POOLING AND SERVICING AGREEMENT Dated as of May 1, 2005

Pooling and Servicing Agreement

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C-BASS MORTGAGE LOAN ASSE | U.S. BANK NATIONAL ASSOCIATION | LITTON LOAN SERVICING LP | MERRILL LYNCH MORTGAGE INVESTORS, INC

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Title: POOLING AND SERVICING AGREEMENT Dated as of May 1, 2005
Governing Law: New York Date: 6/24/2005

POOLING AND SERVICING AGREEMENT

Dated as of May 1, 2005, Parties: c-bass mortgage loan asse , u.s. bank national association , litton loan servicing lp , merrill lynch mortgage investors inc

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Exhibit 4.1

EXECUTION COPY

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MERRILL LYNCH MORTGAGE INVESTORS, INC.,

Depositor

CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,

Seller

LITTON LOAN SERVICING LP,

Servicer

and

U.S. BANK NATIONAL ASSOCIATION,

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of May 1, 2005

2005-CB3 Trust

C-BASS Mortgage Loan Asset-Backed Certificates, Series 2005-CB3

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TABLE OF CONTENTS

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PAGE

ARTICLE I DEFINITIONS...........................................................................6

Section 1.01 Defined Terms.....................................................................6

Section 1.02 Accounting.......................................................................50

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES......................50

Section 2.01 Conveyance of Mortgage Loans.....................................................50

Section 2.02 Acceptance by Trustee............................................................52

Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller.......................54

Section 2.04 Representations and Warranties of the Seller with Respect to the Mortgage

Loans............................................................................56

Section 2.05 Representations, Warranties and Covenants of the Servicer........................57

Section 2.06 Representations and Warranties of the Depositor..................................59

Section 2.07 Issuance of Certificates and the Uncertificated Regular Interests................60

Section 2.08 Representations and Warranties of the Seller.....................................61

Section 2.09 Covenants of the Seller..........................................................62

ARTICLE III ADMINISTRATION AND SERVICING OF THE TRUST FUND.......................................63

Section 3.01 Servicer to Act as Servicer......................................................63

Section 3.02 Collection of Mortgage Loan Payments.............................................64

Section 3.03 Realization Upon Defaulted Mortgage Loans........................................64

Section 3.04 Collection Account and Distribution Account......................................66

Section 3.05 Permitted Withdrawals From the Collection Account................................67

Section 3.06 Establishment of Escrow Account; Deposits in Escrow Account......................68

Section 3.07 Permitted Withdrawals From Escrow Account........................................69

Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder............69

Section 3.09 Transfer of Accounts.............................................................70

Section 3.10 Maintenance of Hazard Insurance..................................................70

Section 3.11 Maintenance of Mortgage Impairment Insurance Policy..............................71

Section 3.12 Fidelity Bond, Errors and Omissions Insurance....................................71

Section 3.13 Title, Management and Disposition of REO Property and Certain Delinquent

Mortgage Loans...................................................................72

Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements......................73

Section 3.15 Notification of Adjustments......................................................74

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Section 3.16 Optional Purchases of Mortgage Loans by Servicer.................................74

Section 3.17 Trustee to Cooperate; Release of Files...........................................75

Section 3.18 Servicing Compensation...........................................................76

Section 3.19 Annual Statement as to Compliance................................................76

Section 3.20 Annual Independent Certified Public Accountants' Reports.........................77

Section 3.21 Access to Certain Documentation and Information Regarding the Mortgage

Loans............................................................................77

Section 3.22 Reserved.........................................................................77

Section 3.23 Obligations of the Servicer in Respect of Compensating Interest..................77

Section 3.24 Obligations of the Servicer in Respect of Mortgage Interest Rates and

Monthly Payments.................................................................78

Section 3.25 Investment of Funds in the Collection Account and the Distribution

Account..........................................................................78

Section 3.26 Liability of Servicer; Indemnification...........................................79

Section 3.27 Reports of Foreclosure and Abandonment of Mortgaged Properties...................80

Section 3.28 Protection of Assets.............................................................80

Section 3.29 Periodic Filings.................................................................80

Section 3.30 Advance Facility.................................................................82

ARTICLE IV FLOW OF FUNDS........................................................................84

Section 4.01 Interest Distributions...........................................................84

Section 4.02 Distributions of Principal and Monthly Excess Cashflow Amounts...................86

Section 4.03 Allocation of Losses.............................................................94

Section 4.04 Method of Distribution...........................................................95

Section 4.05 Distributions on Book-Entry Certificates.........................................95

Section 4.06 Statements.......................................................................95

Section 4.07 Remittance Reports; Advances.....................................................98

Section 4.08 REMIC Distributions..............................................................99

ARTICLE V THE CERTIFICATES....................................................................102

Section 5.01 The Certificates................................................................102

Section 5.02 Registration of Transfer and Exchange of Certificates...........................103

Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...............................108

Section 5.04 Persons Deemed Owners...........................................................108

Section 5.05 Appointment of Paying Agent.....................................................108

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(continued)

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ARTICLE VI THE SELLER, THE SERVICER AND THE DEPOSITOR..........................................109

Section 6.01 Liability of the Seller, the Servicer and the Depositor.........................109

Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the

Seller, the Servicer or the Depositor...........................................109

Section 6.03 Limitation on Liability of the Servicer and Others..............................109

Section 6.04 Servicer Not to Resign..........................................................110

Section 6.05 Delegation of Duties............................................................111

ARTICLE VII DEFAULT.............................................................................111

Section 7.01 Servicer Events of Termination..................................................111

Section 7.02 Trustee to Act; Appointment of Successor........................................113

Section 7.03 Waiver of Defaults..............................................................114

Section 7.04 Notification to Certificateholders..............................................114

Section 7.05 Survivability of Servicer Liabilities...........................................114

ARTICLE VIII THE TRUSTEE.........................................................................114

Section 8.01 Duties of Trustee...............................................................114

Section 8.02 Certain Matters Affecting the Trustee...........................................116

Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans...........................117

Section 8.04 Trustee May Own Certificates....................................................117

Section 8.05 Seller to Pay Trustee Fees and Expenses.........................................118

Section 8.06 Eligibility Requirements for Trustee............................................118

Section 8.07 Resignation or Removal of Trustee...............................................119

Section 8.08 Successor Trustee...............................................................119

Section 8.09 Merger or Consolidation of Trustee..............................................120

Section 8.10 Appointment of Co-Trustee or Separate Trustee...................................120

Section 8.11 Limitation of Liability.........................................................121

Section 8.12 Trustee May Enforce Claims Without Possession of Certificates...................121

Section 8.13 Suits for Enforcement...........................................................121

Section 8.14 Waiver of Bond Requirement......................................................122

Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.......................122

Section 8.16 Compliance with National Housing Act of 1934....................................122

ARTICLE IX REMIC AND GRANTOR TRUST ADMINISTRATION..............................................122

Section 9.01 REMIC Administration............................................................122

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(continued)

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Section 9.02 Prohibited Transactions and Activities..........................................125

Section 9.03 Indemnification with Respect to Certain Taxes and Loss of REMIC Status..........125

Section 9.04 REO Property....................................................................126

Section 9.05 Grantor Trust Administration....................................................126

ARTICLE X TERMINATION.........................................................................127

Section 10.01 Termination.....................................................................127

Section 10.02 Additional Termination Requirements.............................................128

ARTICLE XI MISCELLANEOUS PROVISIONS............................................................129

Section 11.01 Amendment.......................................................................129

Section 11.02 Recordation of Agreement; Counterparts..........................................130

Section 11.03 Limitation on Rights of Certificateholders......................................130

Section 11.04 Governing Law; Jurisdiction.....................................................131

Section 11.05 Notices.........................................................................131

Section 11.06 Severability of Provisions......................................................131

Section 11.07 Article and Section References..................................................132

Section 11.08 Notice to the Rating Agencies...................................................132

Section 11.09 Further Assurances..............................................................132

Section 11.10 Benefits of Agreement...........................................................133

Section 11.11 Acts of Certificateholders......................................................133

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EXHIBITS:

Exhibit A-1 Form of Class AV-1 Certificates

Exhibit A-2 Form of Class AV-2 Certificates

Exhibit A-3 Form of Class AV-3 Certificates

Exhibit A-4 Form of Class AF-1A Certificates

Exhibit A-5 Form of Class AF-1B Certificates

Exhibit A-6 Form of Class AF-1C Certificates

Exhibit A-7 Form of Class AF-2 Certificates

Exhibit A-8 Form of Class AF-3 Certificates

Exhibit A-9 Form of Class AF-4 Certificates

Exhibit B-1 Form of Class B-1 Certificates

Exhibit B-2 Form of Class B-2 Certificates

Exhibit B-3 Form of Class B-3 Certificates

Exhibit B-4 Form of Class B-4 Certificates

Exhibit B-5-1 Form of Class B-5 Certificates (144A)

Exhibit B-5-2 Form of Class B-5 Certificates (Regulation S)

Exhibit B-6-1 Form of Class B-6 Certificates (144A)

Exhibit B-6-2 Form of Class B-6 Certificates (Regulation S)

Exhibit C-1-1 Form of Class R Certificate

Exhibit C-1-2 Form of Class R-X Certificates

Exhibit C-2 Form of Class M-1 Certificates

Exhibit C-3 Form of Class M-2 Certificates

Exhibit C-4 Form of Class M-3 Certificates

Exhibit C-5 Form of Class M-4 Certificates

Exhibit C-6 Form of Class X Certificates

Exhibit C-7 Form of Class N Certificates

Exhibit D-1 Mortgage Loan Schedule for Group I Mortgage Loans

Exhibit D-2 Mortgage Loan Schedule for Group II Mortgage Loans

Exhibit E Form of Request for Release of Documents

Exhibit F-1 Form of Custodian's Initial Certification

Exhibit F-2 Form of Custodian's Final Certification

Exhibit F-3 Form of Receipt of Mortgage Note

Exhibit G Mortgage Loan Purchase Agreement

Exhibit H Form of Lost Note Affidavit

Exhibit I Form of ERISA Representation

Exhibit J Forms of Investment Letters

Exhibit K Form of Residual Certificate Transfer Affidavit

Exhibit L Form of Transferor Certificate

Exhibit M Monthly Information Provided by Servicer

Exhibit N Form of Certification to be Provided with Form 10-K

Exhibit O Form of Certification to be Provided by Trustee to the Servicer

Exhibit P Form of Cap Contract

Exhibit Q Form of Power of Attorney

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This Pooling and Servicing Agreement is dated as of May 1, 2005 (the

"Agreement"), among MERRILL LYNCH MORTGAGE INVESTORS, INC., as depositor (the

"Depositor"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC, as seller

(the "Seller"), LITTON LOAN SERVICING LP, as servicer (the "Servicer") and U.S.

BANK NATIONAL ASSOCIATION, as trustee (the "Trustee").

PRELIMINARY STATEMENT

The Depositor intends to sell pass-through certificates (collectively,

the "Certificates"), to be issued hereunder in multiple Classes, which in the

aggregate will evidence the entire beneficial ownership interest in the Trust

Fund created hereunder. The Certificates will consist of twenty-three Classes of

Certificates, designated as (i) the Class AV-1, Class AV-2, Class AV-3, Class

AF-1A, Class AF-1B, Class AF-1C, Class AF-2, Class AF-3 and Class AF-4

Certificates, (ii) the Class M-1, Class M-2, Class M-3 and Class M-4

Certificates, (iii) the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5

and Class B-6 Certificates, (iv) the Class N Certificates, (v) the Class X

Certificates, (vi) the Class R Certificates and the Class R-X Certificates.

As provided herein, the Trustee shall elect that the Trust Fund (other

than the Cap Contract, the Reserve Account and the Grantor Trust) be treated for

federal income tax purposes as nine separate real estate mortgage investment

conduits (each a "REMIC" or, in the alternative, "REMIC 1," "REMIC 2," "REMIC

B-1," "REMIC B-2," "REMIC B-3," "REMIC B-4," "REMIC B-5," "REMIC B-6" and "REMIC

X/N" respectively). The REMIC X/N Regular Interests represent all of the

"regular interests" in REMIC X/N. The REMIC B-6 Regular Interests represent all

of the "regular interests" in REMIC B-6. The REMIC B-5 Regular Interests

represent all of the "regular interests" in REMIC B-5. The REMIC B-4 Regular

Interests represent all of the "regular interests" in REMIC B-4. The REMIC B-3

Regular Interests represent all of the "regular interests" in REMIC B-3. The

REMIC B-2 Regular Interests represent all of the "regular interests" in REMIC

B-2. The REMIC B-1 Regular Interests represent all of the "regular interests" in

REMIC B-1. The REMIC 2 Regular Interests represent all of the "regular

interests" in REMIC 2. The REMIC 1 Regular Interests represent all of the

"regular interests" in REMIC 1. Each Class of Cap Carryover Certificates (other

than the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6

Certificates) represents beneficial ownership of the Corresponding REMIC 2

Regular Interest and the right to receive Net WAC Carryover Amounts. The Class

B-1 Certificates represent beneficial ownership of the REMIC B-1 Regular

Interest and the right to receive Net WAC Carryover Amounts. The Class B-2

Certificates represent beneficial ownership of the REMIC B-2 Regular Interest

and the right to receive Net WAC Carryover Amounts. The Class B-3 Certificates

represent beneficial ownership of the REMIC B-3 Regular Interest and the right

to receive Net WAC Carryover Amounts. The Class B-4 Certificates represent

beneficial ownership of the REMIC B-4 Regular Interest and the right to receive

Net WAC Carryover Amounts. The Class B-5 Certificates represent beneficial

ownership of the REMIC B-5 Regular Interest and the right to receive Net WAC

Carryover Amounts. The Class B-6 Certificates represent beneficial ownership of

the REMIC B-6 Regular Interest and the right to receive Net WAC Carryover

Amounts.

For federal income tax purposes, the Class N and Class X Certificates

together represent beneficial ownership of the REMIC X/N X/N Interest subject to

the obligation to pay Net WAC Carryover Amounts. Each of the Class R-1 and Class

R-2 Interests, represented collectively by the Class R Certificates, represents

the sole Class of "residual interest" in REMIC 1 and REMIC 2, respectively, for

purposes of the REMIC Provisions. Each of the Class R-B-1, Class R-B-2, Class

R-B-3, Class R-B-4, Class R-B-5, Class R-B-6 and Class R-X/N Interests,

represented collectively by the Class R-X Certificates, represent the sole Class

of "residual interest" in REMIC B-1, REMIC B-2, REMIC B-3, REMIC B-4, REMIC B-5,

REMIC B-6 and REMIC X/N, respectively, for purposes of the REMIC provisions. The

REMIC 1 Regular Interests will be held as assets of REMIC 2. The REMIC 2 X/N

Interest will be held as the sole asset of REMIC X/N. For federal income tax

purposes, the REMIC X/N X/N Interest will be held as the asset of the Grantor

Trust. The REMIC 2 B-1 Interest will be held as the sole asset of REMIC B-1.

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The REMIC 2 B-2 Interest will be held as the sole asset of REMIC B-2.

The REMIC 2 B-3 Interest will be held as the sole asset of REMIC B-3. The REMIC

2 B-4 Interest will be held as the sole asset of REMIC B-4. The REMIC 2 B-5

Interest will be held as the sole asset of REMIC B-5. The REMIC 2 B-6 Interest

will be held as the sole asset of REMIC B-6. The "latest possible maturity date"

for federal income tax purposes of all interests created hereby will be the

Distribution Date in May 2035.

REMIC 1

The following table specifies the class designation, interest rate, and

initial principal amount for each class of REMIC 1 Interests.

<TABLE>

Related Loan Group or

Designation Interest Rate Initial Principal Amount Related Certificate

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

LT1-AV1 (1) (5) Class AV-1

LT1-AV2 (1) (5) Class AV-2

LT1-AV3 (1) (5) Class AV-3

LT1-AF1A (1) (5) Class AF-1A

LT1-AF1B (1) (5) Class AF-1B

LT1-AF1C (1) (5) Class AF-1C

LT1-AF2 (1) (5) Class AF-2

LT1-AF3 (1) (5) Class AF-3

LT1-AF4 (1) (5) Class AF-4

LT1-M1 (1) (5) Class M-1

LT1-M2 (1) (5) Class M-2

LT1-M3 (1) (5) Class M-3

LT1-M4 (1) (5) Class M-4

LT1-B1 (1) (5) Class B-1

LT1-B2 (1) (5) Class B-2

LT1-B3 (1) (5) Class B-3

LT1-B4 (1) (5) Class B-4

LT1-B5 (1) (5) Class B-5

LT1-B6 (1) (5) Class B-6

LT1-X1 (1) (6) N/A

LT1-IA (1) (7) Loan Group I

LT1-IB (2) (8) Loan Group I

LT1-IIA (1) (7) Loan Group II

LT1-IIB (3) (8) Loan Group II

LT1-X2 (1) (9) N/A

R-1 (4) (4) N/A

</TABLE>

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(1) For any Distribution Date, the interest rate for these interests shall

be the Net Rate.

(2) For any Distribution Date, the interest rate for the LT1-IB Interest

shall be a per annum rate equal to the Group I Net Rate.

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(3) For any Distribution Date, the interest rate for the LT1-IIB Interest

shall be a per annum rate equal to the Group II Net Rate.

(4) The Class R-1 Interest shall represent the sole class of residual

interest in REMIC 1. The Class R-1 Interest will not have a principal

amount or an interest rate. The Class R-1 Interest shall be represented

by the Class R Certificate.

(5) The initial principal amount of these interests shall be an amount

equal to 25% of the initial principal amount of the related

certificates.

(6) The initial principal amount of this interest shall be an amount equal

to the excess of (i) 50% of the aggregate Cut-off Date Principal

Balance of the Mortgage Loans over (ii) the aggregate initial principal

amount of the Marker Interests.

(7) The initial principal amount of these interests shall be an amount

equal to 0.005% of the Group Subordinate Amount of the related Loan

Group as of the first Distribution Date.

(8) The initial principal amount of these interests shall be an amount

equal to 0.005% of the aggregate Cut-off Date Principal Balance of the

related Loan Group.

(9) The initial principal amount of this interest shall be an amount equal

to the excess of (i) 50% of the aggregate Cut-off date Principal

Balance of the Mortgage Loans over (ii) the aggregate initial principal

amount of the Class LT1-IA Interest, Class LT1-IB Interest, Class

LT1-IIA Interest and Class LT1-IIB Interest.

All computations with respect to any REMIC 1 Interest shall be taken

out to ten decimal places.

REMIC 2

The sole assets of REMIC 2 shall be the REMIC 1 Regular Interests. The

regular interests in REMIC 2 shall be the REMIC 2 Regular Interests. The

residual interest in REMIC 2 will be the Class R-2 Interest, which will be

represented by the Class R Certificate.

REMIC B-1

The sole asset of REMIC B-1 shall be the REMIC 2 B-1 Interest. The sole

regular interest in REMIC B-1 will be the REMIC B-1 B-1 Interest. The residual

interest in REMIC B-1 will be the Class R-B-1 Interest, which will be

represented by the Class R-X Certificate.

REMIC B-2

The sole asset of REMIC B-2 shall be the REMIC 2 B-2 Interest. The sole

regular interest in REMIC B-2 will be the REMIC B-2 B-2 Interest. The residual

interest in REMIC B-2 will be the Class R-B-2 Interest, which will be

represented by the Class R-X Certificate.

REMIC B-3

The sole asset of REMIC B-3 shall be the REMIC 2 B-3 Interest. The sole

regular interest in REMIC B-3 will be the REMIC B-3 B-3 Interest. The residual

interest in REMIC B-3 will be the Class R-B-3 Interest, which will be

represented by the Class R-X Certificate.

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REMIC B-4

The sole asset of REMIC B-4 shall be the REMIC 2 B-4 Interest. The sole

regular interest in REMIC B-4 will be the REMIC B-4 B-4 Interest. The residual

interest in REMIC B-4 will be the Class R-B-4 Interest, which will be

represented by the Class R-X Certificate.

REMIC B-5

The sole asset of REMIC B-5 shall be the REMIC 2 B-5 Interest. The sole

regular interest in REMIC B-5 will be the REMIC B-5 B-5 Interest. The residual

interest in REMIC B-5 will be the Class R-B-5 Interest, which will be

represented by the Class R-X Certificate.

REMIC B-6

The sole asset of REMIC B-6 shall be the REMIC 2 B-6 Interest. The sole

regular interest in REMIC B-6 will be the REMIC B-6 B-6 Interest. The residual

interest in REMIC B-6 will be the Class R-B-6 Interest, which will be

represented by the Class R-X Certificate.

REMIC X/N

The sole asset of REMIC X/N shall be the REMIC 2 X/N Interest. The sole

regular interest in REMIC X/N will be the REMIC X/N X/N Interest. The residual

interest in REMIC X/N will be the Class R- X/N Interest, which will be

represented by the Class R-X Certificate.

The following table sets forth (or describes) the Class designation,

Pass-Through Rate and Original Class Certificate Principal Balance or Original

Notional Amount, for each Class of Certificates comprising the interests in the

Trust Fund created hereunder:

<TABLE>

Original Class

Certificate

Principal Balance or Notional Pass-Through Final

Class Amount Rate Maturity Dates

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

AV-1 $166,433,000 (1) June 25, 2035

AV-2 $60,385,000 (2) June 25, 2035

AV-3 $7,391,000 (3) June 25, 2035

AF-1A $10,000,000 (4) June 25, 2035

AF-1B $25,000,000 (5) June 25, 2035

AF-1C $15,194,000 (6) June 25, 2035

AF-2 $20,060,000 (7) June 25, 2035

AF-3 $15,019,000 (8) June 25, 2035

AF-4 $9,475,000 (9) June 25, 2035

M-1 $26,717,000 (10) June 25, 2035

M-2 $14,402,000 (11) June 25, 2035

M-3 $6,470,000 (12) June 25, 2035

M-4 $6,053,000 (13) June 25, 2035

B-1 $5,635,000 (14) June 25, 2035

B-2 $4,800,000 (15) June 25, 2035

B-3 $4,174,000 (16) June 25, 2035

B-4 $3,757,000 (17) June 25, 2035

B-5 $4,174,000 (18) June 25, 2035

B-6 $7,094,000 (19) June 25, 2035

N $13,400,000 (20) 8% N/A

X N/A (20) N/A N/A

R N/A N/A N/A

R -X N/A N/A N/A

Total (21)

</TABLE>

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(1) Interest will accrue on the Class AV-1 Certificates during each

Interest Accrual Period at a rate equal to the least of: (i) the Class

AV-1 Pass-Through Rate, (ii) the Group I Available Funds Cap for such

Distribution Date and (iii) the Group I Maximum Rate Cap.

(2) Interest will accrue on the Class AV-2 Certificates during each

Interest Accrual Period at a rate equal to the least of: (i) the Class

AV-2 Pass-Through Rate, (ii) the Group I Available Funds Cap for such

Distribution Date and (iii) the Group I Maximum Rate Cap.

(3) Interest will accrue on the Class AV-3 Certificates during each

Interest Accrual Period at a rate equal to the least of: (i) the Class

AV-3 Pass-Through Rate, (ii) the Group I Available Funds Cap for such

Distribution Date and (iii) the Group I Maximum Rate Cap.

(4) Interest will accrue on the Class AF-1A Certificates at a rate equal to

the lesser of: (i) the Class AF-1A Pass-Through Rate and (ii) the Group

II Net Rate Cap for such Distribution Date.

(5) Interest will accrue on the Class AF-1B Certificates at a rate equal to

the lesser of: (i) the Class AF-1B Pass-Through Rate and (ii) the Group

II Net Rate Cap for such Distribution Date.

(6) Interest will accrue on the Class AF-1C Certificates at a rate equal to

the lesser of: (i) the Class AF-1C Pass-Through Rate and (ii) the Group

II Net Rate Cap for such Distribution Date.

(7) Interest will accrue on the Class AF-2 Certificates at a rate equal to

the lesser of: (i) the Class AF-2 Pass-Through Rate and (ii) the Group

II Net Rate Cap for such Distribution Date.

(8) Interest will accrue on the Class AF-3 Certificates at a rate equal to

the lesser of: (i) the Class AF-3 Pass-Through Rate and (ii) the Group

II Net Rate Cap for such Distribution Date.

(9) Interest will accrue on the Class AF-4 Certificates at a rate equal to

the lesser of (i) the Class AF-4 Pass-Through Rate and (ii) the Group

II Net Rate Cap for such Distribution Date.

(10) Interest will accrue on the Class M-1 Certificates at a rate equal to

the least of: (i) the Class M-1 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(11) Interest will accrue on the Class M-2 Certificates at a rate equal to

the least of: (i) the Class M-2 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(12) Interest will accrue on the Class M-3 Certificates at a rate equal to

the least of: (i) the Class M-3 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(13) Interest will accrue on the Class M-4 Certificates at a rate equal to

the least of: (i) the Class M-4 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(14) Interest will accrue on the Class B-1 Certificates at a rate equal to

the least of: (i) the Class B-1 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(15) Interest will accrue on the Class B-2 Certificates at a rate equal to

the least of: (i) the Class B-2 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

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(16) Interest will accrue on the Class B-3 Certificates at a rate equal to

the least of: (i) the Class B-3 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(17) Interest will accrue on the Class B-4 Certificates at a rate equal to

the least of: (i) the Class B-4 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(18) Interest will accrue on the Class B-5 Certificates at a rate equal to

the least of: (i) the Class B-5 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(19) Interest will accrue on the Class B-6 Certificates at a rate equal to

the least of: (i) the Class B-6 Pass-Through Rate, (ii) the Subordinate

Rate Cap for such Distribution Date and (iii) the Subordinate Maximum

Rate Cap.

(20) The Class N and Class X Certificates, collectively, represent the

beneficial ownership of the REMIC X/N X/N Interest, subject to the

obligation to make payments in respect of Net WAC Carryover Amounts.

(21) Exclusive of the Class N Notional Amount. The Class N Original Notional

Amount is $13,400,000.

ARTICLE I

DEFINITIONS

Section 1.01 Defined Terms.

Whenever used in this Agreement or in the Preliminary Statement, the

following words and phrases, unless the context otherwise requires, shall have

the meanings specified in this Article. Unless otherwise specified, interest on

the Class AV-1, Class AV-2, Class AV-3, Class AF-1C, Class M-1, Class M-2, Class

M-3, Class M-4, Class B-1, Class B-2, Class B-3 and Class B-4 Certificates will

be calculated on the basis of the actual number of days in the related Interest

Accrual Period and a 360-day year. Interest on the Class AF-1A, Class AF-1B,

Class AF-2, Class AF-3, Class AF-4, Class B-5, Class B-6, Class N and Class X

Certificates and the REMIC 1 Regular Interests and the REMIC 2 X/N Interest will

be calculated on the basis of a 360-day year consisting of twelve 30-day months.

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

"60+ Day Delinquent Loan": With respect to any date of determination,

each Mortgage Loan with respect to which any portion of a Monthly Payment is, as

of the last day of the prior Collection Period, two months or more past due,

each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for

which the Mortgagor has filed for bankruptcy after the Closing Date.

"Account": Any of the Collection Account, the Distribution Account and

the Escrow Account.

"Accrued Certificate Interest": With respect to each Distribution Date

and Class of Certificates, an amount equal to the interest accrued at the

applicable rate set forth or described for such Class in the table in the

Preliminary Statement during the related Interest Accrual Period on the

Certificate Principal Balance or Notional Amount of such Class of Certificates,

reduced by such Class's Interest Percentage of Relief Act Interest Shortfalls

for such Distribution Date.

<PAGE>

"Adjustment Date": With respect to each Group I Mortgage Loan, each

adjustment date, on which the Mortgage Interest Rate of a Group I Mortgage Loan

changes pursuant to the related Mortgage Note. The first Adjustment Date

following the Cut-off Date as to each Group I Mortgage Loan is set forth in the

Mortgage Loan Schedule for the Group I Mortgage Loans.

"Adjustment Period": As defined in the Preliminary Statement.

"Advance": As to any Mortgage Loan or REO Property, any advance made by

the Servicer in respect of any Distribution Date pursuant to Section 4.07.

"Advance Facility": As defined in Section 3.30(a) hereof.

"Advance Facility Notice": As defined in Section 3.30(b) hereof.

"Advance Financing Person": As defined in Section 3.30(a) hereof.

"Advance Reimbursement Amounts": As defined in Section 3.30(b) hereof.

"Adverse REMIC Event": As defined in Section 9.01(f) hereof.

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

controlled by or under common control with such Person. For purposes of this

definition, "control" means the power to direct the management and policies of a

Person, directly or indirectly, whether through ownership of voting securities,

by contract or otherwise and "controlling" and "controlled" shall have meanings

correlative to the foregoing.

"Agreement": This Pooling and Servicing Agreement and all amendments

and supplements hereto.

"Applicable Regulations": As to any Mortgage Loan, all federal, state

and local laws, statutes, rules and regulations applicable thereto, including

with respect to each FHA Loan, the FHA Regulations and the related FHA Insurance

Contract and with respect to each VA Loan, the VA Regulations and the related VA

Guaranty.

"Applied Realized Loss Amount": With respect to each Distribution Date,

the excess, if any, of (a) the aggregate of the Certificate Principal Balances

of the Certificates (after giving effect to all distributions on such

Distribution Date) over (b) the Pool Balance as of the end of the related

Collection Period.

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

equivalent instrument, in recordable form, which is sufficient under the laws of

the jurisdiction wherein the related Mortgaged Property is located to reflect or

record the sale of the Mortgage.

"Available Funds": As to any Distribution Date, an amount equal to the

excess of (i) the sum of (a) the aggregate of the Monthly Payments due during

the related Collection Period and received by the Servicer on or prior to the

related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds,

Condemnation Proceeds, Principal Prepayments, Substitution Adjustment Amounts,

the Purchase Price for any repurchased Mortgage Loan, the Termination Price with

respect to the termination of the Trust pursuant to Section 10.01 hereof, any

Reimbursement Amount or Subsequent Recovery deposited to the Collection Account

and other unscheduled recoveries of principal and interest (excluding prepayment

penalties) in respect of the Mortgage Loans during the related Prepayment

Period, (c) the aggregate of any amounts received in respect of an REO Property

withdrawn from any REO Account and deposited in the Collection Account for such

Distribution Date, (d) any Compensating Interest for such Distribution Date, and

(e) the aggregate of any Advances made by the Servicer for such Distribution

Date over (ii) the sum of (a) amounts reimbursable or payable to the Servicer

pursuant to Section 3.05, (b) Stayed Funds, (c) the Servicing Fee and (d)

amounts deposited in the Collection Account or the Distribution Account, as the

case may be, in error.

<PAGE>

"Balloon Mortgage Loan": A Mortgage Loan that provides for the payment

of the unamortized principal balance of such Mortgage Loan in a single payment

at the maturity of such Mortgage Loan that is substantially greater than the

preceding monthly payment.

"Balloon Payment": A payment of the unamortized principal balance of a

Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is

substantially greater than the preceding Monthly Payment.

"Bankruptcy Code": Title 11 of the United States Code, as amended.

"Book-Entry Certificates": Any of the Certificates that shall be

registered in the name of the Depository or its nominee, the ownership of which

is reflected on the books of the Depository or on the books of a Person

maintaining an account with the Depository (directly, as a "Depository

Participant," or indirectly, as an indirect participant in accordance with the

rules of the Depository and as described in Section 5.02 hereof). On the Closing

Date, the Class AV-1, Class AV-2, Class AV-3, Class AF-1A, Class AF-1B, Class

AF-1C, Class AF-2, Class AF-3, Class AF-4, Class M-1, Class M-2, Class M-3,

Class M-4, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6

Certificates shall be Book-Entry Certificates.

"Book-Entry Regulation S Global Securities": As defined in Section

5.01.

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

which banking institutions in the State of Delaware, the State of New York, the

State of Texas or in the city in which the Corporate Trust Office of the Trustee

is located are authorized or obligated by law or executive order to be closed.

"Cap": Any of the Group I Available Funds Cap, the Group II Net Rate

Cap, the Group I Maximum Rate Cap, the Subordinate Rate Cap or the Subordinate

Maximum Rate Cap.

"Cap Carryover Certificates": The Class AV-1, Class AV-2, Class AV-3,

Class M-1, Class M-2, Class M-3, Class M-4, Class B-1, Class B-2, Class B-3,

Class B-4, Class B-5 and Class B-6 Certificates.

"Cap Contract": The confirmation and agreement and any related

confirmation thereto, between the Trust Fund or Trustee and the Cap Contract

Counterparty (in the form of Exhibit P hereto).

"Cap Contract Counterparty": Barclays Bank PLC.

"Cap Contract Notional Balance": With respect to any Distribution Date,

the Cap Contract Notional Balance set forth for such Distribution Date on the

attachment to the Cap Contract attached hereto.

"Cap Contract Termination Date": The day after the Distribution Date in

November 2008.

"Cap Rate: With respect to each Distribution Date with respect to

which payments are received on the Cap Contract, a rate equal to the lesser of

LIBOR and 9.450% per annum.

"Certificate": Any Regular Certificate or Residual Certificate.

<PAGE>

"Certificate Custodian": Initially, U.S. Bank National Association;

thereafter any other Certificate Custodian acceptable to the Depository and

selected by the Trustee.

"Certificate Owner": With respect to each Book-Entry Certificate, any

beneficial owner thereof.

"Certificate Principal Balance": With respect to any Class of

Certificates (other than the Class N, Class X and Residual Certificates) and any

Distribution Date, the Original Class Certificate Principal Balance reduced by

the sum of (i) all amounts actually distributed in respect of principal of such

Class on all prior Distribution Dates and (ii) Applied Realized Loss Amounts

allocated thereto. The Class N, Class X and Residual Certificates do not have a

Certificate Principal Balance. With respect to any Certificate (other than a

Class X, Class N or a Residual Certificate) of a Class and any Distribution

Date, the portion of the Certificate Principal Balance of such Class represented

by such Certificate equal to the product of the Percentage Interest evidenced by

such Certificate and the Certificate Principal Balance of such Class.

Notwithstanding the foregoing on any Distribution Date relating to a Collection

Period in which a Subsequent Recovery has been received by the Servicer, the

Certificate Principal Balance of any Class of Certificates then outstanding for

which any Applied Realized Loss Amount has been allocated will be increased, in

order of seniority, by an amount equal to the lesser of (i) the Unpaid Realized

Loss Amount for such Class of Certificates and (ii) the amount of any Subsequent

Recovery allocable to principal distributed on such date to the

Certificateholders (reduced by the amount of the increase in the Certificate

Principal Balance of any more senior Class of Certificates pursuant to this

sentence on such Distribution Date).

"Certificate Register" and "Certificate Registrar": The register

maintained and registrar appointed pursuant to Section 5.02 hereof.

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

is registered in the Certificate Register, except that a Disqualified

Organization or Disqualified Non-U.S. Person shall not be a Holder of a Residual

Certificate for any purpose hereof.

"Class": Collectively, Certificates or REMIC Regular Interests which

have the same priority of payment and bear the same class designation and the

form of which is identical except for variation in the Percentage Interest

evidenced thereby.

"Class AF-1A Pass-Through Rate": For each Distribution Date, (i) on or

prior to the Optional Termination Date, 4.268% per annum and (ii) following the

Optional Termination Date, 4.768% per annum, subject in each case to a cap equal

to the Group II Net Rate Cap.

"Class AF-1B Pass-Through Rate": For each Distribution Date, (i) on or

prior to the Optional Termination Date, 5.416% per annum and (ii) following the

Optional Termination Date, 5.916% per annum, subject in each case to a cap equal

to the Group II Net Rate Cap.

"Class AF-1C Certificate Margin": For each Distribution Date (i) on or

prior to the Optional Termination Date, 0.13% per annum, and (ii) following the

Optional Termination Date, 0.26% per annum.

"Class AF-1C Pass-Through Rate": For each Distribution Date, the lesser

of (i) LIBOR as of the related LIBOR Determination Date plus the Class AF-1C

Certificate Margin and (ii) the Group II Net Rate Cap.

<PAGE>

"Class AF-2 Pass-Through Rate": For each Distribution Date (i) on or

prior to the Optional Termination Date, 4.447% per annum, and (ii) following the

Optional Termination Date, 4.947% per annum, subject in either case to a cap

equal to the Group II Net Rate Cap.

"Class AF-3 Pass-Through Rate": For each Distribution Date (i) on or

prior to the Optional Termination Date, 5.109% per annum, and (ii) following the

Optional Termination Date, 5.609% per annum, subject in either case to a cap

equal to the Group II Net Rate Cap.

"Class AF-4 Lockout Distribution Amount": For any Distribution Date,

the product of (x) the Class AF-4 Lockout Distribution Percentage and (y) the

Class AF-4 Pro rata Distribution Amount. In no event shall the Class AF-4

Lockout Distribution Amount for a Distribution Date exceed the Group II

Principal Distribution Amount for such Distribution Date or the Certificate

Principal Balance of the Class AF-4 Certificates immediately prior to such

Distribution Date.

"Class AF-4 Lockout Percentage" means, for a Distribution Date in any

period listed in the table below, the applicable percentage listed opposite such

period:

Distribution Dates Lockout Percentage

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

June 2005 through and including May 2008 0%

June 2008 through and including May 2010 45%

June 2010 through and including May 2011 80%

June 2011 through and including May 2012 100%

June 2012 and thereafter 300%

"Class AF-4 Pass-Through Rate": For each Distribution Date, (i) on or

prior to the Optional Termination Date, 4.725% per annum, and (ii) following the

Optional Termination Date, 5.225% per annum, subject in each case to a cap equal

to the Group II Net Rate Cap.

"Class AF-4 Pro Rata Distribution Amount" means, for any Distribution

Date, an amount equal to the product of (x) a fraction, the numerator of which

is the Certificate Principal Balance of the Class AF-4 Certificates immediately

prior to such Distribution Date and the denominator of which is the aggregate

Certificate Principal Balance of the Class AF-1A, Class AF-1B, Class AF-1C,

Class AF-2, Class AF-3 and Class AF-4 Certificates immediately prior to that

Distribution Date and (y) the Group II Principal Distribution Amount for that

Distribution Date.

"Class AV-1 Certificate Margin": For each Distribution Date (i) on or

prior to the Optional Termination Date, 0.100% per annum, and (ii) following the

Optional Termination Date, 0.200% per annum.

"Class AV-1 Pass-Through Rate": For each Distribution Date, the least

of (i) LIBOR as of the related LIBOR Determination Date, plus the Class AV-1

Certificate Margin, (ii) the Group I Available Funds Cap and (iii) the Group I

Maximum Rate Cap.

<PAGE>

"Class AV-2 Certificate Margin": For each Distribution Date, (i) on or

prior to the Optional Termination Date, 0.230% per annum and (ii) following the

Optional Termination Date, 0.460% per annum.

"Class AV-2 Pass-Through Rate": For each Distribution Date, the least

of (i) LIBOR as of the related LIBOR Determination Date plus the Class AV-2

Certificate Margin, (ii) the Group I Available Funds Cap and (iii) the Group I

Maximum Rate Cap.

"Class AV-3 Certificate Margin": For each Distribution Date, (i) on or

prior to the Optional Termination Date, 0.350% per annum and (ii) following the

Optional Termination Date, 0.700% per annum.

"Class AV-3 Pass-Through Rate": For each Distribution Date, the least

of (i) LIBOR as of the related LIBOR Determination Date plus the Class AV-3

Certificate Margin, (ii) the Group I Available Funds Cap and (iii) the Group I

Maximum Rate Cap.

"Class A Certificate": Any one of the Certificates with an "A"

designated on the face thereof substantially in the form annexed hereto as

Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7, A-8 and A-9, executed by the Trustee

on behalf of the Trust and authenticated and delivered by the Certificate

Registrar, representing the right to distributions as set forth herein and

therein.

"Class A Certificateholders": Collectively, the Holders of the Class A

Certificates.

"Class A Interest Carry Forward Amount": For any Distribution Date, the

sum of the Interest Carry Forward Amounts for the Class A Certificates for such

Distribution Date.

"Class A Principal Distribution Amount": As of any Distribution Date

(a) prior to the Stepdown Date or with respect to which a Trigger Event is in

effect, the Principal Distribution Amount and (b) on or after the Stepdown Date

and as long as a Trigger Event is not in effect, the excess of (x) the sum of

the Certificate Principal Balances of the Class A Certificates immediately prior

to such Distribution Date over (y) the lesser of (A) the product of (i) 57.60%

and (ii) the Pool Balance as of the last day of the related Collection Period

and (B) the Pool Balance as of the last day of the related Collection Period

minus the product of 0.50% and the Pool Balance on the Cut-off Date.

"Class B Certificate": Any one of the Certificates with a "B"

designated on the face thereof substantially in the form annexed hereto as

Exhibits B-1, B-2, B-3, B-4, B-5 and B-6, executed by the Trustee on behalf of

the Trust and authenticated and delivered by the Certificate Registrar,

representing the right to distributions as set forth herein and therein.

"Class B Certificateholders": Collectively, the Holders of the Class B

Certificates.

"Class B-1 Applied Realized Loss Amount": As to the Class B-1

Certificates and as of any Distribution Date, the lesser of (x) the Certificate

Principal Balance thereof (after taking into account the distribution of the

Principal Distribution Amount on such Distribution Date, but prior to the

application of the Class B-1 Applied Realized Loss Amount, if any, on such

Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as

of such Distribution Date over (ii) the sum of the Class B-2 Applied Realized

Loss Amount, the Class B-3 Applied Realized Loss Amount, the Class B-4 Applied

Realized Loss Amount, the Class B-5 Applied Realized Loss Amount and the Class

B-6 Applied Realized Loss Amount, in each case as of such Distribution Date.

<PAGE>

"Class B-1 Certificate Margin": For each Distribution Date (i) on or

prior to the Optional Termination Date, 1.200% per annum, and (ii) following the

Optional Termination Date, 1.800% per annum.

"Class B-1 Pass-Through Rate": For each Distribution Date, the least of

(i) LIBOR as of the related LIBOR Determination Date, plus the Class B-1

Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate

Maximum Rate Cap.

"Class B-1 Principal Distribution Amount": As of any Distribution Date

on or after the Stepdown Date and as long as a Trigger Event is not in effect,

the excess of (x) the sum of (i) the sum of the Certificate Principal Balances

of the Class A Certificates (after taking into account the payment of the Class

A Principal Distribution Amount on such Distribution Date), (ii) the Certificate

Principal Balance of the Class M-1 Certificates (after taking into account the

payment of the Class M-1 Principal Distribution Amount on such Distribution

Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates

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

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

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

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

Principal Balance of the Class M-4 Certificates (after taking into account the

payment of the Class M-4 Principal Distribution Amount on such Distribution

Date), and (vi) the Certificate Principal Balance of the Class B-1 Certificates

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

product of (i) 86.00% and (ii) the Pool Balance as of the last day of the

related Collection Period and (B) the Pool Balance as of the last day of the

related Collection Period minus the product of 0.50% and the Pool Balance on the

Cut-off Date.

"Class B-1 Realized Loss Amortization Amount": As to the Class B-1

Certificates and as of any Distribution Date, the lesser of (x) the Unpaid

Realized Loss Amount for the Class B-1 Certificates as of such Distribution Date

and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum

of the amounts described in Section 4.02(b)(i) through (xvii) hereof, in each

case for such Distribution Date.

"Class B-2 Applied Realized Loss Amount": As to the Class B-2

Certificates and as of any Distribution Date, the lesser of (x) the Certificate

Principal Balance thereof (after taking into account the distribution of the

Principal Distribution Amount on such Distribution Date, but prior to the

application of the Class B-2 Applied Realized Loss Amount, if any, on such

Distribution Date) and (y) the excess of (i) the Applied Realized Loss Amount as

of such Distribution Date over (ii) the sum of the Class B-3 Applied Realized

Loss Amount, the Class B-4 Applied Realized Loss Amount, the Class B-5 Applied

Realized Loss Amount and the Class B-6 Applied Realized Loss Amount, in each

case as of such Distribution Date.

"Class B-2 Certificate Margin": For each Distribution Date (i) on or

prior to the Optional Termination Date, 1.300% per annum, and (ii) following the

Optional Termination Date, 1.950% per annum.

"Class B-2 Pass-Through Rate": For each Distribution Date, the least of

(i) LIBOR as of the related LIBOR Determination Date, plus the Class B-2

Certificate Margin, (ii) the Subordinate Rate Cap and (iii) the Subordinate

Maximum Rate Cap.

"Class B-2 Principal Distribution Amount": As of any Distribution Date