POOLING AND SERVICING AGREEMENT

EXECUTION

 

 

HSI ASSET SECURITIZATION CORPORATION,
Depositor,

OPTION ONE MORTGAGE CORPORATION,
Mortgage Loan Originator and Servicer,

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

CLAYTON FIXED INCOME SERVICES INC.,

Credit Risk Manager

and

DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee

_______________________________________

POOLING AND SERVICING AGREEMENT

               Dated as of November 1, 2005              

HSI ASSET SECURITIZATION CORPORATION TRUST 2005-OPT1

MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-OPT1

 

 

TABLE OF CONTENTS

Page

ARTICLE I

 

DEFINITIONS

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS;

REPRESENTATIONS AND WARRANTIES

 

Section 2.01

Conveyance of Mortgage Loans

41

Section 2.02

Acceptance by the Trustee of the Mortgage Loans

45

Section 2.03

Representations, Warranties and Covenants of the

Servicer, Mortgage Loan Originator and the

Purchaser; Remedies for Breaches of Representations

and Warranties with Respect to the Mortgage Loans

46

Section 2.04

Execution and Delivery of Certificates

50

Section 2.05

REMIC Matters

50

Section 2.06

Representations and Warranties of the Depositor

50

 

ARTICLE III

ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS

 

Section 3.01

Servicer to Service Mortgage Loans

52

Section 3.02

Subservicing Agreements between the Servicer and Subservicers

53

Section 3.03

Successor Subservicers

54

Section 3.04

Liability of the Servicer

55

Section 3.05

No Contractual Relationship between Subservicers and

the Master Servicer

55

Section 3.06

Assumption or Termination of Subservicing Agreements by

Master Servicer

55

Section 3.07

Collection of Certain Mortgage Loan Payments

56

Section 3.08

Subservicing Accounts

58

Section 3.09

Collection of Taxes, Assessments and Similar Items; Escrow

Accounts

59

Section 3.10

Collection Account

60

Section 3.11

Withdrawals from the Collection Account

61

Section 3.12

Investment of Funds in the Collection Account, Escrow

Accounts and the Distribution Account

62

Section 3.13

Maintenance of Hazard Insurance and Errors and Omissions

and Fidelity Coverage

64

Section 3.14

Enforcement of Due-On-Sale Clauses; Assumption Agreements

65

Section 3.15

Realization upon Defaulted Mortgage Loans

66

Section 3.16

Release of Mortgage Files

67

Section 3.17

Title, Conservation and Disposition of REO Property

68

Section 3.18

Notification of Adjustments

70

Section 3.19

Access to Certain Documentation and Information

Regarding the Mortgage Loans

70

Section 3.20

Documents, Records and Funds in Possession of the

Servicer to Be Held for the Trustee

71

Section 3.21

Servicing Compensation

71

Section 3.22

Annual Statement as to Compliance

71

Section 3.23

Annual Independent Public Accountants’ Servicing

Statement; Financial Statements

72

Section 3.24

Back-up Certification

72

Section 3.25

Master Servicer to Act as Servicer

73

Section 3.26

Compensating Interest

73

Section 3.27

Credit Reporting; Gramm-Leach-Bliley Act

73

Section 3.28

Maintenance of the Bulk PMI Policy

74

 

ARTICLE IV

DISTRIBUTIONS AND
ADVANCES BY THE SERVICER

 

Section 4.01

Advances

74

Section 4.02

Priorities of Distribution

75

Section 4.03

Monthly Statements to Certificateholders

80

Section 4.04

Certain Matters Relating to the Determination of LIBOR

82

Section 4.05

Allocation of Applied Realized Loss Amounts

83

Section 4.06

Supplemental Interest Trust

83

Section 4.07

Rights of the Swap Counterparty.

84

Section 4.08

Termination Receipts.

84

 

ARTICLE V

THE CERTIFICATES

 

Section 5.01

The Certificates

85

Section 5.02

Certificate Register; Registration of Transfer and

Exchange of Certificates

86

Section 5.03

Mutilated, Destroyed, Lost or Stolen Certificates

92

Section 5.04

Persons Deemed Owners

93

Section 5.05

Access to List of Certificateholders’ Names and Addresses

93

Section 5.06

Maintenance of Office or Agency

93

 

ARTICLE VI

THE DEPOSITOR AND THE SERVICER

 

Section 6.01

Respective Liabilities of the Depositor and the Servicer

93

Section 6.02

Merger or Consolidation of the Depositor or the Servicer

93

Section 6.03

Limitation on Liability of the Depositor, the Servicer and Others.

94

Section 6.04

Limitation on Resignation of the Servicer.

94

Section 6.05

Additional Indemnification by the Servicer; Third Party Claims.

95

 

ARTICLE VII

DEFAULT

 

Section 7.01

Events of Default

95

Section 7.02

Master Servicer to Act; Appointment of Successor

97

Section 7.03

Notification to Certificateholders

99

 

ARTICLE VIII

CONCERNING THE TRUSTEE

 

Section 8.01

Duties of the Trustee

99

Section 8.02

Certain Matters Affecting the Trustee

100

Section 8.03

Trustee Not Liable for Certificates or Mortgage Loans

101

Section 8.04

Trustee May Own Certificates

102

Section 8.05

Trustee’s Fees Indemnification and Expenses

102

Section 8.06

Eligibility Requirements for the Trustee

103

Section 8.07

Resignation and Removal of the Trustee

103

Section 8.08

Successor Trustee

104

Section 8.09

Merger or Consolidation of the Trustee

104

Section 8.10

Appointment of Co-Trustee or Separate Trustee

104

Section 8.11

Tax Matters

106

Section 8.12

Periodic Filings

110

Section 8.13

Tax Classification of the Excess Reserve Fund Account

and the Supplemental Interest Trust

111

 

ARTICLE IX

ADMINISTRATION OF THE MORTGAGE LOANS BY THE
MASTER SERVICER AND THE CREDIT RISK MANAGER

 

Section 9.01

Duties of the Master Servicer; Enforcement of

Servicer’s Obligations.

112

Section 9.02

Annual Statement as to Compliance

113

Section 9.03

[Reserved]

113

Section 9.04

Maintenance of Fidelity Bond and Errors and Omissions Insurance.

113

Section 9.05

Representations and Warranties of the Master Servicer

113

Section 9.06

Master Servicer Events of Default

115

Section 9.07

Waiver of Default.

116

Section 9.08

Successor to the Master Servicer.

116

Section 9.09

Compensation of the Master Servicer.

118

Section 9.10

Merger or Consolidation.

118

Section 9.11

Resignation of the Master Servicer.

118

Section 9.12

Assignment or Delegation of Duties by the Master Servicer.

118

Section 9.13

Limitation on Liability of the Master Servicer.

119

Section 9.14

Indemnification; Third Party Claims.

119

Section 9.15

Duties of the Credit Risk Manager.

120

Section 9.16

Limitation Upon Liability of the Credit Risk Manager.

121

Section 9.17

Removal and Resignation of Credit Risk Manager.

122

 

ARTICLE X

CONCERNING THE SECURITIES ADMINISTRATOR

 

Section 10.01

Duties of Securities Administrator.

122

Section 10.02

Certain Matters Affecting the Securities Administrator.

123

Section 10.03

Securities Administrator Not Liable for

Certificates or Mortgage Loans.

125

Section 10.04

Securities Administrator May Own Certificates.

125

Section 10.05

Securities Administrator’s Fees and Expenses.

125

Section 10.06

Eligibility Requirements for Securities Administrator.

126

Section 10.07

Resignation and Removal of Securities Administrator.

127

Section 10.08

Successor Securities Administrator.

128

Section 10.09

Merger or Consolidation of Securities Administrator.

128

Section 10.10

Assignment or Delegation of Duties by the

Securities Administrator.

128

 

ARTICLE XI

TERMINATION

 

Section 11.01

Termination upon Liquidation or Purchase of

the Mortgage Loans

129

Section 11.02

Final Distribution on the Certificates

130

Section 11.03

Additional Termination Requirements

131

 

ARTICLE XII

MISCELLANEOUS PROVISIONS

 

Section 12.01

Amendment

131

Section 12.02

Recordation of Agreement; Counterparts

133

Section 12.03

Governing Law

134

Section 12.04

Intention of Parties

134

Section 12.05

Notices

135

Section 12.06

Severability of Provisions

136

Section 12.07

Assignment

136

Section 12.08

Limitation on Rights of Certificateholders

136

Section 12.09

Inspection and Audit Rights

137

Section 12.10

Certificates Nonassessable and Fully Paid

137

Section 12.11

Rule of Construction

137

Section 12.12

Waiver of Jury Trial

137

SCHEDULES

Schedule I

Mortgage Loan Schedule

Schedule II

Representations and Warranties of Option One Mortgage Corporation, as Servicer

Schedule III

Representations and Warranties of the Mortgage Loan Originator as to the Individual Mortgage Loans

Schedule IV

Representations and Warranties of Option One Mortgage Corporation, as Mortgage Loan Originator

EXHIBITS

Exhibit A

Form of Class A and Class M Certificates

Exhibit B

Form of Class P Certificate

Exhibit C

Form of Class R Certificate

Exhibit D

Form of Class X Certificate

Exhibit E

Form of Initial Certification of Custodian

Exhibit F

Form of Document Certification and Exception Report of Custodian

Exhibit G

Form of Residual Transfer Affidavit

Exhibit H

Form of Transferor Certificate

Exhibit I

Form of Rule 144A Letter

Exhibit J

Form of Request for Release

Exhibit K

Form of Contents for Each Mortgage File

Exhibit L

Form of Certification to be provided with Form 10-K

Exhibit M

Form of Back-Up Certification

Exhibit N-1

Form of Monthly Remittance Advice

Exhibit N-2

Standard Layout for Monthly Defaulted Loan Report

Exhibit N-3

Form 332 Realized Loss Report

Exhibit O

Form of Interest Rate Swap Agreement

Exhibit P

Form of Credit Risk Management Agreement

Exhibit Q

Master MLPSA

Exhibit R-1

Form of Watchlist Report

Exhibit R-2

Form of Loss Severity Report

Exhibit R-3

Form of Mortgage Insurance Claims Report

Exhibit R-4

Form of Prepayment Charges Report

Exhibit R-5

Form of Analytics Report

 

 

 

 

 

 

 

 

 

 

THIS POOLING AND SERVICING AGREEMENT, dated as of November 1, 2005, among HSI ASSET SECURITIZATION CORPORATION, a Delaware corporation, as depositor (the “ Depositor ”), OPTION ONE MORTGAGE CORPORATION, a California Corporation, as mortgage loan originator (in such capacity, the “ Mortgage Loan Originator ”) and servicer (in such capacity, the “ Servicer ”), WELLS FARGO BANK, N.A., a national banking association, as master servicer (in such capacity, the “ Master Servicer ”), as securities administrator (in such capacity, the “ Securities Administrator ”) and custodian (in such capacity, the “ Custodian ”), CLAYTON FIXED INCOME SERVICES INC., as credit risk manager (the “ Credit Risk Manager ”), and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as trustee (the “ Trustee ”).

W   I   T   N   E   S   S   E   T   H:

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

PRELIMINARY STATEMENT

The Securities Administrator on behalf of the Trust shall elect that the Trust Fund  (exclusive of (i) the Swap Agreement, (ii) the right to receive and the obligation to pay Basis Risk Carryover Amounts, (iii) the Excess Reserve Fund Account, (iv) the Supplemental Interest Trust and the Supplemental Interest Trust Account and (v) the obligations to pay Class I Shortfalls (collectively, the “ Excluded Trust Assets ”) be treated for federal income tax purposes as comprising three real estate mortgage investment conduits under Section 860D of the Code (each a “ REMIC ” or, in the alternative, “ REMIC 1 ”, “ REMIC 2 ” and “ REMIC 3 ,” REMIC 3 also being referred to herein as the “ Upper Tier REMIC ”).  Any inconsistencies or ambiguities in this Agreement or in the administration of this Agreement shall be resolved in a manner that preserves the validity of such REMIC election.  

Each Certificate, other than the Class R Certificates, represents ownership of a regular interest in the Upper Tier REMIC for purposes of the REMIC Provisions.  In addition, each Certificate, other than the Class R, Class X and Class P Certificates, represents (i) the right to receive payments with respect to any Basis Risk Carryover Amounts and (ii) the obligation to pay Class I Shortfalls.  The Class R Certificate represents ownership of the sole Class of residual interest in each of REMIC 1, REMIC 2 and the Upper Tier REMIC for purposes of the REMIC Provisions.

The Upper Tier REMIC shall hold as its assets the uncertificated Lower Tier Interests in REMIC 2, other than the Class LT2-R interest, and each such Lower Tier Interest is hereby designated as a regular interest in REMIC 2 for purposes of the REMIC Provisions.  REMIC 2 shall hold as its assets the uncertificated Lower Tier Interests in REMIC 1, and each such Lower Tier Interest is hereby designated as a regular interest in REMIC 1.  REMIC 1 shall hold as its assets the property of the Trust Fund other than the Lower Tier Interests in REMIC 1 and REMIC 2 and the Excluded Trust Assets.

REMIC 1:

The following table sets forth the designations, principal balances and interest rates for each interest in REMIC 1, each of which (other than the Class LT1-R Lower Tier Interest) is hereby designated as a regular interest in REMIC 1 (the “REMIC 1 Regular Interests”):

(1)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for the Class LT1-A Interest shall be the Net WAC Rate.  

(2)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these Lower Tier Interests shall be the lesser of (i) 9.70% and (ii) the product of (a) the Net WAC Rate and (b) 2.

(3)

For any Distribution Date (and the related Interest Accrual Period) the interest rate for each of these Lower Tier Interests shall be the excess, if any, of (i) the product of (a) the Net WAC Rate and (b) 2, over (ii) 9.70%.

(4)

The Class LT1-R interest shall not have a principal amount and shall not bear interest.  The Class LT1-R interest is hereby designated as the sole class of residual interest in REMIC 1.

On each Distribution Date, the Securities Administrator shall first pay or charge as an expense of  REMIC 1 all expenses of the Trust Fund for such Distribution Date, other than any Net Swap Payment or Swap Termination Payment required to be made from the Trust Fund.

On each Distribution Date the Securities Administrator shall distribute the Interest Remittance Amount (net of expenses described in the preceding paragraph) with respect to each of the Lower Tier Interests in REMIC 1 based on the above-described interest rates.

On each Distribution Date, the Securities Administrator shall distribute the Principal Remittance Amount with respect to the Lower Tier Interests in REMIC 1, first to the Class LT1-A Interest until its principal balance is reduced to zero, and then sequentially, to the other Lower Tier Interests in REMIC 1 in ascending order of their numerical class designation, and, with respect to each pair of classes having the same numerical designation, in equal amounts to each such class, until the principal balance of each such class is reduced to zero.  All losses on the Mortgage Loans shall be allocated among the Lower Tier Interests in REMIC 1 in the same manner that principal distributions are allocated.

On each Distribution Date, the Securities Administrator shall distribute the Prepayment Premiums collected during the preceding Prepayment Period to the Class LT1-F41 and Class LT1-V41 Lower Tier Interests, respectively.

REMIC 2:

The following table sets forth the designations, principal balances and interest rates for each interest in REMIC 2, each of which (other than the Class LT2-R interest) is hereby designated as a regular interest in REMIC 2 (the “REMIC 2 Regular Interests”):

___________________________

(1)

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

(2)

The Class LT2-IO is an interest only class that does not have a principal balance.  For only those Distribution Dates listed in the first column in the table below, the Class LT2-IO shall be entitled to interest accrued on the Lower Tier Interest in REMIC 1 listed in second column in the table below at a per annum rate equal to the excess, if any, of (i) the interest rate for such Lower Tier Interest in REMIC 1 for such Distribution Date over (ii) Swap LIBOR for such Distribution Date.

 

Distribution Dates	REMIC 1 Class Designation
2	Class LT1-F1
2-3	Class LT1-F2
2-4	Class LT1-F3
2-5	Class LT1-F4
2-6	Class LT1-F5
2-7	Class LT1-F6
2-8	Class LT1-F7
2-9	Class LT1-F8
2-10	Class LT1-F9
2-11	Class LT1-F10
2-12	Class LT1-F11
2-13	Class LT1-F12
2-14	Class LT1-F13
2-15	Class LT1-F14
2-16	Class LT1-F15
2-17	Class LT1-F16
2-18	Class LT1-F17
2-19	Class LT1-F18
2-20	Class LT1-F19
2-21	Class LT1-F20
2-22	Class LT1-F21
2-23	Class LT1-F22
2-24	Class LT1-F23
2-25	Class LT1-F24
2-26	Class LT1-F25
2-27	Class LT1-F26
2-28	Class LT1-F27
2-29	Class LT1-F28
2-30	Class LT1-F29
2-31	Class LT1-F30
2-32	Class LT1-F31
2-33	Class LT1-F32
2-34	Class LT1-F33
2-35	Class LT1-F34
2-36	Class LT1-F35
2-37	Class LT1-F36
2-38	Class LT1-F37
2-39	Class LT1-F38
2-40	Class LT1-F39
2-41	Class LT1-F40
2-42	Class LT1-F41

(3)

The Class LT2-R interest is the sole class of residual interests in REMIC 2.  It does not have an interest rate or a principal balance.

On each Distribution Date, interest shall be distributed on the Lower Tier Interests in REMIC 2 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 REMIC 2 having a principal balance in the manner described under priority (a) below.

On each Distribution Date principal shall be distributed, and Realized Losses shall be allocated, among the Lower Tier Interests in REMIC 2 in the following order of priority:

(a)

First, to the Class LT2-A1, Class LT2-A2, Class LT2-A3, Class LT2-A4, Class LT2-M1, Class LT2-M2, Class LT2-M3, Class LT2-M4, Class LT2-M5 and Class LT2-M6 Interests until the principal balance of each such Lower Tier Interest equals one-half of the Class Principal Amount of the Corresponding Class of Certificates immediately after such Distribution Date; and

(b)

Second, to the Class LT2-Q Interests, any remaining amounts.

On each Distribution Date, the Securities Administrator shall be deemed to have distributed the Prepayment Premiums passed through with respect to the Class LT1-F41 and Class LT1-V41 Lower Tier Interests in REMIC 1 on such Distribution Date  to the Class LT2-Q Interest.

Upper Tier REMIC

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

(1)

The Class A-1 Interest will bear interest during each Interest Accrual Period at a per annum rate equal to (a) on or prior to the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap or (b) after the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap.  For purposes of the REMIC Provisions, the reference to “Available Funds Cap” in clause (ii) of the preceding sentence shall be deemed a reference to the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on which the Interest Rate for the Class A-1 Certificates exceeds the REMIC 2 Net Funds Cap, interest accruals based on such excess shall be treated as having been paid from the Excess Reserve Fund Account or the Supplemental Interest Trust, as applicable; on any Distribution Date on which the Interest Rate on the Class A-1 Certificates is based on the Available Funds Cap, the amount of interest that would have accrued on the Class A-1 Certificates if the REMIC 2 Net Funds Cap were substituted for the Available Funds Cap shall be treated as having been paid by the Class A-1 Certificateholders to the Supplemental Interest Trust, all pursuant to and as further provided in Section 8.11 hereof.

(2)

The Class A-2 Interest will bear interest during each Interest Accrual Period at a per annum rate equal to (a) on or prior to the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap or (b) after the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap.  For purposes of the REMIC Provisions, the reference to “Available Funds Cap” in clause (ii) of the preceding sentence shall be deemed a reference to the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on which the Interest Rate for the Class A-2 Certificates exceeds the REMIC 2 Net Funds Cap, interest accruals based on such excess shall be treated as having been paid from the Excess Reserve Fund Account or the Supplemental Interest Trust, as applicable; on any Distribution Date on which the Interest Rate on the Class A-2 Certificates is based on the Available Funds Cap, the amount of interest that would have accrued on the Class A-2 Certificates if the REMIC 2 Net Funds Cap were substituted for the Available Funds Cap shall be treated as having been paid by the Class A-2 Certificateholders to the Supplemental Interest Trust, all pursuant to and as further provided in Section 8.11 hereof.

(3)

The Class A-3 Interest will bear interest during each Interest Accrual Period at a per annum rate equal to (a) on or prior to the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap or (b) after the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap.  For purposes of the REMIC Provisions, the reference to “Available Funds Cap” in clause (ii) of the preceding sentence shall be deemed a reference to the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on which the Interest Rate for the  Class A-3 Certificates exceeds the REMIC 2 Net Funds Cap, interest accruals based on such excess shall be treated as having been paid from the Excess Reserve Fund Account or the Supplemental Interest Trust, as applicable; on any Distribution Date on which the Interest Rate on the Class A-3 Certificates is based on the Available Funds Cap, the amount of interest that would have accrued on the Class A-3 Certificates if the REMIC 2 Net Funds Cap were substituted for the Available Funds Cap shall be treated as having been paid by the Class A-3 Certificateholders to the Supplemental Interest Trust, all pursuant to and as further provided in Section 8.11 hereof.

(4)

The Class A-4 Interest will bear interest during each Interest Accrual Period at a per annum rate equal to (a) on or prior to the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap or (b) after the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap.  For purposes of the REMIC Provisions, the reference to “Available Funds Cap” in clause (ii) of the preceding sentence shall be deemed a reference to the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on which the Interest Rate for the Class A-4 Certificates exceeds the REMIC 2 Net Funds Cap, interest accruals based on such excess shall be treated as having been paid from the Excess Reserve Fund Account or the Supplemental Interest Trust, as applicable; on any Distribution Date on which the Interest Rate on the Class A-4 Certificates is based on the Available Funds Cap, the amount of interest that would have accrued on the Class A-4 Certificates if the REMIC 2 Net Funds Cap were substituted for the Available Funds Cap shall be treated as having been paid by the Class A-4 Certificateholders to the Supplemental Interest Trust, all pursuant to and as further provided in Section 8.11 hereof.

(5)

The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Interests will bear interest during each Interest Accrual Period at a per annum rate equal to (a) on or prior to the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap or (b) after the Optional Termination Date, the lesser of (i) LIBOR plus the applicable Interest Margin and (ii) the Available Funds Cap.  For purposes of the REMIC Provisions, the reference to Available Funds Cap in clause (ii) of the preceding sentence shall be deemed to be a reference to the REMIC 2 Net Funds Cap; therefore, on any Distribution Date on which the Interest Rate for the Class M-1, M-2, M-3, M-4, M-5 or M-6 Certificates, as applicable, exceeds the REMIC 2 Net Funds Cap, interest accruals based on such excess shall be treated as having been paid from the Excess Reserve Fund Account or the Supplemental Interest Trust, as applicable; on any Distribution Date on which the Interest Rate on the Class M-1, M-2, M-3, M-4, M-5 or M-6 Certificates, as applicable, is based on the Available Funds Cap, the amount of interest that would have accrued on such applicable Class of Certificates if the REMIC 2 Net Funds Cap were substituted for the Available Funds Cap shall be treated as having been paid by the Class M-1, M-2, M-3, M-4, M-5 and M-6 Certificateholders, as applicable, to the Supplemental Interest Trust, all pursuant to and as further provided in Section 8.11 hereof.

(6)

For purposes of the REMIC Provisions, Class X shall have an initial principal balance of $3,025,523.32, and the right to receive distributions of such amount represents a regular interest in the Upper Tier REMIC.  The Class X Certificate shall also comprise two notional components, each of which represents a regular interest in the Upper Tier REMIC.  The first such component has a notional balance that will at all times equal the aggregate of the Class Principal Amounts of the Lower Tier Interests in REMIC 2, and, for each Distribution Date (and the related Accrual Period) this notional component shall bear interest at a per annum rate equal to the excess, if any, of (i) (a) the weighted average of the interest rates on the Lower Tier Interests in REMIC 2 (other than any interest-only regular interest) minus (b) the Credit Risk Manager’s Fee Rate, over (ii) the Adjusted Lower Tier WAC.  The second notional component represents the right to receive all distributions in respect of the Class LT2-IO Interest in REMIC 2 (the “LT3-I” interest).  In addition, for purposes of the REMIC Provisions, the Class X Certificate shall represent beneficial ownership of (i) the Excess Reserve Fund Account; (ii) the Supplemental Interest Trust, including the Swap Agreement and (iii) an interest in the notional principal contracts described in Section 8.11 hereof.

(7)

The Class R Interest is the sole Class of residual interest in the Upper Tier REMIC.  The Class R Interest is issued without a principal amount and does not bear a stated Interest Rate.  The Class R Certificate will be issued as a single certificate evidencing the initial Percentage Interest on such Class.

(8)

The Class P Interest shall not bear interest at a stated Interest Rate.  Prepayment Charges paid with respect to the Mortgage Loans shall be paid to the Class P Certificateholders as provided in Section 4.02(b).  For purposes of the REMIC Provisions, the Class P Interest shall represent a regular interest in the Upper Tier REMIC.  The Class P Certificate will have a Class P Principal Amount of $100.

(9)

Each of these Certificates will represent not only the ownership of the Corresponding Class of Upper Tier REMIC Regular Interest but also the right to receive payments from the Excess Reserve Fund Account in respect of any Basis Risk Carryover Amounts and from the Supplemental Interest Trust in respect of proceeds from the Swap Agreement.  For federal income tax purposes, the Securities Administrator will treat a Certificateholder’s right to receive payments from the Excess Reserve Fund Account as payments made pursuant to a notional principal contract written by the Class X Certificateholders.

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

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

Book-Entry Certificates

All Classes of Certificates other than the Physical Certificates.

Class A Certificates

Class A-1, Class A-2, Class A-3, and Class A-4 Certificates.

Class M Certificates

Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Certificates.

Delay Certificates

None.

ERISA-Restricted

Certificates

Class P, Class X and Class R Certificates; any certificate with a rating below the lowest applicable permitted rating under the Underwriters’ Exemption.

ERISA-Restricted

Swap Certificates

Any Class A or Class M Certificate for so long as the Swap Agreement is in existence.

LIBOR Certificates

Collectively, the Class A and Class M Certificates.

Non-Delay Certificates

Collectively, the Class A, Class X and Class M Certificates.

Offered Certificates

All Classes of Certificates other than the Private Certificates.

Physical Certificates

Class P, Class X and Class R Certificates.

Private Certificates

Class P, Class X and Class R Certificates.

Rating Agencies

Fitch, Moody’s and Standard & Poor’s.

Regular Certificates

All Classes of Certificates other than the Class R Certificates.

Residual Certificates

Class R Certificates.

ARTICLE I

DEFINITIONS

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

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

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

Additional Termination Event :  As defined in the Swap Agreement.

Adjustable Rate Mortgage Loan :  A Mortgage Loan which provides for the adjustment of the Mortgage Rate payable in respect thereto.

Adjustment Date :  As to any Adjustable Rate Mortgage Loan, the first Due Date on which the related Mortgage Rate adjusts as set forth in the related Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as set forth in the related Mortgage Note.

Advance :  Any P&I Advance or Servicing Advance.

Adjusted Lower TIER WAC :  For any Distribution Date (and the related Accrual Period), an amount equal to (i) two, multiplied by (ii) the weighted average of the interest rates for such Distribution Date for the Class LT2A-1, LT2A-2, LT2A-3, LT2A-4, LT2M-1, LT2M-2, LT2M-3, LT2M-4, LT2M-5, LT2M-6 and LT2Q Interests, weighted in proportion to their Class Principal Amounts as of the beginning of the related Accrual Period and computed by subjecting the rate on the Class LT2-Q Interest to a cap of 0.00%, and by subjecting the rate on each of the Class LT2A-1, LT2A-2, LT2A-3, LT2A-4, LT2M-1, LT2M-2, LT2M-3, LT2M-4, LT2M-5, LT2M-6 and LT2-Q Interests to a cap that corresponds to the Interest Rate (determined by substituting the REMIC 2 Net Funds Cap for the Available Funds Cap) for the Corresponding Class of Certificates, provided, however , that for each Class of LIBOR Certificates, the Certificate Interest Rate shall be multiplied by an amount equal to (a) the actual number of days in the Interest Accrual Period, divided by (b) 30.

Affected Party :  As defined in the Swap Agreement.

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

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

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

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

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

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

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

Available Funds Cap :  With respect to the Mortgage Loans as of any Distribution Date, the product of (i)(a) the weighted average of (x) the Expense Adjusted Mortgage Rates in effect on the beginning of the related Due Period (not including for this purpose Mortgage Loans for which Principal Prepayments in Full have been received and distributed in the month prior to that Distribution Date), minus (b) the product of (i) a fraction (expressed as a percentage), the numerator of which is equal to any Net Swap Payment or Swap Termination Payment owed to the Swap Counterparty (other than a Swap Termination Payment caused by the Swap Counterparty) for such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the related Due Period (not including for this purpose Mortgage Loans for which Principal Payments in full have been received and distributed in the month prior to that Distribution Date) and (2) 12, and (ii) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days in the Interest Accrual Period related to such Distribution Date.  

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

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

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

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

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

Bulk PMI Policy :  The PMI Mortgage Master Insurance Policy No. 22699-1-0, Bulk No. 2005-0998, subject to the terms and conditions of the PMI Letter Agreement, covering all the Mortgage Loans.

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

Certificate :  Any one of the Certificates executed by the Securities Administrator in substantially the forms attached hereto as exhibits.

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

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

Certificate Register :  The register maintained pursuant to Section 5.02.

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

Certification :  As defined in Section 8.12(c).

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

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

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

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

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

Class A Certificates :  As specified in the Preliminary Statement.

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

Class I Shortfalls :  As defined in Section 8.11 hereof.  For purposes of clarity, the Class I Shortfall for any Distribution Date shall equal the amount payable to the Swap Counterparty on such Distribution Date in excess of the amount payable on the Class LT3-I interest in the Upper Tier REMIC on such Distribution Date, all as further provided in Section 8.11 hereof.

Class M Certificates :  As specified in the Preliminary Statement.

Class M Principal Payment Amount :  With respect to any Distribution Date and any Class of Class M Certificates is the lesser of (i) the excess of (a) the Principal Payment Amount over (b) the aggregate amount distributed on that Distribution Date as principal to all Classes of Certificates more senior than that Class of Class M Certificates and (ii) the excess of (a) the sum of the aggregate Class Certificate Balances of all Class of Certificates more senior than that Class of Class M Certificates (after giving effect to all amounts distributed on that Distribution Date to those Classes of more senior certificates) and the Class Certificate Balance of that Class of Class M Certificates immediately prior to that Distribution Date over (b) the lesser of:

(x)

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

 

and

(y)

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

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

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

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

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

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

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

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

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

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

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

Class X Distributable Amount :  With respect to any Distribution Date, the amount of interest that has accrued on the Class X Notional Balance, as described in the Preliminary Statement, but that has not been distributed prior to such date.  In addition, such amount shall include the initial Overcollateralization Amount of $3,025,423.32 ($3,025,523.32 less $100 of such amount allocated to the Class P Certificates) to the extent such amount has not been distributed on an earlier Distribution Date as part of the Overcollateralization Reduction Amount.

Class X Notional Balance :  With respect to any Distribution Date (and the related Accrual Period) the aggregate principal balance of the regular interests in REMIC 3 as specified in the Preliminary Statement hereto.

Class X Interest :  The Upper Tier REMIC Regular Interest represented by the Class X Certificates as specified and described in the Preliminary Statement and the related footnote thereto.

Closing Date :  November 29, 2005.

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

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

Compensating Interest :  For any Distribution Date, the lesser of (a) the amount, if any, by which the Prepayment Interest Shortfall, if any, for such Distribution Date, with respect to all voluntary Principal Prepayments (excluding any payments made upon liquidation of any Mortgage Loan) exceeds all Prepayment Interest Excesses for such Distribution Date, and (b) the aggregate amount of the Servicing Fee actually retained by or paid to the Servicer for such Distribution Date.

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

Corporate Trust Office :  With respect to the Securities Administrator, the office of the Securities Administrator at (i) for certificate transfer purposes, Wells Fargo Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention:  Corporate Trust Services – HASCO 2005-OPT1, and (ii) for all other purposes, 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services – HASCO 2005-OPT1 or at such other address as the Securities Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Master Servicer and the Trustee.  With respect to the Trustee, the designated office of the Trustee in the State of California at which any particular time its corporate trust business with respect to this Agreement is administered, which office at the date of the execution of this Agreement is located at 1761 East St. Andrew Place, Santa Ana, California 92705-4934, Attention:  Trust Administration – HB0503, facsimile number (714) 247-6329, and its telephone number is 714-247-6000 and which is also the address to which notices to and correspondence with the Trustee under this Agreement should be directed.  

Corresponding Class :  The Class of interests that corresponds to a Class of interests in REMIC 2 or REMIC 3, as provided in the Preliminary Statement hereto.

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

Credit Risk Manager :  Clayton Fixed Income Services Inc., formerly known as The Murrayhill Company, a Colorado corporation, and its successors and assigns.

Credit Risk Management Agreement :  Each Credit Risk Management Agreement, dated as of the Closing Date, entered into by the Servicer and/or Master Servicer and the Credit Risk Manager.

Credit Risk Manager’s Fee :  With respect to any Distribution Date and each Mortgage Loan, an amount equal to the product of (a) one twelfth, (b) the Credit Risk Manager’s Fee Rate and (c) the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period; provided , however , the annual amount of the Credit Risk Manager’s Fee shall not be less than $20,000.

Credit Risk Manager’s Fee Rate :  0.01% per annum.

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

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

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

Custodial File :  With respect to each Mortgage Loan, the file retained by the Custodian for the Trustee consisting of the items in Section 2.01(b).

Cut-off Date :  November 1, 2005.

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

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

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

Defaulting Party :  As defined in the Swap Agreement.

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

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

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

Delay Certificates :  As specified in the Preliminary Statement.

Deleted Mortgage Loan :  As defined in Section 2.03.

Delinquency Rate :  For any calendar month, a fraction, expressed as a percentage, the numerator of which is the aggregate Stated Principal Balance of 60+ Day Delinquent Mortgage Loans as of the close of business on the last day of such month, and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans as of the close of business on the last day of such month.

Delinquency Trigger Event :  With respect to any Distribution Date, the circumstances in which the Rolling Three Month Delinquency Rate as of the last day of the immediately preceding calendar month exceeds 58.80% of the Credit Enhancement Percentage for the Class A Certificates.

Delinquent :  For reporting purposes, a Mortgage Loan is “delinquent” when any payment contractually due thereon has not been made by the close of business on the Due Date therefor.  Such 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 first 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” and the second immediately succeeding month and “90 days Delinquent” and the third immediately succeeding month.

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

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

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

Depository Institution :  Any depository institution or trust company, including the Trustee and the Securities Administrator, that (a) is incorporated under the laws of the United States of America or any State thereof, (b) is subject to supervision and examination by federal or state banking authorities and (c) has outstanding unsecured commercial paper or other short-term unsecured debt obligations that are rated P-1 by Moody’s, F1+ by Fitch and A-1 by Standard & Poor’s.

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

Determination Date :  With respect to each Remittance Date, the 15th day (or if such day is not a Business Day, the immediately preceding Business Day) in the calendar month in which such Remittance Date occurs.

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

Distribution Account :  The separate Eligible Account created and maintained by the Securities Administrator pursuant to Section 3.07(d) in the name of the Securities Administrator as paying agent for the benefit of the Trustee and the Certificateholders and designated “Wells Fargo Bank, N.A. as paying agent in trust for registered holders of HSI Asset Securitization Corporation Trust 2005-OPT1 Mortgage Pass-Through Certificates, Series 2005-OPT1”.  Funds in the Distribution Account shall be held in trust for the Certificateholders for the uses and purposes set forth in this Agreement.

Distribution Account Deposit Date :  As to any Distribution Date, 12:00 noon New York City time on the third Business Day immediately preceding such Distribution Date.

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

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

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

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

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

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

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

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

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

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

Escrow Account :  The Eligible Account or Accounts established and maintained pursuant to Section 3.09(b).

Escrow Payments :  As defined in Section 3.09(b).

Event of Default :  As defined in Section 7.01.

Excess Overcollateralization Amount :  With respect to any Distribution Date, the excess, if any, of (a) the Overcollateralization Amount on such Distribution Date over (b) the Overcollateralization Target Amount for such Distribution Date.

Excess Reserve Fund Account :  The separate Eligible Account created and maintained by the Securities Administrator pursuant to Sections 3.07(b) and 3.07(c) in the name of the Securities Administrator as paying agent for the benefit of the LIBOR Certificateholders and the Class X Certificateholders and designated “Wells Fargo Bank, N.A. as paying agent in trust for registered holders of HSI Asset Securitization Corporation Trust 2005-OPT1, Mortgage Pass-Through Certificates, Series 2005-OPT1”.  Funds in the Excess Reserve Fund Account shall be held in trust for such Certificateholders for the uses and purposes set forth in this Agreement.  Amounts on deposit in the Excess Reserve Fund Account shall not be invested.  The Excess Reserve Fund Account shall be considered part of the Trust Fund but not the part of any REMIC.

Excluded Trust Assets :  As defined in the Preliminary Statement.

Exchange Act :  As defined in Section 8.12(b).

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

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

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

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

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

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

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

Final Scheduled Distribution Date :  The Final Scheduled Distribution Date for each Class of Certificates is the Distribution Date occurring in November 2035.

Fitch :  Fitch, Inc., or any successor thereto.  If Fitch is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 12.05(c) the address for notices to Fitch shall be Fitch, Inc., One State Street Plaza, New York, New York 10004, Attention:  MBS Monitoring – HSI Asset Securitization Corporation Trust 2005-OPT1, or such other address as Fitch may hereafter furnish to the Depositor and the Securities Administrator.

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

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

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

Index :  As to each Adjustable Rate Mortgage Loan, the index from time to time in effect for the adjustment of the Mortgage Rate set forth as such on the related Mortgage Note.

Initial Certification :  As defined in Section 2.02.

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

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

Initial Sale Date :  The date the Mortgage Loan was purchased by the Purchaser from the Mortgage Loan Originator under the Purchase Agreement.

Interest Accrual Period :  With respect to each Class of Non-Delay Certificates and the Corresponding Class of Lower Tier Interests and any Distribution Date, the period commencing on the Distribution Date occurring in the month preceding the month in which the current Distribution Date occurs and ending on the day immediately preceding the current Distribution Date (or, in the case of the first Distribution Date, the period from and including the Closing Date to but excluding such first Distribution Date).  For purposes of computing interest accruals on each Class of Non-Delay Certificates, each Interest Accrual Period has the actual number of days in such month and each year is assumed to have 360 days. With respect to each Class of Delay Certificates, each Interest Accrual Period shall be the calendar month preceding the month of such Distribution Date and for purposes of computing interest accruals, each year is assumed to be comprised of twelve thirty-day calendar months.

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

Interest Margin :  Except as set forth in the following sentence, with respect to each Class of Regular Certificates, the following percentages:  Class A-1 Certificates, 0.090%; Class A-2 Certificates, 0.170%; Class A-3 Certificates, 0.260%; Class A-4 Certificates, 0.350%; Class M-1 Certificates, 0.420%; Class M-2 Certificates, 0.450%; Class M-3 Certificates, 0.470%; Class M-4 Certificates, 0.580%; Class M-5 Certificates, 0.680%; and Class M-6 Certificates, 0.720%.  On the first Distribution Date after the Optional Termination Date, the Interest Margins shall increase to the following percentages: Class A-1 Certificates, 0.180%; Class A-2 Certificates, 0.340%; Class A-3 Certificates, 0.520%; Class A-4 Certificates, 0.700%; Class M-1 Certificates, 0.630%; Class M-2 Certificates, 0.675%; Class M-3 Certificates, 0.705%; Class M-4 Certificates, 0.870%; Class M-5 Certificates, 1.020% and Class M-6 Certificates, 1.080%.

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

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

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

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

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

IRS :  The Internal Revenue Service.

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

LIBOR :  With respect to any Interest Accrual Period for the LIBOR Certificates, the rate determined by the Securities Administrator on the related LIBOR Determination Date on the basis of the offered rate for one-month U.S. dollar deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such date; provided , that if such rate does not appear on Telerate Page 3750, the rate for such date will be determined on the basis of the rates at which one-month U.S. dollar deposits are offered by the Reference Banks at approximately 11:00 a.m. (London time) on such date to prime banks in the London interbank market.  In such event, the Securities Administrator shall request the principal London office of each of the Reference Banks to provide a quotation of its rate.  If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%).  If fewer than two quotations are provided as requested, the rate for that date will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Securities Administrator (after consultation with the Depositor), at approximately 11:00 a.m. (New York City time) on such date for one-month U.S. dollar loans to leading European banks.

LIBOR Certificates :  As specified in the Preliminary Statement.

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

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

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

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

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

Lower Tier REMIC :  As described in the Preliminary Statement.

Master MLPSA :  The Master Mortgage Loan Purchase and Servicing Agreement among the Mortgage Loan Originator, Option One, Owner Trusts 2001-A, 2001-B, 2001-2, 2002-3, 2003-4, 2003-5 and 2005-6, as sellers, and the Purchaser of the Mortgage Loans, dated July 1, 2005 (for first and second lien, fixed and adjustable rate mortgage loans).

Master Servicer :  Wells Fargo, and if a successor Master Servicer is appointed hereunder, such successor.

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

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

Master Servicing Fee Rate :  With respect to any Mortgage Loan, a per annum rate equal to 0.0025%.

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

Maximum Mortgage Rate :  With respect to each Adjustable Rate Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in the related Mortgage Note and (ii) is the maximum interest rate to which the Mortgage Rate on such Mortgage Loan may be increased during the lifetime of such Mortgage Loan.

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

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

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

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

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

Minimum Mortgage Rate :  With respect to each Adjustable Rate Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in the related Mortgage Note and (ii) is the minimum interest rate to which the Mortgage Rate on such Mortgage Loan may be decreased during the lifetime of such Mortgage Loan.

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

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

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

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

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

Mortgage Loan Originator :  Option One Mortgage Corporation, a California corporation, and its successors in interest.

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

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

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

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

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

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

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

Net Swap Payment :  With respect to each Swap Payment Date, the net payment (not including any Swap Termination Payment) required to be made pursuant to the terms of the Swap Agreement plus any unpaid amounts due on previous Swap Payment Dates and accrued interest thereon as provided in the Swap Agreement, as calculated by the Swap Counterparty and furnished to the Securities Administrator.

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

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

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

NIM Trustee :  The trustee for the NIM Securities.

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

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

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

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

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

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

Offered Certificates :  As specified in the Preliminary Statement.

Officer’s Certificate :  A certificate signed by an officer of the Servicer or the Master Servicer, as applicable, with responsibility for the servicing of the Mortgage Loans and listed on a list delivered to the Trustee and the Securities Administrator pursuant to this Agreement.

Opinion of Counsel :  A written opinion of counsel, who may be in-house counsel for the Servicer or any Subservicer, reasonably acceptable to the Trustee and/or the Securities Administrator, as applicable (and/or such other Persons as may be set forth herein); provided , that any Opinion of Counsel relating to (a) qualification of any REMIC created hereby or (b) compliance with the REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the Servicer of the Mortgage Loans or the Master Servicer, (ii) does not have any material direct or indirect financial interest in the Servicer of the Mortgage Loans or the Master Servicer or in an affiliate of either and (iii) is not connected with the Servicer of the Mortgage Loans or the Master Servicer as an officer, employee, director or person performing similar functions.

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

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

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

(i)

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

(ii)

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

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

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

Overcollateralization Deficiency :  With respect to any Distribution Date, the excess, if any, of (a) the Overcollateralization Target Amount applicable to such Distribution Date over (b) the Overcollateralization Amount applicable to such Distribution Date.

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

Overcollateralization Target Amount :  Prior to the Stepdown Date, an amount equal to 0.60% of the Cut-off Date Pool Principal Balance.  On and after the Stepdown Date, an amount equal to the greater of (i) 1.20% of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period and (ii) 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date; provided , however , that if, on any Distribution Date, a Trigger Event exists, the Overcollateralization Target Amount shall not be reduced to the applicable percentage of the then current aggregate Stated Principal Balance of the Mortgage Loans until the Distribution Date on which a Trigger Event no longer exists, but rather shall remain the Overcollateralization Target Amount as determined for the immediately preceding Distribution Date.  When the Class Certificate Balance of each Class of LIBOR Certificates has been reduced to zero, the Overcollateralization Target Amount will thereafter equal zero.

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

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

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

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

(i)

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

(ii)

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

(iii)

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

(iv)

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

(v)

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

(vi)

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

(vii)

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

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

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

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

Physical Certificates :  As specified in the Preliminary Statement.

PMI Insurer :  PMI Mortgage Insurance Co.

PMI Letter Agreement :  The letter agreement dated November 29, 2005 by and among the Purchaser, the Trustee (on behalf of the Trust) and PMI Mortgage.  

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

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

Prepayment Interest Excess :  With respect to any Distribution Date, any interest collected by the Servicer with respect to any Mortgage Loan as to which a Principal Prepayment occurs from the 1st day of the month through the 15th day of the month in which such Distribution Date occurs and that represents interest that accrues from the 1st day of such month to the date of such Principal Prepayment.

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

Prepayment Period :  With respect to any Distribution Date and any Principal Prepayments, the period from and including the 16th day of the month preceding the month in which such Distribution Date occurs (or, in the case of the first Distribution Date, from the Cut-off Date) to and including the 15th day of the month in which such Distribution Date occurs.

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

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

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

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

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

Private Certificates :  As specified in the Preliminary Statement.

Prospectus Supplement :  The Prospectus Supplement, dated November 22, 2005, relating to the Offered Certificates.

PTCE 95-60 :  As defined in Section 5.02(b).

Purchase Agreement :  The Mortgage Loan Purchase Agreement, dated as of November 1, 2005, between the Depositor and the Purchaser.

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

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

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

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

Reference Bank :  As defined in Section 4.04.

Regular Certificates :  As specified in the Preliminary Statement.

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

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

REMIC 1 :  As described in the Preliminary Statement.

REMIC 2 :  As described in the Preliminary Statement.

REMIC 2 Net Funds Cap :  For any Distribution Date (and the related Interest Accrual Period) and any Class of Certificates, an amount equal to (i) the weighted average of the interest rates on the Lower Tier Interests in REMIC 2 (other than any interest-only regular interest), weighted in proportion to their Class Principal Amounts as of the beginning of the related Interest Accrual Period, multiplied by (ii) an amount equal to (a) 30, divided by (b) the actual number of days in the Interest Accrual Period.

REMIC 3 :  As described in the Preliminary Statement.

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

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

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

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

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

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

Replacement Receipts :  As defined in Section 4.08.

Replacement Receipts Account :  As defined in Section 4.08.

Repurchase Price :  With respect to any Mortgage Loan, an amount equal to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the date of repurchase, (ii) interest on such unpaid principal balance of such Mortgage Loan at the Mortgage Rate from the last date through which interest has been paid to the date of repurchase, (iii) all unreimbursed Servicing Advances and (iv) all expenses incurred by the Master Servicer, Servicer or Trustee arising out of the Master Servicer’s, Servicer’s or Trustee’s enforcement of the Mortgage Loan Originator’s repurchase obligation hereunder.

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

Residual Certificates :  As specified in the Preliminary Statement.

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

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

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

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

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

Securities Administrator :  Wells Fargo, and if a successor Securities Administrator is appointed hereunder, such successor.

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

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

Senior Principal Payment Amount :  With respect to any Distribution Date and any Class of Class A Certificates, the lesser of (i) the Principal Payment Amount for that Distribution Date and (ii) the excess of (a) the aggregate Class Certificate Balance of the Class A Certificates immediately prior to that Distribution Date over (b) the lesser of (x) 72.80% of the aggregate Stated Principal Balance of the Mortgage Loans for that Distribution Date and (y) the excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans for that Distribution Date over 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

Servicer :  Option One Mortgage Corporation, and its successors in interest, and if a successor servicer is appointed hereunder, such successor.

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

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

Servicing Fee Rate :  With respect to each Mortgage Loan, 0.300% per annum with respect to the first ten Distribution Dates; 0.400% per annum with respect to the 11th through the 30th Distribution Dates; and 0.650% per annum with respect to the 31st Distribution Date and thereafter.

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

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

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

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

Standard & Poor’s :  Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. If Standard & Poor’s is designated as a Rating Agency in the Preliminary Statement, for purposes of Section 12.05(c) the address for notices to Standard & Poor’s shall be Standard & Poor’s, 55 Water Street, New York, New York 10041, Attention:  Residential Mortgage Surveillance Group – HSI Asset Securitization Corporation Trust 2005-OPT1, or such other address as Standard & Poor’s may hereafter furnish to the Depositor and the Securities Administrator.

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

Startup Day :  The Closing Date.

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

Stepdown Date :  The earlier to occur of (i) the first Distribution Date following the Distribution Date on which the aggregate Class Certificate Balances of the Class A Certificates have been reduced to zero and (ii) the later to occur of (a) the Distribution Date in December 2008 and (b) the first Distribution Date on which the Credit Enhancement Percentage for the Class A Certificates (calculated for this purpose only after taking into account payments of principal applied to reduce the Stated Principal Balance of the Mortgage Loans for that Distribution Date but prior to any applications of Principal Payment Amounts to the Certificates on that Distribution Date) is greater than or equal to 27.20%.

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

Subservicer :  As defined in Section 3.02(a).

Subservicing Account :  As defined in Section 3.08.

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

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

Substitution Adjustment Amount :  As defined in Section 2.03.

Supplemental Interest Trust :  The corpus of a trust created pursuant to Section 4.06 of this Agreement and designated as the “Supplemental Interest Trust,” consisting of the Swap Agreement, the Supplemental Interest Trust Account, the right to receive the Class X Distributable Amount as provided in Section 4.02(a)(iii)(G), the Class LT3-I interest in REMIC 3 and the right to receive Class I Shortfalls.

Supplemental Interest Trust Account :  The account created pursuant to Section 4.06 of this Agreement.

Supplemental Interest Trust Amount :  With respect to each Distribution Date and the related Swap Payment Date, the sum of any Net Swap Payment and any Swap Termination Payment deposited into the Supplemental Interest Trust Account.

Swap Agreement :  The interest rate swap agreement entered into by the Supplemental Interest Trust, which agreement provides for, among other things, a Net Swap Payment to be paid pursuant to the conditions provided therein, together with any schedules, confirmations or other agreements relating thereto, attached hereto as Exhibit O.

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

Swap Counterparty Trigger Event :  A Swap Counterparty Trigger Event shall have occurred if any of a Swap Default with respect to which the Swap Counterparty is a Defaulting Party, a Termination Event with respect to which the Swap Counterparty is the sole Affected Party or an Additional Termination Event with respect to which the Swap Counterparty is the sole Affected Party has occurred.

Swap Default :  Any of the circumstances constituting an “Event of Default” under the Swap Agreement.

Swap LIBOR :  With respect to any Distribution Date (and the Accrual Period relating to such Distribution Date), the product of (i) the Floating Rate Option (as defined in the Swap Agreement) for the related Distribution Date, (ii) two, and (iii) the quotient of (a) the actual number of days in the Accrual Period for the LIBOR Certificates and (b) 30, as calculated by the Swap Counterparty and furnished to the Securities Administrator.

Swap Termination Payment :  Upon the designation of an “Early Termination Date” as defined in the Swap Agreement, the payment required to be made by the Supplemental Interest Trust to the Swap Counterparty, or by the Swap Counterparty to the Supplemental Interest Trust, as applicable, pursuant to the terms of the Swap Agreement, and any unpaid amounts due on previous Distribution Dates and accrued interest thereon as provided in the Swap Agreement, as calculated by the Swap Counterparty and furnished to the Securities Administrator.

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

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

Termination Price :  As defined in Section 11.01.

Termination Receipts :  As defined in Section 4.08.

Termination Receipts Account :  As defined in Section 4.08.

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

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

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

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

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

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

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

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

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

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

Upper Tier REMIC :  As described in the Preliminary Statement.

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

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

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

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

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES

Section 2.01

Conveyance of Mortgage Loans.  (a) The Depositor, concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the Trustee for the benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund.

Concurrently with the execution of this Agreement, the Swap Agreement and a copy of the PMI Letter Agreement shall be delivered to the Securities Administrator and the Bulk PMI Policy and the PMI Letter Agreement, shall be delivered to the Trustee.  In connection therewith, the Depositor hereby directs (i) the Securities Administrator (solely in its capacity as such) and the Securities Administrator is hereby authorized to execute and deliver the Swap Agreement (on behalf of the Supplemental Interest Trust) and (ii) the Trustee (solely in its capacity as such) and the Trustee is hereby authorized to execute the PMI Letter Agreement, in each case for the benefit of Certificateholders.  The Depositor, the Master Servicer, the Servicer, the Mortgage Loan Originator, the Purchaser, the Credit Risk Manager and the Certificateholders (by their acceptance of such Certificates) acknowledge and agree that the Securities Administrator is executing and delivering the Swap Agreement solely in its capacity as Securities Administrator of the Supplemental Interest Trust and the Trust Fund and not in its individual capacity, and the Trustee is executing and delivering the PMI Letter Agreement solely in its capacity as Trustee of the Trust Fund, and not in its individual capacity.  The Securities Administrator shall have no duty or responsibility to enter into any other swap agreement upon the expiration or termination of the Swap Agreement unless so directed by the Depositor.

Concurrently with the execution and delivery of this Agreement, the Depositor does hereby assign to the Trustee all of its rights and interest under the Purchase Agreement, including the right to enforce the Purchaser’s obligation to repurchase the Mortgage Loans under Section 5 of the Purchase Agreement.  The Trustee hereby accepts such assignment, and as set forth herein in Section 2.03(k), shall be entitled to exercise all the rights of the Depositor under the Purchase Agreement as if, for such purpose, it were the Depositor.

(b)

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

(i)

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

(ii)

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

(iii)

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

(iv)

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

(v)

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

(vi)

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

(vii)

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

(viii)

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

(ix)

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

(x)

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

To the extent not previously delivered to the Purchaser pursuant to the Master MLPSA, the Mortgage Loan Originator shall promptly upon receipt from the respective recording office cause to be delivered to the Custodian the original recorded document described in clauses (iv) and (vi) above.

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

To the extent not previously delivered to the Purchaser pursuant to the Master MLPSA, on or prior to the Closing Date, the Mortgage Loan Originator shall deliver to the Custodian, Assignments of Mortgages, in blank, for each Mortgage Loan.  No later than thirty (30) Business Days following the later of the Closing Date and the date of receipt by the Servicer of the complete recording information for a Mortgage, the Servicer shall promptly submit or cause to be submitted for recording, at the expense of the Mortgage Loan Originator and at no expense to the Trust Fund, the Trustee, the Servicer or the Depositor, in the appropriate public office for real property records, each Assignment of Mortgage referred to in Section 2.01(b)(ii).  Notwithstanding the foregoing, however, for administrative convenience and facilitation of servicing and to reduce closing costs, the Assignments of Mortgage shall not be required to be completed and submitted for recording with respect to any Mortgage Loan if the Trustee and each Rating Agency have received an Opinion of Counsel, satisfactory in form and substance to the Trustee and each Rating Agency to the effect that the recordation of such Assignments of Mortgage in any specific jurisdiction is not necessary to protect the Trustee’s interest in the related Mortgage Note.  If the Assignment of Mortgage is to be recorded, the Mortgage shall be assigned by the Mortgage Loan Originator, at the expense of the Mortgage Loan Originator, to “Deutsche Bank National Trust Company, as trustee under the Pooling and Servicing Agreement dated as of November 1, 2005, HSI Asset Securitization Corporation Trust 2005-OPT1”.  In the event that any such Assignment of Mortgage is lost or returned unrecorded because of a defect therein, the Mortgage Loan Originator shall promptly cause to be delivered a substitute Assignment of Mortgage to cure such defect and thereafter cause each such assignment to be duly recorded at no expense to the Trust Fund.

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

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

(c)

The Depositor does hereby establish, pursuant to the further provisions of this Agreement and the laws of the State of New York, an express trust (the “ Trust ”) to be known, for convenience, as “HSI Asset Securitization Corporation Trust 2005-OPT1” and Deutsche Bank National Trust Company is hereby appointed as Trustee in accordance with the provisions of this Agreement.  The parties hereto acknowledge and agree that it is the policy and intention of the Trust to acquire only Mortgage Loans meeting the requirements set forth in this Agreement, including without limitation, the representation and warranty set forth in paragraph (44) of Schedule III hereto.

(d)

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

Section 2.02

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

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

Within 90 days after the Closing Date, the Custodian shall ascertain that all documents identified in the Document Certification and Exception Report in the form attached hereto as Exhibit F are in its possession, and shall deliver to the Depositor, the Mortgage Loan Originator and the Servicer a Document Certification and Exception Report, in the form annexed hereto as Exhibit F, to the effect that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in such certification as an exception and not covered by such certification):  (i) all documents identified in the Document Certification and Exception Report and required to be reviewed by it are in its possession; (ii) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan; (iii) based on its examination and only as to the foregoing documents, the information set forth in items (1), (2), (3), (15), (18) and (22) of the Data Tape Information respecting such Mortgage Loan is correct; and (iv) each Mortgage Note has been endorsed as provided in Section 2.01 of this Agreement.  The Trustee (or the Custodian) shall not be responsible to verify the validity, sufficiency or genuineness of any document in any Custodial File.

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

The Mortgage Loan Originator shall deliver to the Servicer copies of all trailing documents required to be included in the Custodial File at the same time the original or certified copies thereof are delivered to the Custodian, including but not limited to such documents as the title insurance policy and any other Mortgage Loan documents upon return from the public recording office.  The documents shall be delivered by the Mortgage Loan Originator at the Mortgage Loan Originator’s expense to the Servicer.

Section 2.03

Representations, Warranties and Covenants of the Servicer, Mortgage Loan Originator and the Purchaser; Remedies for Breaches of Representations and Warranties with Respect to the Mortgage Loans.  (a)  The Servicer makes the representations and warranties set forth in Schedule II hereto, respectively, to the Depositor, the Master Servicer, the Securities Administrator and the Trustee, as of the Closing Date.

(b)

The Mortgage Loan Originator hereby makes the representations and warranties set forth in Schedule III and Schedule IV hereto to the Depositor, the Master Servicer, the Securities Administrator and the Trustee, as of the Initial Sale Date and the Closing Date, respectively.

(c)

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

(d)

Within 30 days of the earlier of either discovery by or notice to the Mortgage Loan Originator that any Mortgage Loan does not conform to the requirements as determined in the Custodian’s review of the related Custodial File or within 60 days of the earlier of either discovery by or notice to the Mortgage Loan Originator of any breach of a representation or warranty set forth in Section 2.03(b) that materially and adversely affects the value of any Mortgage Loan or the interest of the Trustee or the Certificateholders therein, the Mortgage Loan Originator shall use its best efforts to cause to be remedied a material defect in a document constituting part of a Mortgage File or promptly to cure such breach in all material respects and, if such defect or breach cannot be remedied, the Mortgage Loan Originator shall, at the Depositor’s option as specified in writing and provided to the Mortgage Loan Originator and the Trustee, (i) if such 30- or 60-day period, as applicable, expires prior to the second anniversary of the Closing Date, remove such Mortgage Loan (a “ Deleted Mortgage Loan ”) from the Trust Fund and substitute in its place a Substitute Mortgage Loan, in the manner and subject to the conditions set forth in this Section 2.03; or (ii) repurchase such Mortgage Loan at the Repurchase Price; provided , however , that any such substitution pursuant to clause (i) above shall not be effected prior to the delivery to the Custodian of a Request for Release substantially in the form of Exhibit J, and the delivery of the Mortgage File to the Custodian for any such Substitute Mortgage Loan.  Notwithstanding the foregoing, a breach (i) which causes a Mortgage Loan not to constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code or (ii) by the Mortgage Loan Originator of any of the representations and warranties set forth in clause (44), (47), (54), (56), (57), (58), (59), (63), (82) or (83) of Schedule III , in each case, will be deemed automatically to materially and adversely affect the value of such Mortgage Loan and the interests of the Trustee and Certificateholders in such Mortgage Loan.  In the event that the Trustee receives notice of a breach by the Mortgage Loan Originator of any of the representations and warranties set forth in clause (44), (47), (54), (56), (57), (58), (59), (62), (63), (82) or (83) of Schedule III , the Trustee shall give notice of such breach to the Mortgage Loan Originator and request the Mortgage Loan Originator to repurchase the Mortgage Loan at the Repurchase Price within sixty (60) days of the Mortgage Loan Originator receipt of such notice.  The Mortgage Loan Originator shall repurchase each such Mortgage Loan within 60 days of the earlier of discovery or receipt of notice with respect to each such Mortgage Loan.

(e)

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

(f)

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

(g)

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

(h)

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

(i)

The Servicer shall amend the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the removal of such Deleted Mortgage Loan and the Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee, the Custodian, the Master Servicer and the Securities Administrator.

(j)

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

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

(k)

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

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

Section 2.04

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

Section 2.05

REMIC Matters.  The Preliminary Statement sets forth the designations for federal income tax purposes of all interests created hereby.  The “ Startup Day ” for purposes of the REMIC Provisions shall be the Closing Date.  The “ latest possible maturity date ” is the Distribution Date occurring in November 2035, which is the Distribution Date in the month following the month in which the latest Mortgage Loan maturity date occurs.

Section 2.06

Representations and Warranties of the Depositor .  The Depositor hereby represents, warrants and covenants to the Trustee, the Master Servicer, the Servicer, the Mortgage Loan Originator, the Securities Administrator, and the Credit Risk Manager that as of the date of this Agreement or as of such date specifically provided herein:

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

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

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

ARTICLE III

ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS

Section 3.01

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

(i)

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

(ii)

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

(iii)

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

(iv)

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

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

(b)

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

(c)

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

(d)

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

Section 3.02

Subservicing Agreements between the Servicer and Subservicers .  (a)  The Servicer may enter into subservicing agreements with subservicers (each, a “ Subservicer ”), for the servicing and administration of the Mortgage Loans (“ Subservicing Agreements ”).  The Trustee shall not be required to review or consent to such Subservicing Agreements and shall have no liability in connection therewith.

(b)

Each Subservicer shall be (i) authorized to transact business in the state or states in which the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law to enable the Subservicer to perform its obligations hereunder and under the Subservicing Agreement and (ii) a Freddie Mac or Fannie Mae approved mortgage servicer.  Each Subservicing Agreement must impose on the Subservicer requirements conforming to the provisions set forth in Section 3.08 and provide for servicing of the Mortgage Loans consistent with the terms of this Agreement.  The Servicer will examine each Subservicing Agreement and will be familiar with the terms thereof.  The terms of any Subservicing Agreement will not be inconsistent with any of the provisions of this Agreement.  The Servicer and the Subservicers may enter into and make amendments to the Subservicing Agreements or enter into different forms of Subservicing Agreements; provided , however , that any such amendments or different forms shall be consistent with and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which could be reasonably expected to be materially adverse to the interests of the Trustee, without the consent of the Trustee.  Any variation without the consent of the Trustee from the provisions set forth in Section 3.08 relating to insurance or priority requirements of Subservicing Accounts, or credits and charges to the Subservicing Accounts or the timing and amount of remittances by the Subservicers to the Servicer, are conclusively deemed to be inconsistent with this Agreement and therefore prohibited.  The Servicer shall deliver to the Master Servicer, the Securities Administrator, the Trustee and the Depositor copies of all Subservicing Agreements, and any amendments or modifications thereof, promptly upon the Servicer’s execution and delivery of such instruments.

(c)

As part of its servicing activities hereunder, the Servicer (except as otherwise provided in the last sentence of this paragraph), for the benefit of the Trustee, shall enforce the obligations of each Subservicer under the related Subservicing Agreement, including, without limitation, any obligation to make advances in respect of delinquent payments as required by a Subservicing Agreement.  Such enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing Agreements, and the pursuit of other appropriate remedies, shall be in such form and carried out to such an extent and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans.  The Servicer shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement, to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans or (ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed.

Section 3.03

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

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

Section 3.04

Liability of the Servicer .  Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the Servicer and a Subservicer or reference to actions taken through a Subservicer or otherwise, the Servicer shall remain obligated and primarily liable to the Trustee for the servicing and administering of the Mortgage Loans in accordance with the provisions of Section 3.01 without diminution of such obligation or liability by virtue of such Subservicing Agreements or arrangements or by virtue of indemnification from the Subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Mortgage Loans.  The Servicer shall be entitled to enter into any agreement with a Subservicer for indemnification of the Servicer by such Subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

Section 3.05

No Contractual Relationship between Subservicers and the Master Servicer .  Any Subservicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Subservicer in its capacity as such shall be deemed to be between the Subservicer and the Servicer alone, and neither the Trustee nor the Master Servicer (nor any successor Master Servicer) shall be deemed a party thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Subservicer except as set forth in Section 3.06.  The Servicer shall be solely liable for all fees owed by it to any Subservicer, irrespective of whether the Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.

Section 3.06

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

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

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

Section 3.07

Collection of Certain Mortgage Loan Payments .  (a)  The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any applicable Insurance Policies, follow such collection procedures as it would follow with respect to mortgage loans comparable to the Mortgage Loans and held for its own account.  Consistent with the foregoing and Accepted Servicing Practices, the Servicer may (i) waive any late payment charge or, if applicable, any penalty interest, or (ii) extend the due dates for the Scheduled Payments due on a Mortgage Note for a period of not greater than 180 days; provided , that any extension pursuant to clause (ii) above shall not affect the amortization schedule of any Mortgage Loan for purposes of any computation hereunder, except as provided below.  In the event of any such arrangement pursuant to clause (ii) above, the Servicer shall make timely advances on such Mortgage Loan during such extension pursuant to Section 4.01 and in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall not be required to make any such advances that are Nonrecoverable P&I Advances.  Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or in the judgment of the Servicer, such default is reasonably foreseeable, the Servicer, consistent with the standards set forth in Section 3.01, may also waive, modify or vary any term of such Mortgage Loan (including modifications that would change the Mortgage Rate, forgive the payment of principal or interest, extend the final maturity date of such Mortgage Loan or waive, in whole or in part, a Prepayment Charge), accept payment from the related Mortgagor of an amount less than the Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of principal or interest, postponements, or indulgences collectively referred to herein as “ Forbearance ”); provided , however , that the Servicer’s approval of a modification of a Due Date shall not be considered a modification for purposes of this sentence; provided , further , that the final maturity date of any Mortgage Loan may not be extended beyond the Final Scheduled Distribution Date for the LIBOR Certificates.  The Servicer’s analysis supporting any Forbearance and the conclusion that any Forbearance meets the standards of Section 3.01 shall be reflected in writing in the Servicing File or on the Servicer’s servicing records.  In addition, notwithstanding the foregoing, the Servicer may also waive (or permit a Subservicer to waive), in whole or in part, a Prepayment Charge if such waiver would, in the Servicer’s judgment, maximize recoveries on the related Mortgage Loan or if such Prepayment Charge is (i) not permitted to be collected by applicable law, or the collection of the Prepayment Charge would be considered “predatory” pursuant to written guidance published by any applicable federal, state or local regulatory authority having jurisdiction over such matters, or (ii) the enforceability of such Prepayment Charge is limited (1) by bankruptcy, insolvency, moratorium, receivership or other similar laws relating to creditors’ rights or (2) due to acceleration in connection with a foreclosure or other involuntary payment.  If a Prepayment Charge is waived other than as permitted in this Section 3.07(a), then the Servicer is required to pay the amount of such waived Prepayment Charge, for the benefit of the Holders of the Class P Certificates, by depositing such amount into the related Collection Account together with and at the time that the amount prepaid on the related Mortgage Loan is required to be deposited into the related Collection Account; provided , however , that the Servicer shall not have an obligation to pay the amount of any uncollected Prepayment Charge if the failure to collect such amount is the direct result of inaccurate or incomplete information on the Mortgage Loan Schedule in effect at such time.  The Master Servicer shall have no responsibility for verifying the accuracy of the amount of prepayment charges waived or remitted by the Servicer.

(a)

(i)

The Securities Administrator shall establish and maintain the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to receive any Basis Risk Payment and to secure their limited recourse obligation to pay to the LIBOR Certificateholders Basis Risk Carryover Amounts.

(ii)

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

(c)

(i)

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

(ii)

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

(iii)

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

(iv)

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

(d)

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

(i)

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

(ii)

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

(iii)

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

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

(e)

The Securities Administrator may invest the funds in the Distribution Account during the Securities Administrator Float Period in one or more Permitted Investments in accordance with Section 3.12.  The Securities Administrator may withdraw from the Distribution Account any income or gain earned from the investment of funds deposited therein for its own benefit.

(f)

The Servicer shall give notice to the Securities Administrator of any proposed change of the location of the Collection Account not later than 30 days and not more than 45 days prior to any change thereof and the Securities Administrator shall forward such notice to each Rating Agency and the Depositor.

(g)

In order to comply with its duties under the USA Patriot Act of 2001, the Trustee shall obtain and verify certain information and documentation from the other parties to this Agreement, including, but not limited to, each such party’s name, address and other identifying information.

Section 3.08

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

Section 3.09

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

Section 3.10

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

(i)

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

(ii)

all payments on account of interest (net of the related Servicing Fee) on each Mortgage Loan;

(iii)

all Insurance Proceeds and Condemnation Proceeds to the extent such Insurance Proceeds and Condemnation Proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with the express requirements of law or in accordance with Accepted Servicing Practices, Liquidation Proceeds and Subsequent Recoveries;

(iv)

any amounts required to be deposited pursuant to Section 3.12 in connection with any losses realized on Permitted Investments with respect to funds held in the Collection Account;

(v)

any amounts required to be deposited by the Servicer pursuant to the second paragraph of Section 3.13(a) in respect of any blanket policy deductibles;

(vi)

all proceeds of any Mortgage Loan repurchased or purchased in accordance with this Agreement; and

(vii)

all Prepayment Charges collected by the Servicer.

The foregoing requirements for deposit in the Collection Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, payments in the nature of late payment charges, NSF fees, reconveyance fees, assumption fees and other similar fees and charges need not be deposited by the Servicer in the Collection Account and shall, upon collection, belong to the Servicer as additional compensation for its servicing activities.  In the event the Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.  

(b)

Funds in the Collection Account may be invested in Permitted Investments in accordance with the provisions set forth in Section 3.12.  The Servicer shall give notice to the Securities Administrator, the Master Servicer, the Trustee and the Depositor of the location of the Collection Account maintained by it when established and prior to any change thereof.

Section 3.11

Withdrawals from the Collection Account .  (a) The Servicer shall, from time to time, make withdrawals from the Collection Account for any of the following purposes or as described in Section 4.01:

(i)

on or prior to each Remittance Date, to remit to the Master Servicer (A) the Master Servicing Fee with respect to such Distribution Date and (B) all Available Funds in respect of the related Distribution Date together with all amounts representing Prepayment Charges (payable to the Class P Certificateholders) from the Mortgage Loans received during the related Prepayment Period;

(ii)

to reimburse the Servicer for P&I Advances, but only to the extent of (A) amounts received which represent Late Collections (net of the related Servicing Fees) of Scheduled Payments on Mortgage Loans with respect to which such P&I Advances were made by the Servicer in accordance with the provisions of Section 4.01 and (B) any unreimbursed P&I Advances to the extend of funds held in the Collection Account for future distribution that were not included in Available Funds for the preceding Distribution Date;

(iii)

to pay the Servicer or any Subservicer (A) any unpaid Servicing Fees or (B) any unreimbursed Servicing Advances with respect to each Mortgage Loan, but only to the extent of any Late Collections or other amounts as may be collected by the Servicer from a Mortgagor, or otherwise received with respect to such Mortgage Loan (or the related REO Property);

(iv)

to pay to the Servicer as servicing compensation (in addition to the Servicing Fee) on each Remittance Date any interest or investment income earned on funds deposited in the Collection Account;

(v)

to pay to the Mortgage Loan Originator, with respect to each Mortgage Loan that has previously been repurchased or replaced pursuant to this Agreement, all amounts received thereon subsequent to the date of purchase or substitution, as the case may be;

(vi)

to reimburse the Servicer for (A) any P&I Advance or Servicing Advance previously made which the Servicer has determined to be a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in accordance with the provisions of Section 4.01 and (B) any unpaid Servicing Fees to the extent not recoverable from Late Collections or other amounts received with respect to the related Mortgage Loan under Section 3.11(a)(iii);

(vii)

to pay, or to reimburse the Servicer for Servicing Advances in respect of, expenses incurred in connection with any Mortgage Loan pursuant to Section 3.15;

(viii)

to reimburse the Master Servicer, the Servicer, the Depositor, the Securities Administrator or the Trustee for expenses incurred by or reimbursable to the Master Servicer, the Servicer, the Depositor, the Securities Administrator or the Trustee, as the case may be, pursuant to Section 6.03, Section 7.02, Section 8.05, Section 9.13 or Section 10.02;

(ix)

to reimburse the Master Servicer, the Servicer or the Trustee, as the case may be, for expenses reasonably incurred in respect of the breach or defect giving rise to the repurchase obligation of the Mortgage Loan Originator or the Purchaser under this Agreement that were included in the Repurchase Price of the Mortgage Loan, including any expenses arising out of the enforcement of the repurchase obligation, to the extent not otherwise paid pursuant to the terms hereof;

(x)

to withdraw any amounts deposited in the Collection Account in error;  and

(xi)

to clear and terminate the Collection Account upon termination of this Agreement.

(b)

The Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Collection Account, to the extent held by or on behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix) above.  The Servicer shall provide written notification (as set forth in Section 4.01(d)) to the Master Servicer, on or prior to the next succeeding Remittance Date, upon making any withdrawals from the Collection Account pursuant to subclause (a)(vi) above.

Section 3.12

Investment of Funds in the Collection Account, Escrow Accounts and the Distribution Account .  (a)  The Servicer may invest the funds in the Collection Account and the Escrow Accounts (to the extent permitted by law and the related Mortgage Loan documents) and the Securities Administrator may invest funds in the Distribution Account during the Securities Administrator’s Float Period and shall invest such funds in the Distribution Account (for purposes of this Section 3.12, each such Account is referred to as an “ Investment Account ”), in one or more Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement; provided , however , that any such Permitted Investment managed by or advised by the Securities Administrator or any of its Affiliates may mature, unless payable on demand, no later than the date on which such funds are required to be withdrawn from such account pursuant to this Agreement.  All such Permitted Investments shall be held to maturity, unless payable on demand.  Any investment of funds in an Investment Account shall be made in the name of the Servicer or the Securities Administrator, as applicable.  The Servicer or the Securities Administrator, as applicable, shall be entitled to sole possession over each such investment, and any certificate or other instrument evidencing any such investment shall be delivered directly to the Servicer or the Securities Administrator or its agent, as applicable, together with any document of transfer necessary to transfer title to such investment to the Servicer or the Securities Administrator or its agent, as applicable.  In the event amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Servicer or the Securities Administrator, as applicable, may:

(x)

consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and

(y)

demand payment of all amounts due thereunder that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in an Investment Account.

(b)

All income and gain realized from the investment of funds deposited in the Collection Account or Escrow Account, as applicable, held by or on behalf of the Servicer, shall be for the benefit of the Servicer and shall be subject to its withdrawal in the manner set forth in Section 3.11.  The Servicer shall deposit in the Collection Account or Escrow Account, as applicable, the amount of any loss of principal incurred in respect of any such Permitted Investment made with funds in such accounts immediately upon realization of such loss.