any Certificate designated as a “Class R” Certificate on the face thereof in the form of Exhibit A-5 hereto, representing the right to its Percentage Interest of distributions provided for the Class R Certificates as set forth herein and representing the residual interest in each of the Subsidiary REMIC, Intermediate REMIC 1, Intermediate REMIC 2 and the Master REMIC formed hereby.

Class X-1 Certificate : Any Certificate designated as a “Class X-1 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class X-1 Certificates as set forth herein.

Class X-1 Distributable Amount : With respect to any Distribution Date, the excess of (i) the aggregate of amounts distributable on the Class X-1 Interest for such Distribution Date calculated in the Preliminary Statement, over (ii) the sum of the amounts distributable pursuant to Section 5.06(d)(ii) through (d)(viii) for such Distribution Date.

Class X-1 Interest : As described in the Preliminary Statement.

Class X-2 Certificate : Any Certificate designated as a “Class X-2 Certificate” on the face thereof, in the form of Exhibit A-3 hereto, representing the right to its Percentage Interest of distributions provided for the Class X-2 Certificates as set forth herein.

Cleanup Call : As defined in Section 10.01.

Closing Date : September 29, 2005.

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

Combined Loan-to-Value Ratio : As of any date and Mortgage Loan, the fraction, expressed as a percentage, the numerator of which is the sum of (a) the Stated Principal Balance of such Mortgage Loan at the date of origination plus (b) the outstanding Stated Principal Balance of the senior mortgage loan at the date of origination of such senior mortgage loan and the denominator of which is (a) in the case of a purchase, the lesser of the sales price of the related Mortgaged Property and its Appraised Value determined in an appraisal obtained by the originator at the origination of such Mortgage Loan or (b) in the case of a refinance, the Appraised Value of the Mortgaged Property at the time of such refinance.

Compensating Interest : The amount required to be deposited in the Distribution Account by the Servicer, or by the Master Servicer if the Servicer fails to do so, to offset a Prepayment Interest Shortfall on a Mortgage Loan pursuant to Section 5.02 and Section 3A.11 of this Agreement, respectively; provided, however that the amount of Compensating Interest required to be paid in respect of any Mortgage Loan shall not exceed the Servicing Fee payable to the Servicer or the Master Servicing Fee payable to the Master Servicer, as applicable.

Corporate Trust Office : With respect to the Trustee, the designated office of the Trustee where at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement is located at 452 Fifth Avenue, New York, New York 10018, Attention: Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S3, or at such other address as the Trustee may designate from time to time. With respect to the Securities Administrator, the designated office of the Securities Administrator where at any particular time its corporate trust business with respect to this Agreement shall be administered, which office at the date of the execution of this Agreement, for purposes of Certificate transfers and surrender is located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services – Client Manager (NAAC 2005-S3), and for all other purposes is located at P.O. Box 98, Columbia, Maryland 21046, Attention: Corporate Trust Services – Client Manager (NAAC 2005-S3) (or for overnight deliveries at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services – Client Manager (NAAC 2005-S3)).

Credit Risk Management Agreement : Each of the agreements between the Credit Risk Manager and the Servicer, dated as of September 29, 2005, and between the Credit Risk Manager and the Master Servicer, dated as of September 29, 2005.

Credit Risk Management Fee : As to each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of the Credit Risk Management Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the last day of the related Due Period. The Credit Risk Management Fee shall be payable to the Credit Risk Manager and/or the Seller pursuant to Section 4.07(a)(vii) and 4.08(b).

Credit Risk Management Fee Rate : 0.015% per annum.

Credit Risk Manager : The Murrayhill Company, a Colorado corporation.

Current Interest : For any interest bearing Class of Certificates and Distribution Date, the amount of interest accruing at the applicable Pass-Through Rate on the related Certificate Principal Balance, Class A-IO Notional Amount or Class B-4-IO Notional Amount, as applicable, of such Class during the related Accrual Period; provided, that if and to the extent that on any Distribution Date the Interest Remittance Amount is less than the aggregate distributions required pursuant to Section 5.06(a) without regard to this proviso as a result of Interest Shortfalls, then the Current Interest on each Class will be reduced, on a pro rata basis in proportion to the amount of Current Interest for each Class without regard to this proviso, by such Interest Shortfalls for such Distribution Date. No Current Interest will be payable with respect to any Class of Certificates after the Distribution Date on which the outstanding Certificate Principal Balance, Class A-IO Notional Amount or Class B-4-IO Notional Amount, as applicable, of such Certificate has been reduced to zero.

Curtailment : Any payment of principal on a Mortgage Loan, made by or on behalf of the related Mortgagor, other than a Scheduled Payment, a prepaid Scheduled Payment or a Payoff, which is applied to reduce the outstanding Stated Principal Balance of the Mortgage Loan.

Custodial Account : The account established and maintained by the Servicer with respect to receipts on the Mortgage Loans and related REO Properties in accordance with Section 4.01.

Custodial Agreement : The Custodial Agreement dated as of September 1, 2005, among JPMorgan Chase Bank, N.A., as a Custodian, the Servicer and the Trustee.

Custodian : Each of JPMorgan Chase Bank, N.A., in its capacity as custodian pursuant to the Custodial Agreement, and Wells Fargo Bank, N.A., in its capacity as custodian pursuant to this Agreement.

Cut-off Date : September 1, 2005.

Cut-off Date Principal Balance : As to any Mortgage Loan, the unpaid principal balance thereof as of the close of business on the Cut-off Date after application of all Principal Prepayments received prior to the Cut-off Date and scheduled payments of principal due on or before the Cut-off Date, whether or not received, but without giving effect to any installments of principal received in respect of Due Dates after the Cut-off Date.

Deferred Amount : For any Class of Subordinate Certificates entitled to principal and any Distribution Date, will equal the amount by which (x) the aggregate of the Applied Loss Amounts previously applied in reduction of the Certificate Principal Balance thereof exceeds (y) the sum of (a) the aggregate of amounts previously paid in reimbursement thereof and (b) any additions to the Certificate Principal Balance thereof due to Subsequent Recoveries. Any payment of Deferred Amount pursuant to Section 5.06(d) shall not result in a reduction to the Certificate Principal Balance of the Class of Certificate to which it is distributed.

Definitive Certificates : As defined in Section 6.06.

Deleted Mortgage Loan : A Mortgage Loan replaced or to be replaced by a Replacement Mortgage Loan.

Delinquency Rate : With respect to the Mortgage Loans and any calendar month will be the fraction, expressed as a percentage, the numerator of which is the Aggregate Loan Balance of all Mortgage Loans 60 or more days delinquent (including all Mortgage Loans in bankruptcy or foreclosure and all REO Properties) as of the close of business on the last day of such month, and the denominator of which is the Aggregate Loan Balance as of the close of business on the last day of such month.

Delinquent : A Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to the terms of such Mortgage Loan by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month), then on the last day of such immediately succeeding month. Similarly for “60 days delinquent,” “90 days delinquent” and so on.

Denomination : With respect to each Certificate, the amount set forth on the face thereof as the “Initial Certificate Principal Balance of this Certificate” or the “Initial Notional Amount of this Certificate” or, if neither of the foregoing, the Percentage Interest appearing on the face thereof.

Depositor : Nomura Asset Acceptance Corporation, a Delaware corporation, or its successor in interest.

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

Depository Agreement : With respect to the Class of Book-Entry Certificates, the agreement among the Depositor, the Securities Administrator and the initial Depository, dated as of the Closing Date, substantially in the form of Exhibit I.

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

Determination Date : With respect to any Distribution Date, the 15th day of the month of such Distribution Date or, if such 15th day is not a Business Day, the immediately preceding Business Day.

Disqualified Organization : A “disqualified organization” under Section 860E of the Code, which as of the Closing Date is any of: (i) the United States, any State or political subdivision thereof, any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (ii) any organization (other than a cooperative described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code unless such organization is subject to the tax imposed by Section 511 of the Code, (iii) any organization described in Section 1381(a)(2)(C) of the Code, (iv) an “electing large partnership” within the meaning of Section 775 of the Code or (v) any other Person so designated by the Depositor and the Securities Administrator based upon an Opinion of Counsel provided by nationally recognized counsel to the Securities Administrator that the holding of an ownership interest in a Residual Certificate by such Person may cause the Trust Fund or any Person having an ownership interest in any Class of Certificates (other than such Person) to incur liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in the Residual Certificate to such Person. A corporation will not be treated as an instrumentality of the United States or of any state or political subdivision thereof, if all of its activities are subject to tax and, a majority of its board of directors is not selected by a governmental unit. The term “United States”, “State” and “international organizations” shall have the meanings set forth in Section 7701 of the Code.

Distribution Account : Each trust account or accounts related to the Mortgage Loans created and maintained by the Securities Administrator pursuant to Section 4.06 in the name of the Trustee for the benefit of the Certificateholders and designated “HSBC Bank USA, National Association, in trust for registered holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-S3”. Funds in the Distribution Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement. The Distribution Account shall be an Eligible Account.

Distribution Date : The 25th day of each calendar month after the initial issuance of the Certificates, or if such 25th day is not a Business Day, the next succeeding Business Day, commencing in October 2005.

Due Date : As to any Mortgage Loan, the date in each month on which the related Scheduled Payment is due, as set forth in the related Mortgage Note.

Due Period : With respect to any Distribution Date, the period from the second day of the calendar month preceding the calendar month in which such Distribution Date occurs through close of business on the first day of the calendar month in which such Distribution Date occurs.

Eligible Account : Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company, the long-term unsecured debt obligations and short-term unsecured debt obligations of which are rated by each Rating Agency in one of its two highest long-term and its highest short-term rating categories respectively, at the time any amounts are held on deposit therein, or (ii) an account or accounts in a depository institution or trust company in which such accounts are insured by the FDIC (to the limits established by the FDIC) and the uninsured deposits in which accounts are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Trustee, the Securities Administrator and to each Rating Agency, the Certificateholders have a claim with respect to the funds in such account or a perfected first priority security interest against any collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution or trust company in which such account is maintained, or (iii) a segregated, non-interest bearing trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv) any other account acceptable to the Rating Agencies as evidenced in writing by the Rating Agencies. Eligible Accounts may bear interest, and may include, if otherwise qualified under this definition, accounts maintained with the Trustee or the Securities Administrator.

Errors and Omissions Insurance Policy : An errors and omissions insurance policy to be maintained by the Servicer pursuant to Section 3.08.

Escrow Account : Shall mean the accounts maintained by the Servicer pursuant to Section 4.04. Each Escrow Account shall be an Eligible Account.

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

ERISA-Qualifying Underwriting : A best efforts or firm commitment underwriting or private placement that meets the requirements of the Exemption.

ERISA Restricted Certificate : Each of the Class B-4-IO, Class B-4-PO, Class X-1, Class X-2, Class P and Class R Certificates, and Certificates of any Class that no longer satisfy the applicable rating requirements of the Exemption.

Excess Liquidation Proceeds : To the extent not required by law to be paid to the related Mortgagor, the excess, if any, of any Liquidation Proceeds with respect to a Mortgage Loan over the Stated Principal Balance of such Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate through the last day of the month in which the Mortgage Loan has been liquidated.

Exemption : Prohibited Transaction Exemption 93-32, as amended from time to time.

Expense Fee : As to each Mortgage Loan, the sum of the Servicing Fee, the Master Servicing Fee and the Credit Risk Manager Fee.

Expense Fee Rate : As to each Mortgage Loan and any date of determination, the sum of the Servicing Fee Rate, the Master Servicing Fee Rate and the Credit Risk Manager Fee Rate.

Fannie Mae : Fannie Mae (formerly, Federal National Mortgage Association), or any successor thereto.

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

Fidelity Bond : A fidelity bond to be maintained by the Servicer pursuant to Section 3.08.

Final Certification : The certification of each Custodian in the form attached hereto as Exhibit C-3.

Final Recovery Determination : With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by the Seller or the Majority Class X-2 Certificateholder pursuant to or as contemplated by Section 2.03(c) or Section 3.23, respectively), a determination made by the Servicer pursuant to this Agreement that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The Servicer shall maintain records of each Final Recovery Determination made thereby.

FIRREA : The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended.

Fixed-Rate Certificates : Class B-4-IO and Class A-IO Certificates.

Floating Rate Payer Payment Date : As defined in the related Interest Rate Cap Agreement.

Freddie Mac : Federal Home Loan Mortgage Corporation, or any successor thereto.

Indemnified Persons : The Trustee, the Securities Administrator, the Master Servicer (including any successor to the Master Servicer), the Servicer (including any successor to the Servicer), the Custodians, the Depositor, the Seller, the Trust Fund and their officers, directors, agents and employees and, with respect to the Trustee and the Securities Administrator, any separate co-trustee or co-securities administrator and its officers, directors, agents and employees.

Initial Certificate Principal Balance : With respect to any Certificate (other than the Class A-IO, Class B-4-IO, Class X-1, Class X-2 and Class R Certificates), the Certificate Principal Balance of such Certificate or any predecessor Certificate on the Closing Date.

Initial Certification : The certification of each Custodian in the form attached hereto as Exhibit C-1.

Initial Notional Amount : With respect to the Class A-IO Certificates, the Class A-IO Notional Amount of such Certificates or any predecessor Certificates on the Closing Date, and with respect to the Class B-4-IO Certificates, the Class B-4-IO Notional Amount of such Certificates or any predecessor Certificates on the Closing Date.

Insurance Policy : With respect to any Mortgage Loan included in the Trust Fund, any insurance policy, including all riders and endorsements thereto in effect with respect to such Mortgage Loan, including any replacement policy or policies for any Insurance Policies.

Insurance Proceeds : Proceeds paid in respect of the Mortgage Loans pursuant to any Insurance Policy or any other insurance policy covering a Mortgage Loan, to the extent such proceeds are payable to the mortgagee under the Mortgage, the Servicer or the trustee under the deed of trust and are not applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the servicing standard set forth in Section 3.01 other than any amount included in such Insurance Proceeds in respect of Insured Expenses.

Insured Expenses : Expenses covered by any Insurance Policy with respect to the Mortgage Loans.

Interest Determination Date : Shall mean the second LIBOR Business Day preceding the commencement of each Accrual Period.

Interest Rate Cap Account : The separate Eligible Account created and initially maintained by the Securities Administrator pursuant to Section 5.08 in the name of the Trustee for the benefit of the Certificateholders and designated “HSBC Bank USA, National Association, in trust for registered holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-S3.” Funds in the Interest Rate Cap Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement. The Interest Rate Cap Account will not be an asset of any REMIC.

Interest Rate Cap Agreement : Each of the Class A-2 Interest Rate Cap Agreement, the Class B-2 Interest Rate Cap Agreement and the Mortage Loan Interest Rate Cap Agreement.

Interest Rate Cap Agreement Provider : Bear Stearns Financial Products Inc.

Interest Rate Cap Agreement Termination Date : With respect to the Mortgage Loan Interest Rate Cap Agreement, the Distribution Date in September 2011, after any required payment is made. With respect to the Class A-2 Interest Rate Cap Agreement and the Class B-2 Interest Rate Cap Agreement, the Distribution Date in January 2011, after any required payment is made.

Interest Remittance Amount : For any Distribution Date, subject to amounts otherwise payable or recoverable under the terms of this Agreement, an amount equal to (A) the sum of (1) all interest collected (other than related Payaheads, if applicable) or advanced in respect of Scheduled Payments on the Mortgage Loans during the related Due Period, the interest portion of Payaheads previously received and intended for application in the related Collection Period and the interest portion of all Payoffs and Curtailments received on the Mortgage Loans during the related Prepayment Period, less (x) the Expense Fee with respect to the Mortgage Loans and (y) unreimbursed Advances and other amounts due to the Trustee, the Custodians, the Master Servicer or the Servicer, as applicable, with respect to such Mortgage Loans, to the extent allocable to interest, (2) all Compensating Interest Payments paid by the Servicer or the Master Servicer with respect to the Mortgage Loans with respect to such Distribution Date, (3) the portion of any Substitution Adjustment Amount, Termination Price or Purchase Price paid with respect to such Mortgage Loans and received by the Servicer or the Securities Administrator during the related Due Period allocable to interest, and (4) all Liquidation Proceeds, and any Insurance Proceeds and other recoveries (net of unreimbursed Advances, Servicing Advances and expenses, to the extent allocable to interest, and unpaid Servicing Fees) collected with respect to such Mortgage Loans during the related Due Period, to the extent allocable to interest, minus (B) (x) all amounts payable or reimbursable in respect of expenses or indemnities to the Servicer, the Master Servicer, the Securities Administrator, the Trustee, the Credit Risk Manager or the Custodians in accordance with the provisions of this Agreement or the Custodial Agreement, as applicable, and (y) Prepayment Charges received with respect to such Mortgage Loans during the related Prepayment Period to the extent such amounts would be considered interest.

Interest Shortfall : With respect to any Distribution Date, the aggregate shortfall, if any, in collections of interest (adjusted to the related Net Mortgage Rates) on Mortgage Loans resulting from (a) Prepayment Interest Shortfalls to the extent not covered by Compensating Interest and (b) interest payments on certain of the Mortgage Loans being limited pursuant to the provisions of the Relief Act.

Interim Certification : The certification of each Custodian in the form attached hereto as Exhibit C-3.

Intermediate REMIC 1 : As defined in the Preliminary Statement.

Intermediate REMIC 2 : As defined in the Preliminary Statement.

ISDA : International Swaps and Derivatives Association, Inc.

ISDA Master Agreement : An ISDA Master Agreement (Multicurrency-Cross Border) in the form published by ISDA in 1992 including the schedule thereto.

Latest Possible Maturity Date : With respect to each Class of Certificates (other than the Class A-IO Certificates), the Distribution Date in August 2035. With respect to the Class A-IO Certificates, the Distribution Date in March 2008. For purposes of the Treasury Regulations under Code section 860A through 860G, the latest possible maturity date of each regular interest issued by each REMIC shall be the Latest Possible Maturity Date.

LIBOR Business Day : Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of New York or in the city of London, England are required or authorized by law to be closed.

LIBOR Certificates : Class A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class B-1, Class B-2 and Class B-3 Certificates.

LIBOR Determination Date : The second LIBOR Business Day before the first day of the related Accrual Period.

Liquidated Loan : With respect to any Distribution Date, a defaulted Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale or other realization as provided by applicable law governing the real property subject to the related Mortgage and any security agreements and as to which the Servicer has certified in the related Prepayment Period to the Securities Administrator that it has made a Final Recovery Determination.

Liquidation Proceeds : Amounts, other than Insurance Proceeds, received in connection with the partial or complete liquidation of a Mortgage Loan, whether through trustee’s sale, foreclosure sale or otherwise, or in connection with any condemnation or partial release of a Mortgaged Property and any other proceeds received with respect to an REO Property, less the sum of related unreimbursed Advances, Servicing Fees, Master Servicing Fees and Servicing Advances and all expenses of liquidation, including property protection expenses and foreclosure and sale costs, including court and reasonable attorneys fees.

Lower Tier Interest : An interest in the Subsidiary REMIC or an Intermediate REMIC, as described in the Preliminary Statement, those interests having an LT1 designation being interests in the Subsidiary REMIC, those having an LT2 designation being interests in Intermediate REMIC 1 and those having an LT3 designation being interests in the Intermediate REMIC 2.

Majority Class X-1 Certificateholder : The Holder of a 50.01% or greater Percentage Interest in the Class X-1 Certificates.

Majority Class X-2 Certificateholder : The Holder of a 50.01% or greater Percentage Interest in the Class X-2 Certificates.

Master REMIC : As specified in the Preliminary Statement.

Master Servicer : Wells Fargo Bank, N.A., a national banking association or any successor thereto or any successor hereunder.

Master Servicer Default : As defined in Section 8.03.

Master Servicing Fee : As to each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of the Master Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period.

Master Servicing Fee Rate : For any Distribution Date, 0.025% per annum.

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

MERS : Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.

MERS® System : The system of recording transfers of Mortgages electronically maintained by MERS.

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

MOM Loan : Any Mortgage Loan as to which MERS is acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.

Monthly Excess Cashflow : For any Distribution Date, an amount equal to the sum of the Monthly Excess Interest and Overcollateralization Release Amount, if any, for such date.

Monthly Excess Interest : As to any Distribution Date, the Interest Remittance Amount remaining after the application of payments pursuant to clauses (i) through (vii) of Section 5.06(a).

Monthly Statement : The statement delivered to the Certificateholders pursuant to Section 5.09.

Moody’s : Moody’s Investors Service, Inc. or its successor in interest.

Mortgage : The mortgage, deed of trust or other instrument creating a second lien on or second priority ownership interest in an estate in fee simple in real 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 delivered to the Trustee, or a Custodian on its behalf, to be added to the Mortgage File pursuant to this Agreement.

Mortgage Loan Interest Rate Cap Agreement : The confirmation dated September 29, 2005, evidencing a transaction between the Interest Rate Cap Agreement Provider and the Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S3 (as governed by and subject to the terms and conditions of an ISDA Master Agreement with the attached schedule thereto), generally relating to Realized Losses on the Mortgage Loans, a form of which is attached hereto as Exhibit M.

Mortgage Loan Purchase Agreement : That certain mortgage loan purchase agreement dated as of September 1, 2005, by and between the Seller, as seller and the Depositor, as purchaser, relating to the Mortgage Loans.

Mortgage Loans : Such of the Mortgage Loans transferred and assigned to the Trustee pursuant to the provisions hereof, as from time to time are held as a part of the Trust Fund (including any REO Property), the mortgage loans so held being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of title of the related Mortgaged Property.

Mortgage Loan Schedule : The list of Mortgage Loans (as from time to time amended by the Servicer to reflect the deletion of Deleted Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the provisions of this Agreement) transferred to the Trustee as part of the Trust Fund and from time to time subject to this Agreement, the initial Mortgage Loan Schedule being attached hereto as Exhibit B, setting forth the following information with respect to each Mortgage Loan:

(i)

the loan number;

(ii)

the Mortgage Rate in effect as of the Cut-off Date;

(iii)

the Servicing Fee Rate;

(iv)

the Net Mortgage Rate in effect as of the Cut-off Date;

(v)

the maturity date;

(vi)

the original principal balance;

(vii)

the Cut-off Date Principal Balance;

(viii)

the original term;

(ix)

the remaining term;

(x)

the property type;

(xi)

with respect to each MOM Loan, the related MIN;

(xii)

a code indicating whether the Mortgage Loan is subject to a Prepayment Charge, the term of such Prepayment Charge and the amount of such Prepayment Charge; and

(xiii)

the name of the Custodian.

Such schedule shall also set forth the aggregate Cut-off Date Principal Balance for all of the Mortgage Loans.

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

Mortgage Rate : The annual rate of interest borne by a Mortgage Note.

Mortgaged Property : The underlying property securing a Mortgage Loan.

Mortgagor : The obligors on a Mortgage Note.

Net Funds Cap : For any distribution date and the LIBOR or Class B-4-IO Certificates, a per annum rate equal to (a) a fraction, expressed as a percentage, the numerator of which is the product of (1) the Optimal Interest Remittance Amount for such date, less Current Interest due on the Class A-IO Certificates on such date and (2) 12, and the denominator of which is the Aggregate Loan Balance as of the first day of the preceding calendar month (taking into account scheduled payments due on such date), multiplied by (b) with respect to the LIBOR Certificates, a fraction, the numerator of which is 30 and the denominator of which is the actual number of days in the immediately preceding Accrual Period. With respect to the Class A-IO Certificates and any distribution date, a per annum rate equal to (a) a fraction, expressed as a percentage, the numerator of which is the product of (1) the Optimal Interest Remittance Amount for such date and (2) 12, and the denominator of which is the Class A-IO Notional Amount for such distribution date.

Net Mortgage Rate : As to each Mortgage Loan, and at any time, the per annum rate equal to the related Mortgage Rate less the Expense Fee Rate.

Net Recovery : Any proceeds received by the Servicer on a delinquent or Charged Off Loan (including any Liquidation Proceeds received on a Charged Off Loan), net of any Servicing Fee and any other related expenses.

Net WAC Rate : As to any Distribution Date, a rate equal to the weighted average of the Net Mortgage Rates on the Mortgage Loans for the related Due Period, weighted on the basis of the Stated Principal Balances as of the first day of the related Due Period and adjusted for prepayments made during such Due Period that were distributed on the preceding Distribution Date.

Non-Book-Entry Certificate : Any Certificate other than a Book-Entry Certificate.

Nonrecoverable Advance : Any portion of an Advance or Servicing Advance previously made or proposed to be made by the Servicer, the Master Servicer as Successor Servicer or the Trustee as Successor Master Servicer pursuant to this Agreement, that, in the good faith judgment of the Servicer, the Master Servicer or the Trustee, as applicable, will not or, in the case of a proposed Advance or Servicing Advance, would not, be ultimately recoverable by it from the related Mortgagor, related Liquidation Proceeds, Insurance Proceeds or otherwise.

Officer’s Certificate : A certificate (i) signed by the Chairman of the Board, the Vice Chairman of the Board, the President, a Vice President (however denominated), an Assistant Vice President, the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Depositor, the Master Servicer, the Securities Administrator or the Trustee (or any other officer customarily performing functions similar to those performed by any of the above designated officers and also to whom, with respect to a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with a particular subject) or (ii), if provided for in this Agreement, signed by a Authorized Servicer Representative, as the case may be, and delivered to the Depositor, the Seller, the Master Servicer, the Securities Administrator and/or the Trustee, as the case may be, as required by this Agreement.

One-Month LIBOR : With respect to any Accrual Period, the rate determined by the Securities Administrator on the related Interest Determination Date on the basis of the rate for U.S. dollar deposits for one month that appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest Determination Date. If such rate does not appear on such page (or such other page as may replace that page on that service, or if such service is no longer offered, such other service for displaying One-Month LIBOR or comparable rates as may be reasonably selected by the Securities Administrator), One-Month LIBOR for the applicable Accrual Period will be the Reference Bank Rate. If no such quotations can be obtained by the Securities Administrator and no Reference Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period. The establishment of One-Month LIBOR on each Interest Determination Date by the Securities Administrator and the Securities Administrator’s calculation of the rate of interest applicable to the LIBOR Certificates for the related Accrual Period shall, in the absence of manifest error, be final and binding.

Opinion of Counsel : A written opinion of counsel, who may be counsel for the Seller, the Depositor, the Master Servicer or the Servicer, reasonably acceptable to each addressee of such opinion; provided that with respect to Section 2.05, 7.05, 7.07 or 11.01, or the interpretation or application of the REMIC Provisions, such counsel must (i) in fact be independent of the Seller, Depositor, the Master Servicer and the Servicer, (ii) not have any direct financial interest in the Seller, Depositor, the Master Servicer or the Servicer or in any affiliate of any of them, and (iii) not be connected with the Seller, Depositor, the Master Servicer or the Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Optimal Interest Remittance Amount : For any Distribution Date, will be equal to the excess of (i) the product of (1) (x) the weighted average Net Mortgage Rate of the Mortgage Loans as of the first day of the preceding calendar month (taking into account scheduled payments due on such day) divided by (y) 12 and (2) the Aggregate Loan Balance as of the first day of the preceding calendar month (taking into account scheduled payments due on such date), over (ii) any expenses that reduce the Interest Remittance Amount that did not arise as a result of a default or delinquency of the Mortgage Loans or were not taken into account in computing the Expense Fee Rate.

Optional Termination : The termination of the Trust Fund as a result of the purchase of all of the Mortgage Loans and any related REO Property pursuant to the last paragraph of Section 10.01.

Optional Termination Date : The first Distribution Date on which the Master Servicer may exercise the Cleanup Call as described in Section 10.01.

OTS : The Office of Thrift Supervision or any successor thereto.

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

(a)

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

(b)

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

Outstanding Mortgage Loan : As of any date of determination, a Mortgage Loan with a Stated Principal Balance greater than zero that was not the subject of a Payoff, and that did not become a Liquidated Loan, prior to the end of the related Prepayment Period.

Overcollateralization Amount : For any Distribution Date, an amount equal to the amount, if any, by which (x) the Aggregate Loan Balance for such Distribution Date exceeds (y) the aggregate Certificate Principal Balance of the Certificates after giving effect to payments on such Distribution Date.

Overcollateralization Deficiency : For any Distribution Date will be equal to the amount, if any, by which (x) the Targeted Overcollateralization Amount for such Distribution Date exceeds (y) the Overcollateralization Amount for such Distribution Date, calculated for this purpose after giving effect to the reduction on such Distribution Date of the aggregate Certificate Principal Balance of the Certificates resulting from the payment of the Principal Payment Amount on such Distribution Date, but prior to allocation of any Applied Loss Amount on such Distribution Date.

Overcollateralization Release Amount : For any Distribution Date, an amount equal to the lesser of (x) the related Principal Remittance Amount for such Distribution Date and (y) the amount, if any, by which (1) the Overcollateralization Amount for such date, calculated for this purpose on the basis of the assumption that 100% of the Principal Remittance Amount for such date is applied on such date in reduction of the aggregate of the Certificate Principal Balance of the Certificates, exceeds (2) the Targeted Overcollateralization Amount for such date.

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

Pass-Through Rate : With respect to the any Class of LIBOR Certificates and any Distribution Date, a per annum rate equal to the lesser of (x) One-Month LIBOR for such Distribution Date, plus the related Certificate Margin and (y) the related Net Funds Cap for such Distribution Date. With respect to the Class A-IO Certificates and (a) any Distribution Date on or prior to March 2008, a per annum rate equal to the lesser of (i) 20.00% and (ii) the related Net Funds Cap for such Distribution Date and (b) for each other Distribution Date, zero. With respect to the Class B-4-IO Certificates for each Distribution Date shall be the lesser of (a) 8.000% and (b) the related Net Funds Cap for such Distribution Date.

Payahead : Any Scheduled Payment intended by the related Mortgagor to be applied in a Due Period subsequent to the Due Period in which such payment was received.

Payoff : Any payment of principal on a Mortgage Loan equal to the entire outstanding Scheduled Principal Balance of such Mortgage Loan, if received in advance of the last scheduled Due Date for such Mortgage Loan and accompanied by an amount of interest equal to accrued unpaid interest on the Mortgage Loan to the date of such payment-in-full.

Percentage Interest : With respect to any Certificate of a specified Class, the Percentage Interest set forth on the face thereof or the percentage obtained by dividing the Denomination of such Certificate by the aggregate of the Denominations of all Certificates of such Class.

Periodic Rate Cap : With respect the Adjustment Date for an Mortgage Loan, 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 Interest Rate or the Minimum Mortgage Interest Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior to such Adjustment Date.

Permitted Investments : At any time, any one or more of the following obligations and securities:

(i)

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

(ii)

general obligations of or obligations guaranteed by any state of the United States or the District of Columbia receiving the highest long-term debt rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(iii)

[Reserved];

(iv)

commercial or finance company paper which is then receiving the highest commercial or finance company paper rating of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(v)

certificates of deposit, demand or time deposits, or bankers’ acceptances issued by any depository institution or trust company incorporated under the laws of the United States or of any state thereof and subject to supervision and examination by federal and/or state banking authorities (including the Trustee or the Securities Administrator in its commercial banking capacity), provided that the commercial paper and/or long term unsecured debt obligations of such depository institution or trust company are then rated one of the two highest long-term and the highest short-term ratings of each such Rating Agency for such securities, or such lower ratings as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(vi)

demand or time deposits or certificates of deposit issued by any bank or trust company or savings institution to the extent that such deposits are fully insured by the FDIC;

(vii)

guaranteed reinvestment agreements issued by any bank, insurance company or other corporation containing, at the time of the issuance of such agreements, such terms and conditions as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any such Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(viii)

repurchase obligations with respect to any security described in clauses (i) and (ii) above, in either case entered into with a depository institution or trust company (acting as principal) described in clause (v) above;

(ix)

securities (other than stripped bonds, stripped coupons or instruments sold at a purchase price in excess of 115% of the face amount thereof) bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof which, at the time of such investment, have one of the two highest long term ratings of each Rating Agency, or such lower rating as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

(x)

units of money market funds registered under the Investment Company Act of 1940 including funds managed or advised by the Trustee, the Securities Administrator or an affiliate thereof having a rating by S&P of AAAm-G, AAA-m, or AA-m, and if rated by Moody’s, rated Aaa, Aa1 or Aa2;

(xi)

short term investment funds sponsored by any trust company or banking association incorporated under the laws of the United States or any state thereof (including any such fund managed or advised by the Trustee, the Securities Administrator or any affiliate thereof) which on the date of acquisition has been rated by each Rating Agency in their respective highest applicable rating category or such lower rating as will not result in the downgrading or withdrawal of the ratings then assigned to the Certificates by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency; and

(xii)

such other investments having a specified stated maturity and bearing interest or sold at a discount acceptable to each Rating Agency as will not result in the downgrading or withdrawal of the rating then assigned to the Certificates by any Rating Agency, as evidenced by a signed writing delivered by each Rating Agency, as evidenced by a signed writing delivered by each Rating Agency;

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.

Permitted Transferee : Any person other than a Disqualified Organization or a Person that is not a U.S. Person.

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

Prepayment Assumption : The assumed rate of prepayment, as described in the Prospectus relating to each Class of LIBOR and Fixed Rate Certificates.

Prepayment Charge : With respect to any Principal Prepayment, 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), as shown on the Prepayment Charge Schedule.

Prepayment Charge Schedule : As of any date, the list of Mortgage Loans providing for a Prepayment Charge included in the Trust Fund on such date, attached hereto as Exhibit K (including the prepayment charge summary attached thereto). The Depositor shall deliver or cause the delivery of the Prepayment Charge Schedule to the Servicer, the Master Servicer, the Securities Administrator and the Trustee on the Closing Date. The Prepayment Charge Schedule shall set forth the following information with respect to each Prepayment Charge:

(i)

the Mortgage Loan identifying number;

(ii)

a code indicating the type of Prepayment Charge;

(iii)

the date on which the first Monthly Payment was due on the related Mortgage Loan;

(iv)

the term of the related Prepayment Charge;

(v)

the original Stated Principal Balance of the related Mortgage Loan; and

(vi)

the Stated Principal Balance of the related Mortgage Loan as of the Cut-off Date.

Prepayment Interest Shortfall : With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the related Prepayment Period, (other than a Principal Prepayment in full resulting from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.23 or 10.01 hereof), the amount, if any, by which (i) one month’s interest at the applicable Mortgage Rate, as reduced by the Servicing Fee Rate, on the Stated Principal Balance of such Mortgage Loan immediately prior to such prepayment exceeds (ii) the amount of interest paid or collected in connection with such Principal Prepayment less the related Servicing Fee.

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

Principal Payment Amount: With respect to each Distribution Date, the Principal Remittance Amount for such date minus the Overcollateralization Release Amount, if any, for such Distribution Date.

Principal Prepayment : Any Mortgagor payment or other recovery of (or proceeds with respect to) principal on a Mortgage Loan (including loans purchased or repurchased under Sections 2.02, 2.03, 3.09, 3.23 and 10.01 hereof) that is received in advance of its scheduled Due Date and is not accompanied by an amount as to interest representing scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment. Partial Principal Prepayments shall be applied by the Servicer in accordance with the terms of the related Mortgage Note.

Principal Remittance Amount : For any Distribution Date, subject to amounts otherwise payable or recoverable under the terms of this Agreement, an amount equal to (A) the sum of (1) all principal collected (other than Payaheads) or advanced in respect of Scheduled Payments on the Mortgage Loans during the related Due Period (less unreimbursed Advances, Servicing Advances and other amounts due to the Servicer, the Master Servicer, the Custodians and the Trustee with respect to such Mortgage Loans, to the extent allocable to principal) and the principal portion of Payaheads previously received and intended for application in the related Due Period, (2) the Principal Prepayments, if any, received during the related Prepayment Period, (3) the Purchase Price for any repurchased Mortgage Loan by the Seller or any Mortgage Loan purchased by the Majority Class X-2 Certificateholder pursuant to Section 3.09 or 3.23, during the calendar month immediately preceding such Distribution Date, (4) the portion of any Substitution Adjustment Amount paid with respect to any Deleted Mortgage Loans during the calendar month immediately preceding such Distribution Date allocable to principal, (5) amounts in respect of principal on the Mortgage Loans paid by the Master Servicer Pursuant to Section 10.01, (6) amounts withdrawn from the Interest Rate Cap Account from payments under the Mortgage Loan Interest Rate Cap Agreement to cover Realized Losses on the Mortgage Loans incurred during the related Due Period, and (7) all Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds and other Subsequent Recoveries (net of unreimbursed Advances, Servicing Advances and other expenses, to the extent allocable to principal) collected with respect to the Mortgage Loans during the prior calendar month, to the extent allocable to principal, minus (B) (x) to the extent that the Interest Remittance Amount for such Distribution Date is insufficient therefor, all amounts payable or reimbursable to the Servicer, the Master Servicer, the Securities Administrator, the Trustee or the Custodians in accordance with the provisions of this Agreement or the Custodial Agreement, as applicable, and (y) the amount of any Prepayment Charges on the Mortgage Loans to the extent such amounts would be principal, received during the related Prepayment Period.

Private Certificate : The Class B-4-IO, Class B-4-PO, Class X-1, Class X-2, Class P and Class R Certificates.

Private Offering Circular : The private offering circular dated September 29, 2005 relating to the Class B-4-IO, Class B-4-PO, Class X-1, Class P and Class R Certificates.

Prospectus : The base prospectus dated September 27, 2005 relating to the LIBOR and Class A-IO Certificates, as supplemented by the prospectus supplement to the base prospectus dated September 27, 2005.

PUD : A planned unit development.

Purchase Price : With respect to any Mortgage Loan to be repurchased by the Seller or the Majority Class X-2 Certificateholder, as applicable, pursuant to Section 2.02, 2.03, 3.09 or 3.23 hereof and as confirmed by an Officer’s Certificate from the Seller or the Majority Class X-2 Certificateholder to the Trustee, an amount equal to the sum of (i) 100% of the outstanding principal balance of the Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon at the applicable Mortgage Rate through the first day of the month in which the Purchase Price is to be distributed to the related Certificateholders, plus any portion of the Servicing Fee, Master Servicing Fee, Servicing Advances and Advances payable to the Servicer or the Master Servicer of the Mortgage Loan plus (iii) any costs and damages of the Trust Fund in connection with any violation by such Mortgage Loan of any abusive or predatory lending law, including any expenses incurred by the Trustee with respect to such Mortgage Loan prior to the purchase thereof.

QIB : A “qualified institutional buyer”, as such term is defined in Rule 144A under the Securities Act.

Rating Agency : Each of S&P and Moody’s. If any such organization or its successor is no longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization, or other comparable Person, designated by the Depositor, notice of which designation shall be given to the Trustee and the Securities Administrator. References herein to a given rating category of a Rating Agency shall mean such rating category without giving effect to any modifiers.

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 Stated 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, minus (iii) 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 pursuant to this Agreement. To the extent the Servicer receives Subsequent Recoveries and respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the extent that Subsequent Recoveries are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.

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 Stated Principal Balance of the related Mortgage Loan as of the date of acquisition of such REO Property, 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, minus (iii) the aggregate of all unreimbursed Advances and Servicing Advances.

In addition, to the extent the Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the extent such Subsequent Recoveries are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.

Record Date : With respect to any Class of Definitive Certificates and any Distribution Date, the last day of the calendar month preceding the month in which such Distribution Date occurs. With respect to any Class of Book-Entry Certificates that is a LIBOR Certificate and any Distribution Date, the Business Day immediately preceding such Distribution Date; provided, however, that following the date on which Definitive Certificates for such Certificates are available pursuant to Section 6.02, the Record Date shall be the last day of the calendar month preceding the month in which such Distribution Date occurs. With respect to the Fixed Rate Certificates and any Distribution Date, the last day of the calendar month preceding the month in which such Distribution Date occurs.

Reference Banks : Shall mean leading banks selected by the Securities Administrator and engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) which have been designated as such by the Securities Administrator and (iii) which are not controlling, controlled by, or under common control with, the Depositor, the Seller, the Master Servicer or the Servicer.

Reference Bank Rate : With respect to any Accrual Period shall mean the arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of 0.03125%, of the offered rates for United States dollar deposits for one month that are quoted by the Reference Banks as of 11:00 a.m., London time, on the related Interest Determination Date to prime banks in the London interbank market for a period of one month in an amount approximately equal to the aggregate Certificate Principal Balance of the LIBOR Certificates for such Accrual Period, provided that at least two such Reference Banks provide such rate. If fewer than two offered rates appear, the Reference Bank Rate will be the arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of 0.03125%, of the rates quoted by one or more major banks in New York City, selected by the Securities Administrator, as of 11:00 a.m., New York City time, on such date for loans in United States dollars to leading European banks for a period of one month in amounts approximately equal to the aggregate Certificate Principal Balance of the LIBOR Certificates for such Accrual Period.

Regular Certificate : Any Certificate other than a Residual Certificate.

Regular Interest : A “regular interest” within the meaning of Section 860G(a)(1) of the Code.

Relief Act : The Servicemembers Civil Relief Act of 2003, as amended from time to time, and any state or local law providing for similar relief.

Release Date : As defined in Section 3.09 hereof.

Released Loan : Any Charged Off Loan that is released by the Servicer to the Majority Class X-2 Certificateholder pursuant to Section 3.09 (on behalf of the Trust Fund). Any Released Loan will no longer be an asset of any REMIC or the Trust Fund.

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

REMIC Maximum Rate : As defined in the Preliminary Statement.

REMIC Opinion : Shall mean an Opinion of Counsel to the effect that the proposed action will not have an adverse affect on any REMIC created hereunder.

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

Remittance Date : Shall mean the 18th day of the month and if such day is not a Business Day, the immediately preceding Business Day.

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

Replacement Mortgage Loan : A Mortgage Loan or Mortgage Loans in the aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on the date of such substitution, as confirmed in a Request for Release, (i) have a Stated Principal Balance, after deduction of the principal portion of the Scheduled Payment due in the month of substitution, not in excess of, and not less than 90% of, the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have an adjustable Mortgage Rate not less than or more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher credit quality characteristics than that of the Deleted Mortgage Loan; (iv) have a Combined Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan; (v) have a remaining term to maturity no greater than (and not more than one year less than) that of the Deleted Mortgage Loan, provided that the remaining term to maturity of any such Mortgage Loan shall be no greater than the last maturing Mortgage Loan in the Trust immediately prior to any substitution; (vi) not permit conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii) be secured by a first lien on the related Mortgaged Property; (viii) constitute the same occupancy type as the Deleted Mortgage Loan or be owner occupied; (ix) not be a negatively-amortizing loan; (x) if the Deleted Loan is not a Balloon Loan, not be a Balloon Loan; and (xi) comply with each representation and warranty set forth in the Mortgage Loan Purchase Agreement.

Request for Release : The Request for Release to be submitted by the Seller, the Master Servicer or the Servicer to the related Custodian substantially in the form of Exhibit H. Each Request for Release furnished to a Custodian by the Seller, the Master Servicer or the Servicer shall be in duplicate and shall be executed by an officer of such Person, a Master Servicing Officer or a Authorized Servicer Representative, as applicable (or, if furnished electronically to the related Custodian, shall be deemed to have been sent and executed by such Person).

Required Insurance Policy : With respect to any Mortgage Loan, any insurance policy that is required to be maintained from time to time under this Agreement.

Residual Certificates : The Class R Certificates.

Responsible Officer : With respect to the Securities Administrator, any Vice President, any Assistant Vice President, the Secretary, any Assistant Secretary, any Trust Officer, any other officer customarily performing functions similar to those performed by any of the above designated officers or other officers of the Securities Administrator specified by the Securities Administrator having direct responsibility over this Agreement and customarily performing functions similar to those performed by any one of the designated officers, as to whom, with respect to a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with the particular subject. With respect to the Trustee, any officer in the Corporate Trust Office with direct responsibility for the administration of this Agreement.

Rolling Three Month Delinquency Rate : With respect to any Distribution Date and the Mortgage Loans will be the fraction, expressed as a percentage, equal to the average of the Delinquency Rates for each of the three (or one and two, in the case of the first and second Distribution Dates) immediately preceding months.

S&P : Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. or its successor in interest.

Scheduled Payment : The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan.

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

Securities Administrator : Wells Fargo Bank, N.A., a national banking association or any successor thereto or any successor hereunder.

Seller : Nomura Credit & Capital, Inc., a Delaware corporation, and its successors and assigns, in its capacity as seller of the Mortgage Loans to the Depositor.

Senior Certificates : The Class A and Class A-IO Certificates.

Senior Enhancement Percentage : For any Distribution Date, the fraction, expressed as a percentage, the numerator of which is the sum of the aggregate Certificate Principal Balance of the Subordinate Certificates and the Overcollateralization Amount (which, for purposes of this definition only, shall not be less than zero), in each case prior to giving effect to payments on such Distribution Date (assuming no Trigger Event is in effect), and the denominator of which is the Aggregate Loan Balance for such Distribution Date.

Servicer : GMAC Mortgage Corporation or any successor thereto (including any Special Servicer) appointed hereunder in connection with the servicing and administration of the Mortgage Loans.

Servicer’s Assignee : As defined in Section 5.01(b)(ii).

Servicer Default : As defined in Section 8.01.

Servicer Prepayment Charge Payment Amount : The amount payable by the Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01.

Servicing Advances : All customary, reasonable and necessary “out of pocket” costs and expenses (including reasonable legal fees) incurred in the performance by the Servicer of its servicing obligations hereunder, including, but not limited to, the cost of (i) the preservation, restoration, inspection, valuation and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, and including any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being registered in the MERS® System, (iii) the management and liquidation of any REO Property (including, without limitation, realtor’s commissions), (iv) compliance with any obligations under Section 3.07 hereof to cause insurance to be maintained and (v) payment of taxes.

Servicing Fee : As to each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period or, in the event of any payment of interest that accompanies a Principal Prepayment in full during the related Due Period made by the Mortgagor immediately prior to such prepayment, interest at the Servicing Fee Rate on the same Stated Principal Balance of such Mortgage Loan used to calculate the payment of interest on such Mortgage Loan.

Servicing Fee Rate : 0.50% per annum.

Significant Net Recoveries : With respect to a defaulted Mortgage Loan for which a broker’s price opinion is obtained pursuant to Section 3.09(a)(11), a determination by the Servicer that either (A) the potential Net Recoveries are anticipated to be greater than or equal to the sum of (i) the total indebtedness of the senior lien on the related Mortgaged Property and (ii) $10,000 (after anticipated expenses and attorneys’ fees) or (B) the related Mortgagor has shown a willingness and ability to pay over the previous six months.

Special Servicer : Any special servicer appointed by the Majority Class X-2 Certificateholder pursuant to Section 3.24 hereof meeting the requirements for a Successor Servicer pursuant to Section 8.02 hereof.

Special Serviced Mortgage Loan : The Mortgage Loans for which a Special Servicer acts as special servicer pursuant to Section 3.24 hereof.

Special Servicing : With regard to any Charged Off Loans, the servicing of such Charged Off Loans using specialized collection procedures (including foreclosure, if appropriate) to maximize recoveries.

Startup Day : The Startup Day for each REMIC formed hereunder shall be the Closing Date.

Stated Principal Balance : With respect to any Mortgage Loan or related REO Property and any Distribution Date, the Cut-off Date Principal Balance thereof minus the sum of (i) the principal portion of the Scheduled Payments due with respect to such Mortgage Loan during each Due Period ending prior to such Distribution Date (and irrespective of any delinquency in their payment), (ii) all Principal Prepayments with respect to such Mortgage Loan received prior to or during the related Prepayment Period, and all Liquidation Proceeds to the extent applied by the Servicer as recoveries of principal in accordance with Section 3.09 of this Agreement with respect to such Mortgage Loan, that were received by the Servicer as of the close of business on the last day of the Prepayment Period related to such Distribution Date and (iii) any Realized Losses on such Mortgage Loan incurred during the related Prepayment Period. The Stated Principal Balance of a Liquidated Loan equals zero.

Stepdown Date : The date occurring on the earlier of (a) the later of (x) the Distribution Date in October 2008 and (y) the first Distribution Date on which the Senior Enhancement Percentage (calculated for this purpose after giving effect to payments or other recoveries in respect of the Mortgage Loans during the related Due Period but before giving effect to payments on the Certificates on such Distribution Date) is greater than or equal to 56.00% or (b) the date on which the aggregate Certificate Principal Balance of the Class A Certificates is reduced to zero.

Subordinate Certificates : The Class M-1, Class M-2, Class B-1, Class B-2, Class B-3, Class B-4-IO and Class B-4-PO Certificates.

Subsequent Recoveries : With respect to each Mortgage Loan, the amount recovered by the Servicer (net of reimbursable expenses) with respect to a defaulted Mortgage Loan with respect to which a Realized Loss was incurred, after the liquidation or disposition of such Mortgage Loan.

Subservicing Agreement : Any agreement entered into between the Servicer and a subservicer with respect to the subservicing of any Mortgage Loan subject to this Agreement by such subservicer.

Subsidiary REMIC : As specified in the Preliminary Statement.

Substitution Adjustment Amount : The meaning ascribed to such term pursuant to Section 2.03(d).

Successor Master Servicer : The Trustee or any successor to the Master Servicer appointed pursuant to Section 8.04 after the occurrence of a Master Servicer Default or upon the resignation of the Master Servicer pursuant to this Agreement.

Successor Servicer : The Master Servicer or any successor to the Servicer appointed pursuant to Section 8.02 after the occurrence of a Servicer Default or upon the resignation of the Servicer pursuant to this Agreement.

Targeted Overcollateralization Amount : For any Distribution Date prior to the Stepdown Date, 2.85% of the Aggregate Loan Balance as of the Cut-off Date; with respect to any Distribution Date on or after the Stepdown Date and with respect to which a Trigger Event is not in effect, the greater of (a) 5.70% of the Aggregate Loan Balance for such Distribution Date, or (b) 0.50% of the Aggregate Loan Balance as of the Cut-off Date; with respect to any Distribution Date on or after the Stepdown Date with respect to which a Trigger Event is in effect and is continuing, the Targeted Overcollateralization Amount for the Distribution Date immediately preceding such Distribution Date.

Tax Matters Person : The person designated as “tax matters person” in the manner provided under Treasury regulation § 1.860F-4(d) and temporary Treasury regulation § 301.6231(a)(7)-1T. The holder of the greatest Percentage Interest in a Class of Residual Certificates shall be the Tax Matters Person for the related REMIC. The Securities Administrator, or any successor thereto or assignee thereof shall serve as tax administrator hereunder and as agent for the related Tax Matters Person.

Termination Price : The price, calculated as set forth in Section 10.01, to be paid in connection with the purchase of the Mortgage Loans pursuant to Section 10.01.

Transfer Affidavit : As defined in Section 6.02(c).

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

Trigger Event : A Trigger Event will occur for any Distribution Date if either (i) the Rolling Three Month Delinquency Rate as of the last day of the related Due Period equals or exceeds 12% of the Senior Enhancement Percentage for such Distribution Date or (ii) the cumulative Realized Losses as a percentage of the original Aggregate Loan Balance on the Closing Date for such Distribution Date is greater than the percentage set forth in the following table:

Range of Distribution Dates	Percentage
October 2008 – September 2009	4.75%*
October 2009 – September 2010	7.35%*
October 2010 – September 2011	9.45%*
October 2011 and thereafter	10.00%

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

Trust Fund : The corpus of the trust created hereunder consisting of (i) the Mortgage Loans and all interest and principal received on or with respect thereto after the Cut-off Date, other than such amounts which were due on the Mortgage Loans on or before the Cut-off Date; (ii) the Custodial Account, the Distribution Account, the Interest Rate Cap Account, the Class P Certificate Account, the Basis Risk Reserve Fund and all amounts deposited therein pursuant to the applicable provisions of this Agreement; (iii) property which secured a Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure after the Cut-off Date; (iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement; (v) the rights of the Trustee under all insurance policies required to be maintained pursuant to this Agreement; (vi) the rights of the Trustee on behalf of the Trust Fund pursuant to the Interest Rate Cap Agreements and (vii) all proceeds of the conversion, voluntary or involuntary, of any of the foregoing.

Trustee : HSBC Bank USA, National Association, a national banking association, not in its individual capacity, but solely in its capacity as trustee for the benefit of the Certificateholders under this Agreement, and any successor thereto, and any corporation or national banking association resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee as may from time to time be serving as successor trustee hereunder.

U.S. Person : A “United States person” within the meaning of Section 7701(a)(30) of the Code.

Voting Rights : The portion of the voting rights of all the Certificates that is allocated to any Certificate for purposes of the voting provisions of this Agreement. At all times during the term of this Agreement, 97% of all Voting Rights shall be allocated among the LIBOR Certificates. The portion of such 97% Voting Rights allocated to the LIBOR and Class B-4-PO Certificates shall be based on the fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance then outstanding and the denominator of which is the Certificate Principal Balance of all such Classes then outstanding. The Class A-IO, Class B-4-IO and Class X-1 Certificates shall each be allocated 1% of the Voting Rights. Voting Rights shall be allocated among the Certificates within each such Class in accordance with their respective Percentage Interests. The Class P, Class X-2 and Class R Certificates shall have no voting rights.

Section 1.02

Interest Calculations.

Interest on the LIBOR Certificates shall be calculated on the basis of a 360-day year and the actual number of days elapsed. The calculation of all fees and interest on the Fixed Rate and Class X-1 Certificates shall be made on the basis of a 360-day year consisting of twelve 30-day months. All dollar amounts calculated hereunder shall be rounded to the nearest penny with one-half of one penny being rounded down. The Securities Administrator’s establishment of One-Month LIBOR and the applicable Pass-Through Rate for any Class of Certificates for any Distribution Date shall, in the absence of manifest error, be final and binding.

ARTICLE II

CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES

Section 2.01

Conveyance of Trust Fund.

The Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Depositor, without recourse, all the right, title and interest of the Seller in and to the assets in the Trust Fund.

The Seller has entered into this Agreement in consideration for the purchase of the Mortgage Loans by the Depositor and has agreed to take the actions specified herein.

The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the use and benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund. In addition, on or prior to the Closing Date, the Depositor shall direct the Trustee on behalf of the Trust Fund to enter into the Interest Rate Cap Agreements (and any related novation agreement) with the Interest Rate Cap Counterparty and the Depositor shall directly pay or cause to be paid on behalf of the Trust Fund the payments owed to the Interest Rate Cap Agreement Provider as of the Closing Date under the related Interest Rate Cap Agreement.

In connection with such sale, the Depositor has delivered to, and deposited with, the Trustee or a Custodian, as its agent, the following documents or instruments with respect to each Mortgage Loan so assigned: (i) the original Mortgage Note, including any riders thereto, endorsed without recourse to the order of “HSBC Bank USA, National Association, as Trustee for certificateholders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-S3” or in blank, and showing to the extent available to the Seller an unbroken chain of endorsements from the original payee thereof to the Person endorsing it to the Trustee or in blank, as applicable, (ii) the original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting the presence of the MIN and language indicating that such Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original is not available, a copy), with evidence of such recording indicated thereon (or if clause (x) in the proviso below applies, shall be in recordable form), (iii) unless the Mortgage Loan is a MOM Loan, the assignment (either an original or a copy, which may be in the form of a blanket assignment if permitted in the jurisdiction in which the Mortgaged Property is located) to the Trustee or in blank of the Mortgage with respect to each Mortgage Loan in the name of “HSBC Bank USA, National Association, as Trustee for certificateholders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-S3,” which shall have been recorded (or if clause (x) in the proviso below applies, shall be in recordable form) (iv) an original or a copy of all intervening assignments of the Mortgage, if any, to the extent available to the Seller, with evidence of recording thereon, (v) the original policy of title insurance or mortgagee’s certificate of title insurance or commitment or binder for title insurance, if available, or a copy thereof, or, in the event that such original title insurance policy is unavailable, a photocopy thereof, or in lieu thereof, a current lien search on the related Mortgaged Property and (vi) originals or copies of all available assumption, modification or substitution agreements, if any; provided, however, that in lieu of the foregoing, the Seller may deliver the following documents, under the circumstances set forth below: (x) if any Mortgage, assignment thereof to the Trustee or intervening assignments thereof have been delivered or are being delivered to recording offices for recording and have not been returned in time to permit their delivery as specified above, the Depositor may deliver a true copy thereof with a certification by the Seller or the title company issuing the commitment for title insurance, on the face of such copy, substantially as follows: “Certified to be a true and correct copy of the original, which has been transmitted for recording”; and (y) in lieu of the Mortgage Notes relating to the Mortgage Loans identified in the list set forth in Exhibit J, the Depositor may deliver a lost note affidavit and indemnity and a copy of the original note, if available; and provided, further, that in the case of Mortgage Loans which have been prepaid in full after the Cut-Off Date and prior to the Closing Date, the Depositor, in lieu of delivering the above documents, may deliver to the Trustee a certification of a Authorized Servicer Representative to such effect and in such case shall deposit all amounts paid in respect of such Mortgage Loans, in the Distribution Account on the Closing Date. In the case of the documents referred to in clause (x) related above, the Depositor shall deliver such documents to the Trustee promptly after they are received. The Seller shall cause, at its expense, the Mortgage and intervening assignments, if any, and to the extent required in accordance with the foregoing, the assignment of the Mortgage to the Trustee to be submitted for recording promptly after the Closing Date; provided that the Seller need not cause to be recorded any assignment (a) in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller to the Trustee and the Rating Agencies, the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan or (b) if MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage as mortgagee of record solely as nominee for Seller and its successors and assigns. In the event that the Seller or the Depositor gives written notice to the Trustee that a court has recharacterized the sale of the Mortgage Loans as a financing, the Seller shall submit or cause to be submitted for recording as specified above or, should the Seller fail to perform such obligations within 30 days, the Trustee shall cause each such previously unrecorded assignment to be submitted for recording as specified above (unless, as specified above, such recording is not necessary) at the expense of the Trust pursuant to Section 9.05. In the event a Mortgage File is released to the Servicer as a result of such Person having completed a Request for Release, the Trustee shall, if not so completed, complete the assignment of the related Mortgage in the manner specified in clause (iii) above.

In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Seller further agrees that it will cause, at the Seller’s own expense, within 30 days after the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Seller to the Depositor and by the Depositor to the Trustee in accordance with this Agreement for the benefit of the related Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in the field which identifies the specific Trustee and (b) the code in the field “Pool Field” which identifies the series of the Certificates issued in connection with such Mortgage Loans. The Seller further agrees that it will not, and will not permit the Servicer or the Master Servicer to alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.

Section 2.02

Acceptance of the Mortgage Loans.

(a)

Based on the Initial Certifications received by it from the Custodians, the Trustee acknowledges receipt of, subject to the further review and exceptions reported by the Custodians pursuant to the procedures described below, the documents (or certified copies thereof) delivered to the Trustee or a Custodian on its behalf pursuant to Section 2.01 and declares that it holds and will continue to hold directly or through a custodian those documents and any amendments, replacements or supplements thereto and all other assets of the Trust Fund delivered to it in trust for the use and benefit of all present and future Holders of the Certificates. On the Closing Date, each Custodian on the Trustee’s behalf will deliver an Initial Certification in the form annexed hereto as Exhibit C-1, confirming whether or not it has received the Mortgage File for each Mortgage Loan, but without review of such Mortgage File, except to the extent necessary to confirm whether such Mortgage File contains the original Mortgage Note or a lost note affidavit and indemnity in lieu thereof. No later than 90 days after the Closing Date, each Custodian on the Trustee’s behalf shall, for the benefit of the Certificateholders, review each Mortgage File delivered to it and execute and deliver to the Seller and the Trustee an Interim Certification substantially in the form annexed hereto as Exhibit C-2. In conducting such review, each Custodian on the Trustee’s behalf will ascertain whether all required documents have been executed and received and whether those documents relate, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in Exhibit B to this Agreement, as supplemented (provided, however, that with respect to those documents described in subclauses (iv) and (vi) of Section 2.01, such obligations shall extend only to documents actually delivered pursuant to such subclauses). In performing any such review, each Custodian may conclusively rely on the purported due execution and genuineness of any such document and on the purported genuineness of any signature thereon. If a Custodian finds any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B, determined on the basis of the Mortgagor’s name, the original principal balance and the Mortgage Loan number, or to appear to be defective on its face, such Custodian shall include such information in the exception report attached to the Interim Certification. The Seller shall correct or cure any such defect or, if prior to the end of the second anniversary of the Closing Date, the Seller may substitute for the related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be accomplished in the manner and subject to the conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that such defect does not materially or adversely affect the interests of the Certificateholders in such Mortgage Loan within 60 days from the date of notice from the Trustee of the defect and if the Seller fails to correct or cure the defect or deliver such opinion within such period, the Seller will, subject to Section 2.03, within 90 days from the notification of the Trustee purchase such Mortgage Loan at the Purchase Price; provided, however, that if such defect relates solely to the inability of the Seller to deliver the Mortgage, assignment thereof to the Trustee, or intervening assignments thereof with evidence of recording thereon because such documents have been submitted for recording and have not been returned by the applicable jurisdiction, the Seller shall not be required to purchase such Mortgage Loan if the Seller delivers such documents promptly upon receipt, but in no event later than 360 days after the Closing Date.

(b)

No later than 180 days after the Closing Date, each Custodian on the Trustee’s behalf will review, for the benefit of the Certificateholders, the Mortgage Files and will execute and deliver or cause to be executed and delivered to the Seller and the Trustee, a Final Certification substantially in the form annexed hereto as Exhibit C-3. In conducting such review, each Custodian on the Trustee’s behalf will ascertain whether each document required to be recorded has been returned from the recording office with evidence of recording thereon and such Custodian on the Trustee’s behalf has received either an original or a copy thereof, as required in Section 2.01 (provided, however, that with respect to those documents described in subclauses (iv) and (vi) of Section 2.01, such obligations shall extend only to documents actually delivered pursuant to such subclauses). If a Custodian finds any document with respect to a Mortgage Loan has not been received, or to be unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in Exhibit B or to appear defective on its face, such Custodian shall note such defect in the exception report attached to the Final Certification and the Trustee shall promptly notify the Seller. The Seller shall correct or cure any such defect or, if prior to the end of the second anniversary of the Closing Date, the Seller may substitute for the related Mortgage Loan a Replacement Mortgage Loan, which substitution shall be accomplished in the manner and subject to the conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion of Counsel to the effect that such defect does not materially or adversely affect the interests of Certificateholders in such Mortgage Loan within 60 days from the date of notice from the Trustee and if the Seller is unable within such period to correct or cure such defect, or to substitute the related Mortgage Loan with a Replacement Mortgage Loan or to deliver such opinion, the Seller shall, subject to Section 2.03, within 90 days from the notification of the Trustee, purchase such Mortgage Loan at the Purchase Price; provided, however, that if such defect relates solely to the inability of the Seller to deliver the Mortgage, assignment thereof to the Trustee or intervening assignments thereof with evidence of recording thereon, because such documents have not been returned by the applicable jurisdiction, the Seller shall not be required to purchase such Mortgage Loan, if the Seller delivers such documents promptly upon receipt, but in no event later than 360 days after the Closing Date.

(c)

In the event that a Mortgage Loan is purchased by the Seller in accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller shall remit the applicable Purchase Price to the Servicer for deposit in the Custodial Account and shall provide written notice to the Securities Administrator and the Trustee detailing the components of the Purchase Price, signed by an authorized officer whose name and facsimile signature appear on an Officer’s Certificate on file with the Trustee. Upon deposit of the Purchase Price in the Custodial Account and upon receipt of a Request for Release with respect to such Mortgage Loan, the Trustee shall cause the related Custodian to release to the Seller the related Mortgage File and the Trustee shall execute and deliver all instruments of transfer or assignment, without recourse, furnished to it by the Seller, as are necessary to vest in the Seller title to and rights under the Mortgage Loan. Such purchase shall be deemed to have occurred on the date on which the deposit into the Custodial Account was made. The Trustee shall promptly notify the Rating Agencies of such repurchase. The obligation of the Seller to cure, repurchase or substitute for any Mortgage Loan as to which a defect in a constituent document exists shall be the sole remedies respecting such defect available to the Certificateholders or to the Trustee on their behalf. The Seller shall promptly reimburse the Trustee for any expenses incurred by the Trustee in respect of enforcing the remedies for such breach.

(d)

The Seller shall deliver to the Trustee, or a Custodian on its behalf, and Trustee agrees to accept the Mortgage Note and other documents constituting the Mortgage File with respect to any Replacement Mortgage Loan, which the related Custodian will review as provided in subsections 2.02(a) and 2.02(b), provided, that the Closing Date referred to therein shall instead be the date of delivery of the Mortgage File with respect to each Replacement Mortgage Loan.

Section 2.03

Representations, Warranties and Covenants of the Servicer, the Master Servicer and the Seller.

(a)

The Servicer hereby represents and warrants to, and covenants with, the Seller, the Depositor, the Master Servicer, the Securities Administrator and the Trustee as follows, as of the Closing Date:

(i)

It is duly organized and is validly existing and in good standing under the laws of the Commonwealth of Pennsylvania and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by it 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 service the Mortgage Loans in accordance with the terms of this Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(ii)

It has the full corporate power and authority to service each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary corporate action on its part the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and further subject to public policy with respect to indemnity and contribution under applicable securities law.

(iii)

The execution and delivery of this Agreement by it, the servicing of the Mortgage Loans by it under this Agreement, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in its ordinary course of business and will not (A) result in a material breach of any term or provision of its charter or by-laws or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which it is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to it of any court, regulatory body, administrative agency or governmental body having jurisdiction over it; and it is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair its ability to perform or meet any of its obligations under this Agreement.

(iv)

It is an approved servicer of conventional mortgage loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act.

(v)

No litigation is pending or, to the best of its knowledge, threatened in writing, against it that would materially and adversely affect the execution, delivery or enforceability of this Agreement or its ability to service the Mortgage Loans or to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(vi)

No consent, approval, authorization or order of any court or governmental agency or body is required for its execution, delivery and performance of, or compliance with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, it has obtained the same.

(vii)

The Servicer has accurately and fully reported, and will continue to accurately and fully report its borrower credit files to each of the credit repositories in a timely manner materially in accordance with the Fair Credit Reporting Act and its implementing legislation.

(viii)

The Servicer is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS.

(ix)

The Servicer will not waive any Prepayment Charge with respect to a Mortgage Loan unless it is waived in accordance with the standard set forth in Section 3.01.

If the covenant of the Servicer set forth in Section 2.03(a)(ix) above is breached by the Servicer, the Servicer will pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates by depositing such amount into the Custodial Account within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of such breach. Notwithstanding the foregoing, or anything to the contrary contained in this Agreement, the Servicer shall have no liability for a waiver of any Prepayment Charge in the event that the Servicer’s determination to make such a waiver was made by the Servicer in reliance on information properly received by the Servicer from any Person in accordance with the terms of this Agreement.

(b)

The Seller hereby represents and warrants to and covenants with, the Depositor, the Servicer, the Master Servicer, the Securities Administrator and the Trustee as follows, as of the Closing Date:

(i)

The Seller is duly organized, validly existing and in good standing 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 Seller 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, to sell the Mortgage Loans in accordance with the terms of this Agreement and to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(ii)

The Seller has the full corporate power and authority to sell each Mortgage Loan, and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement and has duly authorized by all necessary corporate action on the part of the Seller the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except that (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and further subject to public policy with respect to indemnity and contribution under applicable securities law.

(iii)

The execution and delivery of this Agreement by the Seller, the sale of the Mortgage Loans by the Seller under this Agreement, the consummation of any other of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Seller and will not (A) result in a material breach of any term or provision of the charter or by-laws of the Seller or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Seller is a party or by which it may be bound, or (C) constitute a material violation of any statute, order or regulation applicable to the Seller of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Seller; and the Seller is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair the Seller’s ability to perform or meet any of its obligations under this Agreement.

(iv)

The Seller is an approved seller of conventional mortgage loans for Fannie Mae or Freddie Mac and is a mortgagee approved by the Secretary of Housing and Urban Development pursuant to sections 203 and 211 of the National Housing Act.

(v)

No litigation is pending or, to the best of the Seller’s knowledge, threatened, against the Seller that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Seller to sell the Mortgage Loans or to perform any of its other obligations under this Agreement in accordance with the terms hereof.

(vi)

No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Seller of, or compliance by the Seller with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, the Seller has obtained the same.

(vii)

The representations and warranties set forth in Section 8 of the Mortgage Loan Purchase Agreement are true and correct as of the Closing Date.

(viii)

No Mortgage Loan is subject to the Home Ownership and Equity Protection Act of 1994 or any comparable law and no Mortgage Loan is classified and/or defined as a “high cost”, “covered”, “high risk home” or “predatory” loan under any other state, federal or local law or regulation or ordinance (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).

(ix)

No loan is a High Cost Loan or Covered Loan, as applicable (as such terms are defined in Appendix E of the Standard & Poor’s Glossary For File Format For LEVELS® Version 5.6 Revised (attached hereto as Exhibit L) and no Mortgage Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.

(x)

Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, fair housing, predatory, abusive lending or disclosure laws applicable to the origination and servicing of the Mortgage Loans have been complied with in all material respects.

(c)

Upon discovery by any of the parties hereto of a breach of a representation or warranty set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the Mortgage Loan Purchase Agreement that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, the party discovering such breach shall give prompt written notice thereof to the other parties. The Seller hereby covenants with respect to the representations and warranties set forth in Section 2.03(b)(viii), (ix) and (x) and Section 8 of the Mortgage Loan Purchase Agreement, that within 90 days of the discovery of a breach of any representation or warranty set forth therein that materially and adversely affects the interests of the Certificateholders in any Mortgage Loan, it shall cure such breach in all material respects and, if such breach is not so cured, (i) prior to the second anniversary of the Closing Date, remove such Mortgage Loan (a “Deleted Mortgage Loan”) from the Trust Fund and substitute in its place a Replacement Mortgage Loan, in the manner and subject to the conditions set forth in this Section; or (ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner set forth below; provided that any such substitution pursuant to (i) above or repurchase pursuant to (ii) above shall not be effected prior to the delivery to the Trustee of an Opinion of Counsel if required by Section 2.05 and any such substitution pursuant to (i) above shall not be effected prior to the additional delivery to the Trustee of a Request for Release. The Seller shall promptly reimburse the Trustee for any expenses reasonably incurred by the Trustee in respect of enforcing the remedies for such breach. To enable the Servicer to amend the Mortgage Loan Schedule, the Seller shall, unless it cures such breach in a timely fashion pursuant to this Section 2.03, promptly notify the Trustee whether it intends either to repurchase, or to substitute for, the Mortgage Loan affected by such breach. With respect to the representations and warranties in Section 8 of the Mortgage Loan Purchase Agreement that are made to the best of the Seller’s knowledge, if it is discovered by any of the Depositor, the Seller, the Securities Administrator or the Trustee that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan, notwithstanding the Seller’s lack of knowledge with respect to the substance of such representation or warranty, the Seller shall nevertheless be required to cure, substitute for or repurchase the affected Mortgage Loan in accordance with the foregoing.

With respect to any Replacement Mortgage Loan or Loans, the Seller shall deliver to the related Custodian on behalf of the Trustee for the benefit of the related Certificateholders such documents and agreements as are required by Section 2.01. No substitution will be made in any calendar month after the Determination Date for such month. Scheduled Payments due with respect to Replacement Mortgage Loans in the Due Period related to the Distribution Date on which such proceeds are to be distributed shall not be part of the Trust Fund and will be retained by the Seller. For the month of substitution, distributions to Certificateholders will include the Scheduled Payment due on any Deleted Mortgage Loan for the related Due Period and thereafter the Seller shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan. The Servicer shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the removal of such Deleted Mortgage Loan and the substitution of the Replacement Mortgage Loan or Loans and shall deliver the amended Mortgage Loan Schedule to the Trustee, the Securities Administrator and the Master Servicer. Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Seller shall be deemed to have made with respect to such Replacement Mortgage Loan or Loans, as of the date of substitution, the representations and warranties set forth in Section 8 of the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon any such substitution and the deposit into the Custodial Account of the amount required to be deposited therein in connection with such substitution as described in the following paragraph, receipt by the Trustee of an Officer’s Certificate executed by the Seller stating that such substitution amounts have been so deposited, and receipt by the Trustee, or a Custodian on its behalf, of a Request for Release for such Mortgage Loan, the Trustee, or such Custodian on its behalf, shall release to the Seller the Mortgage File relating to such Deleted Mortgage Loan and held for the benefit of the related Certificateholders and shall execute and deliver at the Seller’s direction such instruments of transfer or assignment as have been prepared by the Seller, in each case without recourse, as shall be necessary to vest in the Seller, or its respective designee, title to the Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03. Neither, the Trustee nor the related Custodian shall have any further responsibility with regard to such Mortgage File.

For any month in which the Seller substitutes one or more Replacement Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer and the Seller will determine the amount (if any) by which the aggregate principal balance of all the Replacement Mortgage Loans as of the date of substitution is less than the Stated Principal Balance (after application of the principal portion of the Scheduled Payment due in the month of substitution) of such Deleted Mortgage Loan. An amount equal to the aggregate of such deficiencies, described in the preceding sentence for any Distribution Date (such amount, the “Substitution Adjustment Amount”) shall be deposited into the Custodial Account, by the Seller delivering such Replacement Mortgage Loan on or before the Determination Date for the Distribution Date in the month following the month during which the related Mortgage Loan became required to be purchased or replaced hereunder.

In the event that the Seller shall have repurchased a Mortgage Loan, the Purchase Price therefor shall be deposited into the Custodial Account maintained by the Servicer, on or before the Determination Date for the Distribution Date in the month following the month during which the Seller became obligated to repurchase or replace such Mortgage Loan and upon such deposit of the Purchase Price, the delivery of an Opinion of Counsel if required by Section 2.05 and the receipt of a Request for Release, the Trustee, or a Custodian on its behalf, shall release the related Mortgage File held for the benefit of the related Certificateholders to the Seller, and the Trustee shall execute and deliver at such Person’s direction the related instruments of transfer or assignment prepared by the Seller, in each case without recourse, as shall be necessary to transfer title from the Trustee for the benefit of the Certificateholders and transfer the Trustee’s interest to the Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is understood and agreed that the obligation under this Agreement of the Seller to cure, repurchase or replace any Mortgage Loan as to which a breach has occurred and is continuing shall constitute the sole remedies against the Seller respecting such breach available to Certificateholders, the Depositor or the Trustee.

(d)

The Master Servicer hereby represents, warrants and covenants with the Depositor, the Seller and the Trustee as follows, as of the Closing Date:

(i)

The Master Servicer is a national banking association duly formed, validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer;

(ii)

The Master 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 Master 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 other parties hereto, constitutes a legal, valid and binding obligation of the Master 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 Master Servicer, the consummation by the Master 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 Master Servicer and will not (A) result in a breach of any term or provision of charter and by-laws of the Master 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 Master Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master 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 Master Servicer’s knowledge, would in the future materially and adversely affect, (x) the ability of the Master Servicer to perform its obligations under this Agreement or (y) the business, operations, financial condition, properties or assets of the Master Servicer taken as a whole;

(iv)

The Master 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;

(v)

No litigation is pending against the Master Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Master Servicer to perform any of its other obligations hereunder in accordance with the terms hereof,

(vi)

There are no actions or proceedings against, or investigations known to it of, the Master 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 Agreement or (C) that might prohibit or materially and adversely affect the performance by the Master Servicer of its obligations under, or validity or enforceability of, this Agreement; and

(vii)

No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Master Servicer of, or compliance by the Master 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.

(e)

The representations and warranties set forth in Section 2.03 shall survive delivery of the respective Mortgage Loans and Mortgage Files to the Trustee or a Custodian for the benefit of the Certificateholders.

Section 2.04

Representations and Warranties of the Depositor.

The Depositor hereby represents and warrants to, and covenants, with the Servicer, the Seller, the Master Servicer, the Securities Administrator and the Trustee as follows, as of the date hereof and as of the Closing Date:

(i)

The Depositor is duly organized and is validly existing as a corporation in good standing under the laws of the State of Delaware and has full power and authority (corporate and other) necessary to own or hold its properties and to conduct its business as now conducted by it and to enter into and perform its obligations under this Agreement.

(ii)

The Depositor has the full corporate power and authority to execute, deliver and perform, and to enter into and consummate the transactions contemplated by, this Agreement and has duly authorized, by all necessary corporate action on its part, the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, subject, as to enforceability, to (i) bankruptcy, insolvency, moratorium receivership and other similar laws relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought and further subject to public policy with respect to indemnity and contribution under applicable securities law.

(iii)

The execution and delivery of this Agreement by the Depositor, the consummation of the transactions contemplated by this Agreement, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Depositor and will not (A) result in a material breach of any term or provision of the charter or by-laws of the Depositor or (B) materially conflict with, result in a material breach, violation or acceleration of, or result in a material default under, the terms of any other material agreement or instrument to which the Depositor is a party or by which it may be bound or (C) constitute a material violation of any statute, order or regulation applicable to the Depositor of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Depositor; and the Depositor is not in breach or violation of any material indenture or other material agreement or instrument, or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it which breach or violation may materially impair the Depositor’s ability to perform or meet any of its obligations under this Agreement.

(iv)

No litigation is pending, or, to the best of the Depositor’s knowledge, threatened, against the Depositor that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Depositor to perform its obligations under this Agreement in accordance with the terms hereof.

(v)

No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Depositor of, or compliance by the Depositor with, this Agreement or the consummation of the transactions contemplated hereby, or if any such consent, approval, authorization or order is required, the Depositor has obtained the same.

The Depositor hereby represents and warrants to the Trustee as of the Closing Date, following the transfer of the Mortgage Loans to it by the Seller, the Depositor had good title to the Mortgage Loans and the related Mortgage Notes were subject to no offsets, claims, defenses or counterclaims.

It is understood and agreed that the representations and warranties set forth in this Section 2.04 shall survive delivery of the Mortgage Files to the Trustee or a Custodian for the benefit of the Certificateholders. Upon discovery by the Depositor, the Servicer, the Master Servicer, the Securities Administrator or the Trustee of a breach of such representations and warranties, the party discovering such breach shall give prompt written notice to the others and to each Rating Agency.

Section 2.05

Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases.

(a)

Notwithstanding any contrary provision of this Agreement, with respect to any Mortgage Loan that is not in default or as to which default is not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03 shall be made unless the Seller delivers to the Trustee and the Securities Administrator an Opinion of Counsel, addressed to the Trustee and the Securities Administrator, to the effect that such repurchase or substitution would not (i) result in the imposition of the tax on “prohibited transactions” of any REMIC formed hereby or contributions after the Closing Date, as defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause any REMIC to fail to qualify as a REMIC at any time that any Certificates are outstanding. Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to this paragraph shall be repurchased or the substitution therefor shall occur (subject to compliance with Sections 2.02 or 2.03) upon the earlier of (a) the occurrence of a default or imminent default with respect to such Mortgage Loan and (b) receipt by the Trustee and the Securities Administrator of an Opinion of Counsel to the effect that such repurchase or substitution, as applicable, will not result in the events described in clause (i) or clause (ii) of the preceding sentence.

(b)

Upon discovery by the Depositor or the Seller 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 promptly (and in any event within 5 Business Days of discovery) give written notice thereof to the other parties and the Trustee. In connection therewith, the Seller, at the its option, shall either (i) substitute, if the conditions in Section 2.03(c) with respect to substitutions are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days of such discovery in the same manner as it would a Mortgage Loan for a breach of representation or warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty contained in Section 2.03.

Section 2.06

REMIC Matters.

The Preliminary Statement sets forth the designations and “latest possible maturity date” for federal income tax purposes of all interests in each REMIC created hereby. The “Startup Day” for each REMIC for purposes of the REMIC Provisions shall be the Closing Date. The “tax matters person” with respect to each of the Subsidiary REMIC, Intermediate REMIC 1, Intermediate REMIC 2 and the Master REMIC hereunder shall be the holder of the Class R Certificate. The Securities Administrator on behalf of the holders of the Class R Certificates shall act as agent for the “tax matters person.” By its acceptance of a Class R Certificate, each holder thereof shall have agreed to such appointment and shall have consented to the appointment of the Securities Administrator as its agent to act on behalf of each of the Subsidiary REMIC, Intermediate REMIC 1, Intermediate REMIC 2 and the Master REMIC pursuant to the specific duties outlined herein. Each REMIC’s fiscal year shall be the calendar year.

Section 2.07

Conveyance of Lower Tier REMIC Regular Interests and Acceptance Thereof; Issuance of Certificates.

(a)

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the regular interests in the Subsidiary REMIC, the regular interests in Intermediate REMIC 1 and the regular interests in Intermediate REMIC 2 for the benefit of the holders of the Certificates. The Trustee acknowledges receipt of the regular interests in the Subsidiary REMIC, the regular interests in Intermediate REMIC 1 and the regular interests in Intermediate REMIC 2 (all of which are uncertificated) and declares that it holds and will hold the same in trust for the exclusive use and ultimate benefit of the holders of the Certificates. The interests evidenced by the residual interest in the Master REMIC, together with the Class A-1, Class A-2, Class A-3, Class A-IO, Class M-1, Class M-2, Class B-1, Class B-2, Class B-3, Class B-4-IO, Class B-4-PO, Class P and Class X-1 Certificates constitute the entire beneficial ownership interest in the Master REMIC.

(b)

Concurrently with (i) the assignment and delivery to the Trustee of the Subsidiary REMIC, Intermediate REMIC 1 and Intermediate REMIC 2 (including the residual interests therein represented by the Class LT1-R Interest, Class LT2-R Interest and Class LT3-R Interest, respectively) and the acceptance by the Trustee thereof, pursuant to Section 2.01, Section 2.02 and this Section 2.07(i) and (ii) the assignment and delivery to the Trustee of the Master REMIC (including the residual interest therein) and the acceptance by the Trustee thereof, pursuant to this Section 2.07(i), the Securities Administrator, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, on behalf of the Trust, authenticated and delivered to or upon the order of the Depositor, the Class R Certificates in authorized denominations evidencing the residual interest in each of the Subsidiary REMIC, Intermediate REMIC 1, Intermediate REMIC 2 and the Master REMIC.

Section 2.08

Establishment of Trust.

The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust to be known, for convenience, as “Nomura Asset Acceptance Corporation, Alternative Loan Trust, Series 2005-S3” and does hereby appoint HSBC Bank USA, National Association, as Trustee in accordance with the provisions of this Agreement.

ARTICLE III

ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

Section 3.01

The Servicer to Act as Servicer.

The Servicer shall service and administer the Mortgage Loans (other than any Mortgage Loans transferred to a Special Servicer pursuant to Section 3.24 hereof) on behalf of the Trust and in the best interest 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 Mortgage Loans and to the extent consistent with such terms and in accordance with and exercising the same care in performing those practices that the Servicer customarily employs and exercises in servicing and administering mortgage loans for its own account (including, compliance with all applicable federal, state and local laws).

To the extent consistent with the foregoing, the Servicer shall seek the timely and complete recovery of principal and interest on the Mortgage Notes related to the Mortgage Loans and shall waive a Prepayment Charge only under the following circumstances: (i) such waiver is standard and customary in servicing similar mortgage loans and (ii) either (A) such waiver is related to a default or reasonably foreseeable default and would, in the reasonable judgment of the Servicer, maximize recovery of total proceeds taking into account the value of such Prepayment Charge and the related Mortgage Loan and, if such waiver is made in connection with a refinancing of the related Mortgage Loan, such refinancing is related to a default or a reasonably foreseeable default or (B) such waiver is made in connection with a refinancing of the related Mortgage Loan unrelated to a default or a reasonably foreseeable default where (x) the related Mortgagor has stated to the Servicer an intention to refinance the related Mortgage Loan and (y) the Servicer has concluded in its reasonable judgment that the waiver of such Prepayment Charge would induce such Mortgagor to refinance with the Servicer or (iii) the Servicer reasonably believes such Prepayment Charge is unenforceable in accordance with applicable law or the collection of such related Prepayment Charge would otherwise violate applicable law. If a Prepayment Charge is waived as permitted by meeting both of the standards described in clauses (i) and (ii)(B) above, then the Servicer is required to pay the amount of such waived Prepayment Charge (the “Servicer Prepayment Charge Payment Amount”), for the benefit of the Holders of the Class P Certificates, by depositing such amount into the Custodial Account within 90 days of notice or discovery of such waiver meeting the standard set forth in both clauses (i) and (ii)(B) above; provided, however, that the Servicer shall not waive more than 5% of the Prepayment Charges (by number of Prepayment Charges) set forth on the Prepayment Charge Schedule in accordance with clauses (i) and (ii)(B) above. Notwithstanding any other provisions of this Agreement, any payments made by the Servicer in respect of any waived Prepayment Charges pursuant to clauses (i) and (ii)(B) above and the preceding sentence shall be deemed to be paid outside of the Trust Fund.

Subject only to the above-described applicable servicing standards (the “Accepted Servicing Practices”) and the terms of this Agreement and of the respective Mortgage Loans, the Servicer shall have full power and authority, acting alone and/or through subservicers as provided in Section 3.03, to do or cause to be done any and all things that it may deem necessary or desirable in connection with such servicing and administration, including but not limited to, the power and authority, subject to the terms hereof (i) to execute and deliver, on behalf of the Certificateholders and the Trustee, customary consents or waivers and other instruments and documents, (ii) to consent to transfers of any related Mortgaged Property and assumptions of the Mortgage Notes and related Mortgages (but only in the manner provided herein), (iii) to collect any Insurance Proceeds and other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan.

Without limiting the generality of the foregoing, the Servicer, in its own name or in the name of the Trust, the Depositor or the Trustee, is hereby authorized and empowered by the Trust, the Depositor and the Trustee, when the Servicer believes it appropriate in its reasonable judgment, to execute and deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any of them, 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 with respect to the related Mortgaged Properties held for the benefit of the Certificateholders. The Servicer shall prepare and deliver to the Depositor and/or the Trustee such documents requiring execution and delivery by any or all of them as are necessary or appropriate to enable the Servicer to service and administer the Mortgage Loans. Upon receipt of such documents, the Depositor and/or the Trustee shall execute such documents and deliver them to the Servicer. In addition, the Trustee shall execute, at the written request of the Servicer, and furnish to the Servicer any special or limited powers of attorney agreeable to the Trustee and its counsel for each county in which a Mortgaged Property is located and other documents necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder, provided such limited powers of attorney or other documents shall be prepared by the Servicer and submitted to the Trustee for review prior to execution.

In accordance with the standards of the first paragraph of this Section 3.01, the Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the payment of taxes and assessments on the Mortgaged Properties relating to the Mortgage Loans in order to preserve the lien on the Mortgaged Property, which advances shall be reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 4.04, and further as provided in Section 4.02. All costs incurred by the Servicer, if any, in effecting the payments of such taxes and assessments on the related Mortgaged Properties and related insurance premiums shall not, for the purpose of calculating monthly distributions to the Certificateholders, be added to the Stated Principal Balance under the related Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so permit.

Section 3.02

Due-on-Sale Clauses; Assumption Agreements.

(a)

Except as otherwise provided in this Section 3.02, when any Mortgaged Property has been or is about to be conveyed by the Mortgagor, the Servicer shall to the extent that it has knowledge of such conveyance, enforce any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent permitted under applicable law and governmental regulations, but only to the extent that such enforcement will not adversely affect or jeopardize coverage under any Required Insurance Policy. Notwithstanding the foregoing, the Servicer shall not be required to exercise such rights with respect to a Mortgage Loan if the Person to whom the related Mortgaged Property has been conveyed or is proposed to be conveyed satisfies the terms and conditions contained in the Mortgage Note and Mortgage related thereto and the consent of the mortgagee under such Mortgage Note or Mortgage is not otherwise so required under such Mortgage Note or Mortgage as a condition to such transfer. In the event that the Servicer is prohibited by law from enforcing any such due-on-sale clause, or if coverage under any Required Insurance Policy would be adversely affected, or if nonenforcement is otherwise permitted hereunder, the Servicer is authorized, subject to Section 3.02(b), to take or enter into an assumption and modification agreement from or with the person to whom such property has been or is about to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, unless prohibited by applicable state law, the Mortgagor remains liable thereon, provided that the related Mortgage Loan shall continue to be covered (if so covered before the Servicer enters such agreement) by the applicable Required Insurance Policies. The Servicer, subject to Section 3.02(b), is also authorized with the prior approval of the insurers under any Required Insurance Policies 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 Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the foregoing, the Servicer shall not be deemed to be in default under this Section 3.02(a) by reason of any transfer or assumption that the Servicer reasonably believes it is restricted by law from preventing.

(b)

Subject to the Servicer’s duty to enforce any due-on-sale clause to the extent set forth in Section 3.02(a), in any case in which a related Mortgaged Property has been conveyed to a Person by a Mortgagor, and such Person is to enter into an assumption agreement or modification agreement or supplement to the Mortgage Note or Mortgage that requires the signature of the Trustee, or if an instrument of release signed by the Trustee is required releasing the Mortgagor from liability on the related Mortgage Loan, the Servicer shall prepare and deliver or cause to be prepared and delivered to the Trustee for signature and shall direct, in writing, the Trustee to execute the assumption agreement with the Person to whom the Mortgaged Property is to be conveyed and such modification agreement or supplement to the Mortgage Note or Mortgage or other instruments as are reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage or otherwise to comply with any applicable laws regarding assumptions or the transfer of the Mortgaged Property to such Person. In connection with any such assumption, no material term of the Mortgage Note (including, but not limited to, the Mortgage Rate, the amount of the Scheduled Payment, the Index, Gross Margin, Periodic Rate Cap, Adjustment Date, Maximum Mortgage Interest Rate or Minimum Mortgage Interest Rate and any other term affecting the amount or timing of payment on the related Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the Mortgaged Property must be acceptable to the Servicer in accordance with the servicing standard set forth in Section 3.01. The Servicer shall notify the Trustee that any such substitution or assumption agreement has been completed by forwarding to the related Custodian the original of such substitution or assumption agreement, which in the case of the original 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. Any fee collected by the Servicer for entering into an assumption or substitution of liability agreement will be retained by the Servicer as additional servicing compensation.

Section 3.03

Subservicers.

The Servicer shall perform all of its servicing responsibilities hereunder or may cause a subservicer to perform any such servicing responsibilities on its behalf, but the use by the Servicer of a subservicer shall not release the Servicer from any of its obligations hereunder with respect to the related Mortgage Loans. The Servicer shall pay all fees of each of its subservicers from its own funds, and a subservicer’s fee shall not exceed the Servicing Fee payable to the Servicer hereunder.

At the cost and expense of the Servicer, without any right of reimbursement from the Custodial Account, the Servicer shall be entitled to terminate the rights and responsibilities of a subservicer and arrange for any servicing responsibilities to be performed by a successor subservicer; provided, however, that nothing contained herein shall be deemed to prevent or prohibit the Servicer, at its option, from electing to service the related Mortgage Loans itself. In the event that the Servicer’s responsibilities and duties under this Agreement are terminated pursuant to Section 8.03, the Servicer shall at its own cost and expense terminate the rights and responsibilities of each subservicer with respect to the Mortgage Loans effective as of the date of the Servicer’s termination. The Servicer shall pay all fees, expenses or penalties necessary in order to terminate the rights and responsibilities of each subservicer from the Servicer’s own funds without reimbursement from the Trust Fund.

Notwithstanding the foregoing, the Servicer shall not be relieved of its obligations hereunder with respect to the Mortgage Loans and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans. The Servicer shall be entitled to enter into an agreement with a subservicer for indemnification of the Servicer by the subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between such subservicer and the Servicer alone, and none of the Master Servicer, the Securities Administrator or the Trustee shall not have any obligations, duties or liabilities with respect to such subservicer including any obligation, duty or liability of the Master Servicer, the Securities Administrator or the Trustee to pay such subservicer’s fees and expenses or any differential in the amount of the servicing fee paid hereunder and the amount necessary to induce any successor servicer to act as successor servicer under this Agreement and the transactions provided for in this Agreement. For purposes of remittances to the Securities Administrator pursuant to this Agreement, the Servicer shall be deemed to have received a payment on a Mortgage Loan when a subservicer has received such payment.

Section 3.04

Documents, Records and Funds in Possession of the Servicer To Be Held for Trustee.

Notwithstanding any other provisions of this Agreement, the Servicer shall transmit to the Trustee, or a Custodian on its behalf, as required by this Agreement all documents and instruments in respect of a related Mortgage Loan coming into the possession of the Servicer from time to time and shall account fully to the Master Servicer for any funds received by the Servicer or that otherwise are collected by the Servicer as Liquidation Proceeds or Insurance Proceeds in respect of any such Mortgage Loan. All Mortgage Files and funds collected or held by, or under the control of, the Servicer in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds, including but not limited to, any funds on deposit in the Custodial Account, shall be held by the Servicer for and on behalf of the Trustee and shall be and remain the sole and exclusive property of the Trustee, subject to the applicable provisions of this Agreement. The Servicer also agrees that it shall not create, incur or subject any Mortgage File or any funds that are deposited in the Custodial Account, the Distribution Account or in any Escrow Account, or any funds that otherwise are or may become due or payable to the Trustee for the benefit of the Certificateholders, to any claim, lien, security interest, judgment, levy, writ of attachment or other encumbrance, or assert by legal action or otherwise any claim or right of set off against any Mortgage File or any funds collected on, or in connection with, a Mortgage Loan, except, however, that the Servicer shall be entitled to set off against and deduct from any such funds any amounts that are properly due and payable to the Servicer under this Agreement.

Section 3.05