FLOW MORTGAGE LOAN PURCHASE, WARRANTIES AND SERVICING AGREEMENT

Purchaser

Company

FLOW MORTGAGE LOAN PURCHASE, WARRANTIES

AND SERVICING AGREEMENT

Dated as of March 1, 2006

This is a Flow Mortgage Loan Purchase, Warranties and Servicing Agreement (this “Agreement”), dated as of March 1, 2006, by and between Lehman Brothers Bank, FSB, as purchaser (the “ Purchaser ”), and Countrywide Home Loans, Inc., as seller and servicer (the “ Company ”).

WHEREAS, the Company has agreed to sell from time to time to the Purchaser, and the Purchaser has agreed to purchase from time to time from the Company, certain fixed and adjustable rate residential first and second lien mortgage loans (the “Mortgage Loans”) on a servicing retained basis as described herein, and which shall be delivered as whole loans on the related Closing Date, as defined below;

WHEREAS, each Mortgage Loan will be secured by a mortgage, deed of trust or other security instrument creating a first or second lien on a residential dwelling located in the jurisdiction indicated on the related Mortgage Loan Schedule; and

WHEREAS, the Purchaser and the Company wish to prescribe the manner of conveyance, servicing and control of the Mortgage Loans.

NOW, THEREFORE, in consideration of the premises and mutual agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Purchaser and the Company agree as follows:

The following terms are defined as follows (except as otherwise agreed in writing by the parties):

Accepted Servicing Practices : With respect to any Mortgage Loan, those mortgage servicing practices (i) of prudent mortgage lending institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located and (ii) in accordance with all applicable state, federal and local laws, rules and regulations.

Acknowledgment and Conveyance Agreement: The agreement, substantially in the form of Exhibit A-1 hereto to be executed by the Company and the Purchaser on each Closing Date.

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

Agency Transfer : The sale or transfer by Purchaser of some or all of the Mortgage Loans to Fannie Mae under its Cash Purchase Program or its MBS Swap Program (Special Servicing Option) or to Freddie Mac under its Freddie Mac Cash Program or Gold PC Program, retaining the Company as “servicer” thereunder.

Agreement : This Flow Mortgage Loan Purchase, Warranties and Servicing Agreement and all amendments hereof and supplements hereto.

ALTA : The American Land Title Association or any successor thereto.

Ancillary Income : All income derived from the Mortgage Loans, excluding Servicing Fees and Prepayment Charges attributable to the Mortgage Loans, including but not limited to, late charges, fees received with respect to checks or bank drafts returned by the related bank for non-sufficient funds, assumption fees, optional insurance administrative fees, Prepayment Interest Excess amounts and all other incidental fees and charges.

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 or the sale price of the related Mortgaged Property, whichever is less.

ARM Mortgage Loan : An adjustable rate Mortgage Loan.

Assignment of Mortgage : An assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage to the Purchaser, or in the case of a MERS Designated Mortgage Loan, a confirmed electronic transmission to MERS, identifying a transfer of ownership of the related Mortgage to the Purchaser or its designee.

Balloon Mortgage Loan : Any Mortgage Loan wherein the Mortgage Note matures prior to full amortization and requires a final and accelerated payment of principal.

BIF : The Bank Insurance Fund, or any successor thereto.

BPO : A broker’s price opinion obtained by the Purchaser.

Business Day : Any day other than (i) a Saturday or Sunday, or (ii) a day on which banking and savings and loan institutions in the State of New York, Texas or California are authorized or obligated by law or executive order to be closed.

Closing Date : Means a date on which the Company shall sell and the Purchaser shall purchase Mortgage Loans under this Agreement as set forth in the related Purchase Price and Terms Letter.

Code : The Internal Revenue Code of 1986, as it may be amended from time to time or any successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto.

Combined Loan-to-Value Ratio or CLTV : With respect to any Second Lien Mortgage Loan, the ratio (expressed as a percentage) of (a) the sum of (i) the outstanding principal balance of the Mortgage Loan at origination and (ii) the original principal amount of any related First Lien Mortgage Loan (as of the origination date of the Second Lien Mortgage Loan) and (b) the lesser of (i) the Appraised Value of the Mortgaged Property and (ii) if the Mortgage Loan was made to finance the acquisition of the related Mortgaged Property, the purchase price of the Mortgaged Property.

Commission : The United States Securities and Exchange Commission.

Company : Countrywide Home Loans, Inc., or its successor in interest or assigns, or any successor to the Company under this Agreement appointed as herein provided.

Condemnation Proceeds : All awards or settlements in respect of a Mortgaged Property, partial or entire, by exercise of the power of eminent domain or condemnation, to the extent not required to be released to a Mortgagor in accordance with the terms of the related Mortgage Loan Documents.

Custodial Account : The separate trust account created and maintained pursuant to Section 5.04.

Custodial Agreement : The agreement(s) governing the retention of the originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan Documents. If more than one Custodial Agreement is in effect at any given time, all of the individual Custodial Agreements shall collectively be referred to as the “ Custodial Agreement. ”

Custodian : The custodian under the Custodial Agreement, or its successor in interest or assigns or any successor to the Custodian under the Custodial Agreement, as therein provided.

Customer Information : The nonpublic personal information (as defined in 15 U.S.C. § 6809(4)) of the Mortgagors held or received by the Company in connection with the performance of its obligations under this Agreement.

Cut-off Date : With respect to any Mortgage Loan purchased on a Closing Date, the date as may be set forth in the related Purchase Price and Terms Letter.

Deleted Mortgage Loan : A Mortgage Loan which is repurchased by the Company in accordance with the terms of this Agreement or which is, in the case of a substitution pursuant to Section 4.03, replaced or to be replaced with a Qualified Substitute Mortgage Loan.

Determination Date : The 15th day (or if such 15th day is not a Business Day, the Business Day immediately following such 15th day) of the month of the related Remittance Date.

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

Due Period : With respect to each Remittance Date, the period commencing on the second day of the month preceding the month of the Remittance Date and ending on the first day of the month of the Remittance Date.

Eligible Investments : Any one or more of the obligations and securities listed below which investment provides for a date of maturity not later than the Determination Date in each month:

(i)   direct obligations of, and obligations fully guaranteed by, the United States of America, or any agency or instrumentality of the United States of America the obligations of which are backed by the full faith and credit of the United States of America; and

(ii)   federal funds, demand and time deposits in, certificates of deposits of, or bankers’ acceptances issued by, any depository institution or trust company incorporated or organized under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state banking authorities, so long as at the time of such investment or contractual commitment providing for such investment the commercial paper or other short-term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is the principal subsidiary of a holding company, the commercial paper or other short-term debt obligations of such holding company) are rated “P-1” by Moody’s Investors Service, Inc. and the long-term debt obligations of such holding company) are rated “P-1” by Moody’s Investors Service, Inc. and the long-term debt obligations of such depository institution or trust company (or, in the case of a depository institution or trust company which is the principal subsidiary of a holding company, the long-term debt obligations of such holding company) are rated at least “Aa” by Moody’s Investors Service, Inc.;

provided , however , that no such instrument shall be an Eligible Investment if such instrument evidences either (i) a right to receive only interest payments with respect to the obligations underlying such instrument, or (ii) both principal and interest payments derived from obligations underlying such instrument and the principal and interest payments with respect to such instrument provide a yield to maturity of greater than 120% of the yield to maturity at par of such underlying obligations; provided, further, that upon a Pass-Through Transfer, the Eligible Investments permitted thereunder shall be set forth in the related Reconstitution Agreement, if amended by such Reconstitution Agreement.

Notwithstanding anything to the contrary contained herein, with respect to Mortgage Loans subject to an Agency Transfer (if applicable) or a Pass-Through Transfer, in the event that the applicable Reconstitution Agreement has a more limiting definition of “Eligible Investments”, then the definition contained in such Reconstitution Agreement shall apply to such Mortgage Loans, if agreed upon by the Company.

Errors and Omissions Insurance Policy : An errors and omissions insurance policy to be maintained by the Company pursuant to Section 5.12.

Escrow Account : The separate account or accounts created and maintained pursuant to Section 5.06.

Escrow Payments : With respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage Loan.

Event of Default : Any one of the conditions or circumstances enumerated in Section 10.01.

Fannie Mae : Fannie Mae, or any successor thereto.

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

FICO Score : A statistical credit score obtained by mortgage lenders in connection with the loan application to help assess a Mortgagor’s creditworthiness.

Fidelity Bond : A fidelity bond to be maintained by the Company pursuant to Section 5.12.

First Lien : With respect to any Second Lien Mortgage Loan, the mortgage loan relating to the corresponding Mortgaged Property having a first priority lien.

Freddie Mac : Freddie Mac, or any successor thereto.

Gross Margin : With respect to each ARM Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note which amount is added to the Index in accordance with the terms of the related Mortgage Note to determine, on each Interest Rate Adjustment Date, the Mortgage Interest Rate for such Mortgage Loan.

Index : With respect to each ARM Mortgage Loan, the index identified in the related Purchase Price and Terms Letter.

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

Interim Funder : With respect to each MERS Designated Mortgage Loan, the Person named on the MERS System as the interim funder pursuant to the MERS Procedures Manual.

Interest Rate Adjustment Date : The date on which an adjustment to the Mortgage Interest Rate on a Mortgage Note becomes effective.

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.

Lifetime Rate Cap : The provision of the Mortgage Note related to each ARM Mortgage Loan which provides for an absolute maximum Mortgage Interest Rate thereunder as set forth on the related Mortgage Loan Schedule and/or the related Mortgage Note.

Liquidation Proceeds : Cash, other than Insurance Proceeds, received in connection with the liquidation of a defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise, or the sale of the related Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the Mortgage Loan.

Loan-to-Value Ratio or LTV : With respect to any Mortgage Loan, the ratio of the outstanding principal amount of the Mortgage Loan as of the related origination Date to the lesser of (a) the Appraised Value of the Mortgaged Property and (b) if the Mortgage Loan was made to finance the acquisition of the related Mortgaged Property, the purchase price of the Mortgaged Property.

LPMI Loan :   A Mortgage Loan with a LPMI Policy.

LPMI Policy :   A policy of mortgage guaranty insurance as obtained by the Purchaser, issued by a Qualified Insurer pursuant to which the related premium is to be paid by the Company from payments of interest made by the Mortgagor.

LPMI Fee : With respect to each LPMI Loan, the portion of the Mortgage Interest Rate as set forth on the related Mortgage Loan Insurance Coverage Schedule as provided by the Purchaser to the Company (which shall be payable solely from the interest portion of Monthly Payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds), which, during such period prior to the required cancellation of the LPMI Policy, shall be used to pay the premium due on the related LPMI Policy.

Master Servicer : Has the meaning set forth in Section 12.22.

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

MERS Designated Mortgage Loan : Mortgage Loans for which (a) the Company has designated MERS as the mortgagee of record, as nominee for the Company and (b) the Company has designated or will designate the Purchaser as the Investor on the MERS System.

MERS Identification Number : The eighteen digit number permanently assigned to each MERS Designated Mortgage Loan.

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

MERS System : MERS Electronic Registration Systems, Inc., or any successor thereto.

Monthly Advance : The portion of Monthly Payment delinquent with respect to each Mortgage Loan at the close of business on the Determination Date required to be advanced by the Company pursuant to Section 6.03 on the Business Day immediately preceding the Remittance Date of the related month.

Monthly Payment : The scheduled monthly payment of principal and interest on a Mortgage Loan.

Mortgage : The mortgage, deed of trust or other instrument securing a Mortgage Note, which creates a first or second lien on an unsubordinated estate in fee simple in real property securing the Mortgage Note or a lien upon a leasehold estate, as the case may be.

Mortgage File : The items pertaining to a particular Mortgage Loan referred to in Exhibit B hereto, and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

Mortgage Impairment Insurance Policy : A mortgage impairment or blanket hazard insurance policy as described in Section 5.11.

Mortgage Interest Rate : With respect to each fixed rate Mortgage Loan, the fixed annual rate of interest borne on a Mortgage Note. With respect to each ARM Mortgage Loan, the annual rate of interest borne on a Mortgage Note, as adjusted from time to time in accordance with the provisions of the Mortgage Note.

Mortgage Interest Rate Cap : With respect to each ARM Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.

Mortgage Loan : An individual Mortgage Loan which is the subject of this Agreement, each Mortgage Loan originally sold and subject to this Agreement being identified on the Mortgage Loan Schedule annexed as Annex 1 to the related Acknowledgment and Conveyance Agreement, which Mortgage Loan includes without limitation the Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan, except for the servicing rights related thereto which are retained by the Company.

Mortgage Loan Documents : The documents contained in the Mortgage File pertaining to each Mortgage Loan.

Mortgage Loan Package : A group of Mortgage Loans sold to the Purchaser by the Company on a Closing Date and set forth on the Mortgage Loan Schedule annexed to the related Acknowledgment and Conveyance Agreement.

Mortgage Loan Remittance Rate : With respect to each Mortgage Loan, the annual rate of interest remitted to the Purchaser, which shall be equal to the Mortgage Interest Rate minus the Servicing Fee Rate.

Mortgage Loan Schedule : A schedule of Mortgage Loans annexed as Annex 1 to each Acknowledgment and Conveyance Agreement, each such schedule setting forth the data and information listed on Exhibit A-2 with respect to each Mortgage Loan.

Mortgage Note : The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.

Mortgaged Property : The real property (or leasehold estate, if applicable) securing repayment of the debt evidenced by a Mortgage Note.

Mortgagor : The obligor on a Mortgage Note.

Officer’s Certificate : A certificate signed by (a) the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President and (b) the Treasurer, the Secretary or one of the Assistant Treasurers or Assistant Secretaries of the Company, and delivered to the Purchaser as required by this Agreement.

Opinion of Counsel : A written opinion of counsel, who may be an employee of the Company, reasonably acceptable to the Purchaser, provided that any Opinion of Counsel relating to (a) qualification of the Mortgage Loans in a REMIC or (b) compliance with the REMIC Provisions, must be an opinion of counsel who (i) is in fact independent of the Company and any Master Servicer of the Mortgage Loans, (ii) does not have any material direct or indirect financial interest in the Company or any Master Servicer of the Mortgage Loans or in an Affiliate of any such entity and (iii) is not connected with the Company or any Master Servicer of the Mortgage Loans as an officer, employee, director or person performing similar functions.

Pass-Through Transfer : Any transaction involving either (1) a sale or other transfer of some or all of the Mortgage Loans directly or indirectly to an issuing entity in connection with an issuance of publicly offered or privately placed, rated or unrated mortgage-backed securities or (2) an issuance of publicly offered or privately placed, rated or unrated securities, the payments on which are determined primarily by reference to one or more portfolios of residential mortgage loans consisting, in whole or in part, of some or all of the Mortgage Loans.

Periodic Rate Cap : The provision of the Mortgage Note related to each ARM Mortgage Loan which provides for an absolute maximum amount by which the Mortgage Interest Rate therein may increase or decrease on an Interest Rate Adjustment Date above or below the Mortgage Interest Rate previously in effect. The Periodic Rate Cap for each ARM Mortgage Loan is the rate set forth on the related Mortgage Loan Schedule.

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

PMI Policy : A policy of primary mortgage guaranty insurance issued by a Qualified Insurer, solely with respect to those Mortgage Loans that have such a policy.

Prepayment Charge : With respect to any Mortgage Loan and Remittance Date, the charges or premiums, if any, due in connection with a full or partial prepayment of such Mortgage Loan during the immediately preceding Principal Prepayment Period in accordance with the terms of the related Mortgage Note.

Prepayment Interest Excess : With respect to any Remittance Date, for each Mortgage Loan that was the subject of a Principal Prepayment during the period from the related Due Date to the end of the related Prepayment Period, any payment of interest received in connection therewith (net the related Servicing Fee) representing interest accrued for any portion of such month of receipt.

Prepayment Interest Shortfall Amount : With respect to any Mortgage Loan that was subject to a Principal Prepayment in full or in part during any Due Period, which Principal Prepayment was applied to such Mortgage Loan prior to such Mortgage Loan’s Due Date in such Due Period, the amount of interest (net the related Servicing Fee) that would have accrued on the amount of such Principal Prepayment during the period commencing on the date as of which such Principal Prepayment was applied to such Mortgage Loan and ending on the day immediately preceding such Due Date, inclusive.

Prime Rate : The prime rate announced to be in effect from time to time, as published as the average rate in The Wall Street Journal .

Principal Prepayment : Any payment or other recovery of principal on a Mortgage Loan which is received in advance of its scheduled Due Date, including any prepayment penalty or premium thereon and which 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 Period : The period beginning on the 16 ^th day of the preceding the month in which the related Remittance Date occurs and ending on the 15 ^th day of the month in which such Remittance Date occurs.

Purchase Price : The price paid on the related Closing Date by the Purchaser to the Company in exchange for the Mortgage Loans as calculated in Article III of this Agreement.

Purchase Price and Terms Letter : With respect to each purchase of a Mortgage Loan Package hereunder, that certain letter agreement by and between the Company and the Purchaser setting forth the general terms, conditions and portfolio characteristics for each Mortgage Loan Package to be purchased hereunder as of any Closing Date.

Purchaser : Lehman Brothers Bank, FSB or its successor in interest or assigns under this Agreement as herein provided.

Qualified Appraiser : An appraiser who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.

Qualified Depository : A depository the accounts of which are insured by the FDIC through the BIF or the SAIF and the debt obligations of which are rated in the two highest short term ratings by Standard & Poor’s, A Division of The McGraw Hill Companies.

Qualified Insurer : A mortgage guaranty insurance company duly authorized and licensed where required by law to transact mortgage guaranty insurance business.

Qualified Substitute Mortgage Loan : A mortgage loan eligible to be substituted by the Company for a Deleted Mortgage Loan which must, on the date of such substitution, (i) have an outstanding principal balance, after deduction of all scheduled payments due in the month of substitution (or in the case of a substitution of more than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance), not in excess of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Loan Remittance Rate not less than and not more than 2% greater than the Mortgage Loan Remittance Rate 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) have a Gross Margin not less than that of the Deleted Mortgage Loan; (v) have a Lifetime Rate Cap not less than that of the Deleted Mortgage Loan; (vi) have a Periodic Rate Cap not less than that of the Deleted Mortgage Loan; (vii) comply with each representation and warranty set forth in Sections 3.01 and 3.02; and (viii) be a REMIC Eligible Mortgage Loan.

Rating Agency : Any of Fitch, Inc., Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services, A Division of The McGraw-Hill Companies, Inc., or their respective successors, as applicable, or such other applicable rating agency.

Reconstitution : Any Pass-Through Transfer, Whole Loan Transfer or Agency Transfer.

Reconstitution Agreement : The agreement or agreements entered into by the Purchaser and/or certain third parties on the Reconstitution Date(s) with respect to any or all of the Mortgage Loans in a particular Mortgage Loan Package, in connection with a Pass-Through Transfer, an Agency Transfer or a Whole Loan Transfer.

Reconstitution Date : The date or dates on which any or all of the Mortgage Loans serviced under this Agreement shall be removed from this Agreement and reconstituted as part of a Pass-Through Transfer pursuant to Section 8.01.

Regulation AB : Subpart 229.1100 - Mortgage Loan Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release ( Mortgage Loan-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time .

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

REMIC Documents : The document or documents creating and governing the administration of a REMIC.

REMIC Eligible Mortgage Loan : A Mortgage Loan held by a REMIC which satisfies and/or complies with all applicable REMIC Provisions.

REMIC Provisions : Provisions of the federal income tax law relating to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1, Subtitle A of the Internal Revenue Code of 1986, as it may be amended from time to time or any successor statute thereto, and applicable U.S. Department of the Treasury regulations issued pursuant thereto, and related provisions, and regulations, rulings or pronouncements promulgated thereunder, as the foregoing may be in effect from time to time.

Remittance Date : The 24th day (or if such 24th day is not a Business Day, the first Business Day immediately following) of any month.

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

REO Disposition Proceeds : All amounts received with respect to an REO Disposition pursuant to Section 5.16.

REO Property : A Mortgaged Property acquired by the Company on behalf of the Purchasers through foreclosure or by deed in lieu of foreclosure, as described in Section 5.16.

Repurchase Price : As defined in the related Purchase Price and Terms Letter.

SAIF : The Savings Association Insurance Fund, or any successor thereto.

Second Lien Mortgage Loan : A Mortgage Loan secured by a second lien on the related Mortgaged Property.

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

Servicing Advances : All customary, reasonable and necessary “out of pocket” costs and expenses other than Monthly Advances (including reasonable attorneys’ fees and disbursements) incurred in the performance by the Company of its servicing obligations, including, but not limited to, the cost of (a) the preservation, restoration and protection of the Mortgaged Property, (b) any enforcement or judicial proceedings, including foreclosures, (c) the management and liquidation of any REO Property and (d) compliance with the obligations under this Agreement, including without limitation, Sections 5.01, 5.02, 5.08, 5.10, 5.13, 5.14, 5.15, and 5.16.

Servicing Fee : With respect to each Mortgage Loan, the amount of the annual fee the Purchaser shall pay to the Company, which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is computed. The obligation of the Purchaser to pay the Servicing Fee is limited to, and the Servicing Fee is payable solely from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds, to the extent permitted by Section 5.05) of such Monthly Payment collected by the Company.

Servicing Fee Rate : 0.50%, or such other amount as set forth in the related Purchase Price and Terms Letter.

Servicing File : With respect to each Mortgage Loan the file retained by the Company consisting of originals of all documents in the Mortgage File, which are not delivered to the Purchaser or the Purchaser’s designee, and copies of the Mortgage Loan Documents listed on Exhibit B hereto.

Stated Principal Balance : As to each Mortgage Loan, (i) the principal balance of the Mortgage Loan at the related 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 distributed to the Purchaser with respect to the related Mortgage Loan representing payments or recoveries of principal or advances in lieu thereof.

Subservicer : Any Subservicer which is subservicing the Mortgage Loans pursuant to a Subservicing Agreement. Any subservicer shall meet the qualifications set forth in Section 5.01.

Subservicing Agreement : An agreement between the Company and a Subservicer for the servicing of the Mortgage Loans.

Texas Home Equity Loan : An extension of credit described in Section 50(a)(6), Article XVI of the Texas Constitution.

Underwriting Guidelines : The underwriting guidelines of the Company attached as Annex 3 to the related Acknowledgment and Conveyance Agreement.

Whole Loan Transfer : The sale or transfer of some or all of the Mortgage Loans to a third party purchaser in a whole loan transaction pursuant to a loan purchase, warranties and servicing agreement or a participation and servicing agreement, or similar agreement, retaining the Company as “servicer” thereunder.

Section 2.01.   Conveyance of Mortgage Loans; Possession of Mortgage Files; Maintenance of Servicing Files .

On each Closing Date, the Company, simultaneously with the execution and delivery of the related Acknowledgment and Conveyance Agreement, does hereby sell, transfer, assign, set over and convey to the Purchaser, without recourse, but subject to the terms of this Agreement, all right, title and interest of the Company in and to the Mortgage Loans included in the related Mortgage Loan Package, together with Mortgage Files and all rights and obligations arising under the documents contained therein for each Mortgage Loan. Pursuant to Section 2.03 hereof, on or prior to each Closing Date, the Company shall deliver the Mortgage Loan Documents for each Mortgage Loan included in the related Mortgage Loan Package to the Purchaser or its designee. The contents of each Servicing File required to be retained by the Company to service the Mortgage Loans included in the related Mortgage Loan Package pursuant to this Agreement and thus not delivered to the Purchaser are and shall be held in trust by the Company for the benefit of Purchaser as the owner thereof. The Company’s possession of any portion of the Servicing File is at the will of the Purchaser for the sole purpose of facilitating servicing of the related Mortgage Loan pursuant to this Agreement, and such retention and possession by the Company shall be in a custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the contents of the Mortgage File and Servicing File are vested in the Purchaser and the ownership of all records and documents required to be included in the Mortgage File and Servicing File but not delivered or received until after the Closing Date, shall immediately vest in the Purchaser and shall be retained and maintained, in trust, by the Company at the will of the Purchaser in such custodial capacity only. The Servicing File retained by the Company pursuant to this Agreement shall be appropriately marked to clearly reflect the sale of the related Mortgage Loan to the Purchaser. The Company shall release from its custody the contents of any Servicing File retained by it only in accordance with this Agreement, except when such release is required in connection with a repurchase of any such Mortgage Loan pursuant hereto.

Section 2.02.   Books and Records; Transfers of Mortgage Loans .

Record title to each Mortgage and the related Mortgage Note as of the applicable Closing Date shall be in the name of the Purchaser or as the Purchaser shall designate. All rights arising out of the Mortgage Loans including, but not limited to, all funds received by the Company after the related Cut-off Date on or in connection with a Mortgage Loan shall be vested in the Purchaser; provided, however, that all funds received on or in connection with a Mortgage Loan shall be received and held by the Company in trust for the benefit of the Purchaser as owner of the Mortgage Loans, for the sole purpose of servicing the Mortgage Loans.

The sale of each Mortgage Loan shall be reflected on the Company’s balance sheet and other financial statements as a sale of assets by the Company. The Company shall be responsible for maintaining, and shall maintain, a complete set of books and records for each Mortgage Loan which shall be marked clearly to reflect the ownership of each Mortgage Loan by the Purchaser.

The Company shall maintain with respect to each Mortgage Loan and shall make available for inspection by any Purchaser or its designee the related Servicing File during the time the Purchaser retains ownership of a Mortgage Loan and thereafter in accordance with applicable laws and regulations.

Section 2.03.   Custodial Agreement; Delivery of Documents .

Not later than the date set forth in the related Purchase Price and Terms Letter, the Company shall deliver to the Custodian those Mortgage Loan Documents as required by this Agreement with respect to each Mortgage Loan in the related Mortgage Loan Package, a list of which is attached as Exhibit B hereto.

On or prior to the related Closing Date, the Custodian shall have certified its receipt of all such Mortgage Loan Documents required to be delivered pursuant to the Custodial Agreement, as evidenced by the initial certification of the Custodian in the form annexed to the Custodial Agreement. The Purchaser shall be responsible for maintaining the Custodial Agreement and shall pay all fees and expenses of the Custodian.   On the related Closing Date, the Company shall release any interest that it has in the Mortgage Loan Documents upon its receipt of the Purchase Price for the Mortgage Loans.

Within ninety (90) days of receipt by the Company of any notice from the Purchaser or the Custodian that any of the Mortgage Loan Documents is missing or appears to be unrelated to the Mortgage Loans identified in the Mortgage Loan Schedule (each, a “ Material Defect ”), the Company shall cure such Material Defect. If the Company does not so cure such Material Defect, it shall, if such Material Defect would under Accepted Servicing Practices reasonably be expected to materially and adversely affect the value of the Mortgage Loan, repurchase the related Mortgage Loan at the Repurchase Price.

The Company shall forward to the Custodian original documents evidencing an assumption, modification, consolidation or extension of any Mortgage Loan entered into in accordance with Section 5.01 or 7.01 in a timely manner upon their execution, provided, however, that the Company, in the event such document was submitted for recordation, shall provide the Custodian with a certified true copy of any such document in a timely manner and shall provide the original of such document submitted for recordation within 270 days of its submission for recordation.

Notwithstanding anything to the contrary set forth in this Section 2.03, in the event any Mortgage Loan Document is missing due to a delay caused by the public recording office in returning any such Mortgage Loan Document, upon the written request of the Purchaser, the Company shall deliver to the Custodian, within 270 days of the related Closing Date, an Officer’s Certificate which shall (i) identify the missing Mortgage Loan Document, and (ii) state that the Mortgage Loan Document has not been delivered to the Custodian due solely to a delay caused by the public recording office, and (iii) specify the date the applicable recorded document most likely will be delivered to the Custodian. The Company shall make best efforts to deliver to the Custodian the applicable recorded document by the date specified in (iv) above. An extension of the date specified in (iv) above may be requested from the Purchaser, which consent shall not be unreasonably withheld.

The Company shall deliver a final Mortgage Loan Schedule for the Mortgage Loans included in any Mortgage Loan Package to be purchased on any Closing Date to the Purchaser no later than the date set forth in the related Purchase Price and Terms Letter.

Section 2.04.   MERS Designated Mortgage Loans.

With respect to each MERS Designated Mortgage Loan, the Company shall, within a reasonable time following the related Closing Date, designate the Purchaser as the Investor and the Custodian as custodian, and no Person shall be listed as Interim Funder on the MERS System.

The Purchase Price shall be the percentage of par as stated in the related Purchase Price and Terms Letter (subject to the adjustments as provided therein), multiplied by the aggregate scheduled principal balance, as of the related Cut-off Date, of the Mortgage Loans listed on the related Mortgage Loan Schedule, after application of payments of principal received on or before the related Cut-off Date. The initial principal amount of the Mortgage Loans shall be the aggregate scheduled principal balance of such Mortgage Loans, so computed as of the related Cut-off Date. On each Closing Date, the Purchaser shall deduct from the Purchase Price proceeds certain costs and expenses set forth in Article XIII or in the related Purchase Price and Terms Letter.

In addition to the Purchase Price as described above, the Purchaser shall pay to the Company, on the related Closing Date, accrued interest on the initial principal amount of the Mortgage Loans at the weighted average Mortgage Loan Remittance Rate from the related Cut-off Date through the day prior to the related Closing Date, inclusive.

The Purchase Price shall be paid on the related Closing Date by wire transfer of immediately available federal funds.

The Purchaser shall be entitled to (i) all principal received after the related Cut-off Date, (ii) all other recoveries of late charges, assumption fees or other charges collected after the related Cut-off Date, and (iii) all payments of interest on the Mortgage Loans at the Mortgage Interest Rate. The principal balance of each Mortgage Loan as of the related Cut-off Date is determined after application of payments of principal received on or before the related Cut-off Date. All payments of principal and interest (minus interest at the Servicing Fee Rate) due on the first day of the month after the related Cut-off Date shall belong to the Purchaser.

Section 4.01.   Company Representations and Warranties .

The Company, as a condition to the consummation of the transactions contemplated hereby, makes the following representations and warranties to the Purchaser that, as of each Closing Date:

(a)   Due Organization and Authority . The Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in each state where a Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by the Company, and in any event the Company is in good standing with the laws of each state to the extent necessary to ensure the enforceability of the related Mortgage Loan and the servicing of such Mortgage Loan in accordance with the terms of this Agreement; the Company has the full corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Company and the consummation of the transactions contemplated hereby have been duly and validly authorized; this Agreement evidences the valid, binding and enforceable obligation of the Company; and all requisite corporate action has been taken by the Company to make this Agreement valid and binding upon the Company in accordance with its terms;

(b)   Ordinary Course of Business . The consummation of the transactions contemplated by this Agreement are in the ordinary course of business of the Company, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Company pursuant to this Agreement are not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction;

(c)   No Conflicts . Neither the execution and delivery of this Agreement, the acquisition of the Mortgage Loans by the Company, the sale of the Mortgage Loans to the Purchaser or the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, will conflict with or result in a breach of any of the terms, conditions or provisions of the Company’s charter or by-laws or any legal restriction or any agreement or instrument to which the Company is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Company or its property is subject, or impair the ability of the Purchaser to realize on the Mortgage Loans, or impair the value of the Mortgage Loans;

(d)   Ability to Service . The Company is an approved seller/servicer of conventional residential mortgage loans for Fannie Mae and Freddie Mac, with the facilities, procedures, and experienced personnel necessary for the sound servicing of mortgage loans of the same type as the Mortgage Loans. The Company is in good standing to sell mortgage loans to and service mortgage loans for Fannie Mae and Freddie Mac, and no event has occurred, including but not limited to a change in insurance coverage, which would make the Company unable to comply with Fannie Mae and Freddie Mac eligibility requirements or which would require notification to either Fannie Mae and Freddie Mac;

(e)   Reasonable Servicing Fee . The Company acknowledges and agrees that the Servicing Fee, as calculated at the Servicing Fee Rate, represents reasonable compensation for performing such services and that the entire Servicing Fee shall be treated by the Company, for accounting and tax purposes, as compensation for the servicing and administration of the Mortgage Loans pursuant to this Agreement.

(f)   Ability to Perform . The Company does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement. The Company is solvent and the sale of the Mortgage Loans will not cause the Company to become insolvent. The sale of the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of the Company’s creditors;

(g)   No Litigation Pending . There is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, threatened against the Company which, either in any one instance or in the aggregate, may result in any material adverse change in the business, operations, financial condition, properties or assets of the Company, or in any material impairment of the right or ability of the Company to carry on its business substantially as now conducted, or in any material liability on the part of the Company, or which would draw into question the validity of this Agreement or the Mortgage Loans or of any action taken or to be taken in connection with the obligations of the Company contemplated herein, or which would be likely to impair materially the ability of the Company to perform under the terms of this Agreement;

(h)   No Consent Required . No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Company of or compliance by the Company with this Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files to the Custodian or the sale of the Mortgage Loans to the Purchaser or the consummation of the transactions contemplated by this Agreement, or if required, such approval has been obtained prior to the related Closing Date;

(i)   Selection Process . The Mortgage Loans were not intentionally selected in a manner so as to affect adversely the interests of the Purchaser;

(j)   No Untrue Information . Neither this Agreement nor any statement, report or other document created and furnished by the Company pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement of fact or omits to state a fact necessary to make the statements contained therein not misleading;

(k)   Sale Treatment . The Company has determined that the disposition of the Mortgage Loans pursuant to this Agreement will be afforded sale treatment for accounting and tax purposes;

(l)   No Broker Fees . The Company has not dealt with any broker, agent or other person that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans;

(m)   Financial Statements . The Company has delivered to the Purchaser financial statements as to its last three complete fiscal years and any later quarter ended more than 60 days prior to the execution of this Agreement. All such financial statements fairly present the pertinent results of operations and changes in financial position at the end of each such period of the Company and its subsidiaries and have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as set forth in the notes thereto . There has been no change in the business, operations, financial condition, properties or assets of the Company since the date of the Company’s financial statements that would have a material adverse effect on its ability to perform its obligations under this Agreement;

(n)   Fair Consideration . The consideration received by the Company upon the sale of the Mortgage Loans under this Agreement constitutes fair consideration and reasonably equivalent value for the Mortgage Loans;

(o)   MERS . The Company is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the MERS Designated Mortgage Loans for as long as such Mortgage Loans are registered with MERS; and

(p)   Company’s Origination . The Company’s decision to originate any mortgage loan or to deny any mortgage loan application is an independent decision based upon the related Underwriting Guidelines, and is in no way made as a result of Purchaser’s decision to purchase, or not to purchase, or the price Purchaser may offer to pay for, any such mortgage loan, if originated.

Section 4.02.   Representations and Warranties Regarding Individual Mortgage Loans .

As to each Mortgage Loan, the Company hereby represents and warrants to the Purchaser that as of the related Closing Date:

(a)   Mortgage Loans as Described . The information set forth in the related Mortgage Loan Schedule is complete, true and correct in all material respects;

(b)   Payments Current . All payments required to be made up to the related Closing Date on the Mortgage Loan under the terms of the Mortgage Note have been made and credited. Unless otherwise set forth in the related Purchase Price and Terms Letter, (i) no payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent for thirty (30) days or more in the twelve (12) months preceding such Closing Date and (ii) no payment required under the Mortgage Loan is delinquent;

(c)   No Outstanding Charges . There are no defaults in complying with the terms of the Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. The Company has not advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest;

(d)   Original Terms Unmodified . The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect, except by a written instrument which has been recorded, if necessary to protect the interests of the Purchaser and which has been or will be delivered to the Purchaser or its designee in accordance with this Agreement. The substance of any such waiver, alteration or modification has been approved by the issuer of any PMI Policy (if any) and the title insurer, to the extent required by the policy, and its terms are reflected on the related Mortgage Loan Schedule. No Mortgagor has been released, in whole or in part, except in connection with an assumption agreement approved by the issuer of any related PMI Policy (if any) and the title insurer, to the extent required by the policy, and which assumption agreement is part of the Mortgage Loan File delivered to the Purchaser or its designee and the terms of which are reflected in the related Mortgage Loan Schedule;

(e)   No Defenses . The Mortgage Loan is not subject to any right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including without limitation the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto;

(f)   Hazard Insurance . Pursuant to the terms of the Mortgage, all buildings or other improvements upon the Mortgaged Property are insured by a generally acceptable insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located. If upon origination of the Mortgage Loan, the Mortgaged Property was in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards a life-of-loan flood insurance policy meeting the requirements of the current guidelines of the Federal Flood Insurance Administration is in effect which policy conforms to the requirements of Fannie Mae and Freddie Mac. Such flood insurance shall be with a Qualified Insurer. All individual insurance policies contain a standard mortgagee clause naming the Company and its successors and assigns as mortgagee, and all premiums thereon have been paid. The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance at such Mortgagor’s cost and expense, and to seek reimbursement therefor from the Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. The Company has not engaged in, and has no knowledge of the Mortgagor or any subservicer having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by the Company;

(g)   Compliance with Applicable Laws . At origination, any and all requirements of any applicable federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement procedures, anti-predatory and abusive lending, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such applicable laws or regulations;

(h)   No Satisfaction of Mortgage . The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission. The Company has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has the Company waived any default resulting from any action or inaction by the Mortgagor;

(i)   Location and Type of Mortgaged Property . The Mortgaged Property is a fee simple property or leasehold estate located in the state identified in the related Mortgage Loan Schedule and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a low-rise condominium project, or an individual unit in a planned unit development or a manufactured dwelling permanently affixed to the ground. None of the Mortgaged Properties are rural properties, mobile homes, log homes, geodesic homes or other unique property. No portion of the Mortgaged Property is used for commercial purposes, and since the date of origination, no portion of the Mortgaged Property has been used for commercial purposes;

(j)   Pool Characteristics . The pool characteristics with respect to the Mortgage Loans included in the related Mortgage Loan Package are set forth in the related Acknowledgment and Conveyance Agreement and are true and complete in all material respects;

(k)   Valid First or Second Lien . With respect to any First Lien Mortgage Loan, the related Mortgage is a valid, subsisting, enforceable and perfected first lien on the Mortgaged Property, and, with respect to any Second Lien Mortgage Loan, the related Mortgage is a valid, subsisting, enforceable and perfected second lien on the Mortgaged Property, including all buildings on the Mortgaged Property, and all additions, alterations and replacements made at any time with respect to the foregoing. Such lien is free and clear of all adverse claims, liens and encumbrances having priority over the first or second lien, as applicable, of the Mortgage subject only to:

(i)   with respect to any Second Lien Mortgage Loan, the related First Lien Mortgage Loan;

(ii)   the lien of current real property taxes and assessments not yet due and payable;

(iii)   covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and (i) referred to or to otherwise considered in the appraisal made for the originator of the Mortgage Loan or (ii) which do not adversely affect the appraised value of the Mortgaged Property set forth in such appraisal; and

(iv)   other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property.

Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable (A) first lien and first priority security interest with respect to each First Lien Mortgage Loan, or (B) second lien and second priority security interest with respect to each Second Lien Mortgage Loan, in either case, on the property described therein and the Company has full right to sell and assign the same to the Purchaser;

(l)   Validity of Mortgage Documents . The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note and the Mortgage and any other related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage and any other related agreement, and the Mortgage Note and the Mortgage and any other related agreement have been duly and properly executed by such parties. The documents, instruments and agreements submitted for loan underwriting were not falsified by the Company, or, to the best of the Company’s knowledge, any other party, and contain no untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the information and statements therein not misleading. The Company has reviewed all of the documents constituting the Servicing File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein;

(m)   No Fraud . No error, omission, misrepresentation, negligence, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of the Company and, to the best of the Company’s knowledge, the Mortgagor, the appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan or, in the application of any insurance in relation to such Mortgage Loan;

(n)   Full Disbursement of Proceeds . The Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage;

(o)   Ownership . The Company is the sole owner of record and holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the Company has good and marketable title thereto, and has full right to transfer and sell the Mortgage Loan therein to the Purchaser free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest;

(p)   Doing Business . All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (1) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (2) (i) organized under the laws of such state, (ii) qualified to do business in such state, (iii) federal savings and loan associations, savings banks or national banks having principal offices in such state, or (iv) not doing business in such state;

(q)   Title Insurance . The Mortgage Loan is covered by an ALTA lender’s title insurance policy or other generally acceptable form of policy of insurance issued by a Qualified Insurer qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring the Company, its successors and assigns, as to the first priority lien of the Mortgage with respect to First Lien Mortgage Loans and as to the second priority lien of the Mortgage with respect to Second Lien Mortgage Loans in the original principal amount of the Mortgage Loan subject only to the exceptions contained in clauses (1), (2), (3) and (4) of the “Valid First or Second Lien” representation of this Section 4.02, and with respect to each ARM Mortgage Loan, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by applicable state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress, and against encroachments by or upon the Mortgaged Property or any interest therein. The Company, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect. No claims have been made under such lender’s title insurance policy, and no prior holder of the Mortgage, including the Company, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other person or entity, and no such unlawful items have been received, retained or realized by the Company;

(r)   No Defaults . There is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event which, with the passage of time or with notice and the expiration of any applicable grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither the Company nor its predecessors have waived any default, breach, violation or event of acceleration. With respect to each Second Lien Mortgage Loan, (i) the First Lien Mortgage Loan is in full force and effect, (ii) there is no default, breach, violation or event of acceleration existing under such prior mortgage or the related mortgage note, (iii) there is no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration thereunder, and either (A) the prior mortgage contains a provision which allows or (B) applicable law requires, the mortgagee under the Second Lien Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to cure any default by payment in full or otherwise under the prior mortgage;

(s)   No Mechanics’ Liens . There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage;

(t)   Location of Improvements; No Encroachments . All improvements which were considered in determining the Appraised Value of the Mortgaged Property lay wholly within the boundaries and building restriction lines of the Mortgaged Property, no improvements on adjoining properties to which value was assigned encroach upon the Mortgaged Property and the value of the Mortgaged Property is not diminished by any improvements on adjoining properties which encroach the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning law or regulation;

(u)   Origination; Payment Terms . At the time the Mortgage Loan was originated, the originator was a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act or a savings and loan association, a savings bank, a commercial bank or similar institution which is supervised and examined by a Federal or State authority. The Mortgage Interest Rate is (a) with respect to fixed rate Mortgage Loans, the fixed interest rate set forth in the Mortgage Note and (b) with respect to ARM Mortgage Loans, adjusted on each Interest Rate Adjustment Date pursuant to the Mortgage Loan Documents and rounded as required under Accepted Servicing Practices and subject to the Mortgage Interest Rate Cap, the Periodic Rate Cap and the Lifetime Rate Cap. Except with respect to any Balloon Mortgage Loan as indicated on the related Mortgage Loan Schedule, the Mortgage Note is payable in equal monthly installments of principal and interest, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty years from commencement of amortization. The Mortgage Interest Rate, as well as the Lifetime Rate Cap, the Periodic Rate Cap and the Mortgage Interest Rate Cap, are as set forth on the Mortgage Loan Schedule. No ARM Mortgage Loan contains terms whereby the Mortgagor is permitted to convert the Mortgage Loan to a fixed rate Mortgage Loan and no ARM Mortgage Loan contains a negative amortization provision;

(v)   Customary Provisions . The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage subject to applicable federal and state laws and judicial precedent with respect to bankruptcy and right of redemption;

(w)   Conformance with Underwriting Guidelines; Underwriting Methodology . The Mortgage Loan was underwritten in accordance with the Underwriting Guidelines in effect at the time the Mortgage Loan was originated. The Mortgage Note and Mortgage are on forms acceptable to participants in the secondary mortgage market for similar types of Mortgage Loans;

(x)   Occupancy of the Mortgaged Property . As of the related Closing Date, the Mortgaged Property was lawfully occupied under applicable law and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities . The Mortgagor represented at the time of origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence, if applicable ;

(y)   No Additional Collateral . The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in the “Valid First or Second Lien” representation above;

(z)   Loan-to-Value Ratio; Combined Loan-to-Value Ratio . No Mortgage Loan has an LTV or a CLTV of greater than 100%;

(aa)   Deeds of Trust . In the event the Mortgage constitutes a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Purchaser to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor;

(bb)   Acceptable Investment . The Company has no knowledge of any circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become delinquent, or adversely affect the value or marketability of the Mortgage Loan;

(cc)   Ground Leases . a Mortgaged Property is subject to, (i) the ground lease is assignable or transferable; (ii) the ground lease will not terminate earlier than five years after the maturity date of the Mortgage Loan unless fee simple title will vest in the Mortgagor, an owner’s association or cooperative corporation at an earlier date; (iii) the ground lease does not provide for termination of the lease in the event of lessee’s default without the mortgagee being entitled to receive written notice of, and a reasonable opportunity to cure the default; (iv) the ground lease permits the mortgaging of the related Mortgaged Property; and (v) the ground lease protects the mortgagee’s interests in the event of a property condemnation;

(dd)   Delivery of Mortgage Documents . The Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents required to be delivered by the Company under this Agreement have been or will be delivered to the Purchaser or its designee in accordance with this Agreement;

(ee)   Condominiums/Planned Unit Developments . If the Mortgaged Property is a condominium unit or a planned unit development (other than a de minimus planned unit development) such condominium or planned unit development project meets Company’s underwriting guidelines.

(ff)   Manufactured Homes . With respect to each Mortgage Loan secured by a manufactured home: (i) the manufactured home is permanently affixed to a foundation which is suitable for the soil conditions of the site; (ii) all foundations, both perimeter and interior, have footings that are located below the frost line; (iii) any wheels, axles and trailer hitches are removed from the manufactured home; (iv) the Mortgage Loan is covered under a standard real estate title insurance policy or attorney’s title opinion or certificate that identified the manufactured home as part of the real property and insures or indemnifies against any loss if the manufactured home is determined not to be part of the real property. In no event shall any Mortgage Loan be secured by a mobile home;

(gg)   Due on Sale . The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the Mortgage thereunder;

(hh)   Transfer of Mortgage Loans . If the Mortgage Loan is not a MERS Designated Mortgage Loan, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located;

(ii)   No Buydown Provisions; No Graduated Payments or Contingent Interests . The Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by the Company, the Mortgagor or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions currently in effect which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature;

(jj)   Consolidation of Future Advances . Any future advances prior to the related Cut-off Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate or readjustment feature and single repayment term. The lien of the Mortgage securing the consolidated principal amount is expressly insured as having the lien priority as indicated on the Mortgage Loan Schedule by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan;

(kk)   Mortgaged Property Undamaged . There is no proceeding pending or, to the best of the Company’s knowledge, threatened for the total or partial condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended;

(ll)   Collection Practices; Escrow Payments . The origination and collection practices used with respect to the Mortgage Loan have been in accordance with Accepted Servicing Practices, and have been in all respects in compliance with all applicable laws and regulations and in all material respects proper and prudent in the mortgage origination and servicing business. With respect to escrow deposits and Escrow Payments (other than with respect to Second Lien Mortgage Loans for which the mortgagee under the prior mortgage lien is collecting Escrow Payments) , all such payments are in the possession of the Company and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. No escrow deposits or Escrow Payments or other charges or payments due the Company have been capitalized under the Mortgage or the Mortgage Note. With respect to each ARM Mortgage Loan, all Mortgage Interest Rate adjustments have been made in compliance with federal law and the terms of the Mortgage Note. The index used for the adjustment of the Mortgage Interest Rate on each ARM Mortgage Loan is the Index. The Company executed and delivered any and all notices required under applicable law and the terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment adjustments for the period on and prior to the Closing Date. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited;

(mm)   Appraisal . The Mortgage File contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by a Qualified Appraiser;

(nn)   Servicemembers’ Relief Act . The Mortgagor has not notified the Company, and the Company has no knowledge of any relief requested or allowed to the Mortgagor under the Servicemembers’ Relief Act or any other federal or state law that would have the effect of suspending or reducing the Mortgagor’s payment obligations under a Mortgage Loan or that would prevent or restrict the ability of the Servicer to commence or continue with the foreclosure of the Mortgage Loan;

(oo)   Environmental Matters . The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation. There is no pending action or proceeding directly involving any Mortgaged Property of which the Company is aware in which compliance with any environmental law, rule or regulation is an issue; and to the best of the Company’s knowledge, nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation consisting a prerequisite to use and enjoyment of said property;

(pp)   No Construction Loans . No Mortgage Loan was made in connection with (i) the construction or rehabilitation of a Mortgaged Property or (ii) facilitating the trade-in or exchange of a Mortgaged Property;

(qq)   Insurance . The Company has caused to be performed any and all acts required by a mortgagee to preserve the rights and remedies of the Purchaser in any insurance policies applicable to the Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of the Purchaser; No action, inaction, or event has occurred and no state of fact exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable pool insurance policy, special hazard insurance policy, PMI Policy (if any) or bankruptcy bond. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by the Company or any designee of the Company or any corporation in which the Company or any officer, director, or employee had a financial interest at the time of placement of such insurance;

(rr)   Regarding the Mortgagor . The Mortgagor is one or more natural persons;

(ss)   Simple Interest Mortgage Loans . None of the Mortgage Loans are simple interest Mortgage Loans;

(tt)   Single Premium Credit Life Insurance . No Mortgagor was required to purchase any credit life, disability, accident or health insurance product or debt cancellation agreement as a condition of obtaining the extension of credit evidenced by the Mortgage Loan. No Mortgagor obtained a prepaid single-premium credit life, disability, accident or health insurance policy in connection with the origination of the Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase single premium credit insurance policies as part of the origination of, or as a condition to closing, such Mortgage Loan;

(uu)   Mortgagor Disclosure . All points, fees and charges (including finance charges), whether or not financed, assessed, collected or to be collected in connection with the origination and servicing of each Mortgage Loan have been disclosed in writing to the Mortgagor in accordance with applicable state and federal law and regulation   The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans. The Company shall maintain such statement in the Mortgage File;

(vv)   Tax Service Contract Except with respect to the Mortgage Loans for which Purchaser will obtain a tax service contract pursuant to Section 12.05, the Company has obtained a life of loan, transferable real estate tax service on each Mortgage Loan and such contract is assignable to the Purchaser without cost;

(ww)   Flood Certification Contract . Except with respect to the Mortgage Loans for which Purchaser will obtain a flood certification contract pursuant to Section 12.05, the Company has obtained a life of loan, transferable flood certification contract for each Mortgage Loan and such contract is assignable to the Purchaser or the Purchaser’s designee without cost;

(xx)   Recordation . Each original Mortgage was recorded and, except for those Mortgage Loans subject to MERS, all subsequent assignments of the original Mortgage (other than the assignment to the Purchaser) have been recorded in the appropriate jurisdictions wherein such recordation is necessary to perfect the lien thereof as against creditors of the Company, or is in the process of being recorded;

(yy)   FICO Scores. The FICO score of each Mortgage Loan is not less than what is set forth on the related Mortgage Loan Schedule;

(zz)   Prepayment Premium . With respect to any Mortgage Loan that contains a provision permitting imposition of a premium upon a prepayment prior to maturity: (i) the prepayment premium is enforceable and will be enforced by the Company, (ii) the prepayment premium is permitted pursuant to federal, state and local law With respect to any Mortgage Loan that contains a provision permitting imposition of a premium upon a prepayment prior to maturity: (i) prior to the origination of such Mortgage Loan, the Mortgagor agreed to such premium in exchange for a monetary benefit, including but not limited to a rate or fee reduction, (ii) prior to the origination of such Mortgage Loan, the Mortgagor was offered the option of obtaining a mortgage loan that did not require payment of such a premium, (iii) the prepayment premium is disclosed to the Mortgagor in the Mortgage Loan Documents pursuant to applicable state and federal law and notwithstanding any state or federal law to the contrary or clause (i) above, the Company shall not impose such prepayment premium in any instance when the mortgage debt is accelerated as the result of the Mortgagor’s default in making the loan payments and (vi) the prepayment premium is set forth on the related Mortgage Loan Schedule;

(aaa)   Predatory Lending Regulations . No Mortgage Loan is subject to the requirements of the Home Ownership and Equity Protection Act of 1994. No Mortgage Loan is classified as a “high cost,” “threshold,” “abusive” or “predatory” loan or a similarly defined loan under any applicable state, federal or local law (or similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny and additional legal assignee liability for residential mortgage loans having high interest rates, points and/or fees). Each Mortgage Loan at the time it was made complied in all material respects with applicable local, state, and federal laws, including, but not limited to, all applicable anti-predatory and abusive lending laws. No Mortgage Loan is classified as “High Cost” as set forth in the current Standard & Poor’s LEVELS® Glossary;

(bbb)   Higher Cost Products . No Mortgagor was encouraged or required to select a Mortgage Loan product offered by the Mortgage Loan’s originator which is a higher cost product designed for less creditworthy Mortgagors, unless at the time of the Mortgage Loan’s origination, such Mortgagor did not qualify taking into account credit history and debt to income ratios for a lower cost credit product then offered by the Mortgage Loan’s originator or any Affiliate of the Mortgage Loan’s originator. If, at the time of loan application, the Mortgagor may have qualified for a lower cost credit product then offered by any mortgage lending Affiliate of the Mortgage Loan’s originator, the Mortgage Loan’s originator referred the Mortgagor’s application to such Affiliate for underwriting consideration;

(ccc)   Origination Practices . No predatory or deceptive lending practices or deceptive trade practices, including, without limitation, the extension of credit without regard to the ability of the Mortgagor to repay and the extension of credit which has no apparent benefit to the Mortgagor, were employed in the origination of the Mortgage Loan;

(ddd)   Texas Home Equity Loans . With respect to any Mortgage Loan which is a Texas Home Equity Loan, any and all requirements of Section 50, Article XVI of the Texas Constitution applicable to Texas Home Equity Loans which were in effect at the time of the origination of the Mortgage Loan have been complied with. Specifically, without limiting the generality of the foregoing, any fees paid in connection with such Mortgage Loan in order for the Mortgagor to receive a reduced interest rate are not required to be included in the calculation of the aggregate fees pursuant to Section 50(a)(6)(E) of the Texas Constitution;

(eee)   Credit Reporting . The Company has caused to be fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its Mortgagor credit files to Equifax, Experian, and Trans Union Credit Information Company (three of the credit repositories), on a monthly basis. The Company shall have transmitted full-file credit reporting data for each Mortgage Loan pursuant to Fannie Mae Guide Announcement 95-19, and, for each Mortgage Loan, the Company shall have reported one of the following statuses each month as follows: new origination, current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off ;

(fff)   Second Lien Mortgage Loans . Either (a) no consent for the Second Lien Mortgage Loan is required by the holder of the related first lien or (b) such consent has been obtained and is contained in the Mortgage File; With respect to any Second Lien Mortgage Loan, the Company has not received notice of: (a) any proceeding for the total or partial condemnation of any Mortgaged Property, (b) any subsequent, intervening mortgage, lien, attachment, lis pendens or other encumbrance affecting any Mortgaged Property or (c) any default under any mortgage, lien or other encumbrance senior to each Mortgage; With respect to any Second Lien Mortgage Loan, where required or customary in the jurisdiction in which the Mortgaged Property is located, the original lender has filed of record a request for notice of any action by the senior lienholder under the related First Lien Mortgage Loan, and the original lender has notified any senior lienholder in writing of the existence of the Second Lien Mortgage Loan and requested notification of any action to be taken against the Mortgagor by the senior lienholder; no Second Lien Mortgage Loan is a “home equity line of credit”. As of the related Closing Date, the Company has not received a notice of default of a First Lien Mortgage Loan which has not been cured;

(ggg)   Balloon Mortgage Loans . No Mortgage Loan is a Balloon Mortgage Loan that has an original stated maturity of less than seven (7) years;

(hhh)   Imaged Documents . Any document to be included in the Mortgage File that is delivered as an imaged document (and not accompanied by the original underlying document) represents a true, complete, and correct copy of the original document in all respects, including, but not limited to, all signatures conforming with signatures contained in the original document, no information having been added or deleted, and no imaged document having been manipulated or altered in any manner. Each imaged document is clear and legible in all material respects, including, but not limited to, accurate reproductions of photographs. The destruction by the Company of any original document underlying an imaged document or the inability of Company to produce a copy of such original document upon request shall not cause (i) any material delay in the enforcement of the Mortgage Loan resulting in a loss to the Purchaser, (ii) any inability to collect all amounts due under the Mortgage Loan, including without limitation, in connection with a foreclosure or other sale of the Mortgaged Property, or (iii) any claims from holders of mortgage-backed securities collateralized by the Mortgage Loan;

(iii)   FEMA Designations . Except for a “Certified Mortgaged Property” (as defined below), no Mortgaged Property (i) is in a zip code declared by the Federal Emergency Management Agency (“FEMA”) as a federal disaster area, (ii) has been declared by FEMA as being an “Individual Assistance” property or “Category 1” property, or such similar term(s) or classification(s) that may be used by FEMA from time to time, as identified by the Purchaser prior to the related Closing Date (a “FEMA Property”). A “Certified Mortgaged Property” means a FEMA Property for which the Purchaser receives from the Company a certified property inspection acceptable to the Purchaser that evidences that such FEMA Property has not been materially damaged at any time prior to the date of such report;

(jjj)   REMIC Status . The Mortgage Loan is a qualified mortgage for inclusion in a “real estate mortgage investment conduit” for federal income tax purposes; and

(kkk)   Compliance with Anti-Money Laundering Laws. The Company has established an anti-money laundering compliance program to the extent required by applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2003, and the laws and regulations administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (“ OFAC ”), which prohibit dealings with certain countries, territories, entities and individuals named in OFAC’s Sanction Programs and on the Specially Designated Nationals and Blocked Persons List. The Mortgage Loans have been originated, and documentation related thereto shall be maintained, in material compliance with such program.

Section 4.03.   Remedies for Breach of Representations and Warranties .

(a)   It is understood and agreed that the representations and warranties set forth in Sections 4.01 and 4.02 shall survive the sale of the Mortgage Loans to the Purchaser and the delivery of the Mortgage Loan Documents to the Purchaser (or its designee) and shall inure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination or failure to examine any Mortgage File. Upon discovery by either the Company or the Purchaser of a breach of any of the foregoing representations and warranties which materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser, or which materially and adversely affects the interests of Purchaser in the related Mortgage Loan in the case of a representation and warranty relating to a particular Mortgage Loan (in the case of any of the foregoing, a “Breach”), the party discovering such Breach shall give prompt written notice to the other. Within 90 days of the earlier of either discovery by or notice to the Company of any Breach of a representation or warranty, the Company shall use its best efforts to promptly cure such Breach in all material respects and, if such Breach cannot be cured, the Company shall repurchase such Mortgage Loan at the Repurchase Price . In the event that a Breach shall involve any representation or warranty of Company set forth in Section 4.01 and such Breach cannot be cured within 90 days of the earlier of either discovery by or notice to the Company of such Breach, all of the Mortgage Loans shall, as the Purchaser’s option, be repurchased by the Company at the Repurchase Price. However, if the Breach shall involve a representation or warranty set forth in Section 4.02 and the Company discovers or receives notice of any such Breach within 120 days of the related Closing Date, the Company shall, at the Purchaser’s option and provided that the Company has a Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a “ Deleted Mortgage Loan ”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided that any such substitution shall be effected not later than 120 days after the related Closing Date. If the Company has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan.

(b)   With respect to those representations and warranties which are made to the best of the Company’s knowledge (except with respect to the “No Fraud” representation and warranty contained in Section 4.02), if it is discovered by the Company or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interest of the Purchaser (or which materially and adversely affects the value of a Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan in the case of a representation and warranty relating to a particular Mortgage Loan), notwithstanding the Company’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty.

(c)   Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section 4.03 shall be accomplished by wire transfer of the amount of the Repurchase Price to the Purchaser in accordance with the Purchaser’s instructions.

(d)   At the time of repurchase or substitution, the Purchaser and the Company shall arrange for the reassignment of the Deleted Mortgage Loan to the Company and the delivery to the Company of any documents held by the Custodian relating to the Deleted Mortgage Loan. In the event of a repurchase or substitution, the Company shall, simultaneously with such reassignment, give written notice to the Purchaser that such repurchase or substitution has taken place, and the related Mortgage Loan Schedule shall be deemed amended to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case of substitution, identify a Qualified Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan to this Agreement. In connection with any such substitution, the Company shall be deemed to have made as to such Qualified Substitute Mortgage Loan the representations and warranties set forth in this Agreement except that all such representations and warranties set forth in this Agreement shall be deemed made as of the date of such substitution. The Company shall effect such substitution by delivering to the Custodian for such Qualified Substitute Mortgage Loan the documents required by Section 2.03. No substitution will be made in any calendar month after the Determination Date for such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution shall be retained by the Company. For the month of substitution, distributions to Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan in the month of substitution, and the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan.

For any month in which the Company substitutes a Qualified Substitute Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the amount (if any) by which the aggregate principal balance of all Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company shall deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall.

(e)   In addition to the repurchase obligation set forth herein, the Company shall indemnify the Purchaser and hold it harmless against any losses, damages, penalties, fines, forfeitures, including without limitation, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a Breach of any representation or warranty made by the Company. It is understood and agreed that the obligations of the Company set forth in this Section 4.03 to cure, repurchase or substitute for a defective Mortgage Loan and to indemnify the Purchaser as provided in this Section 4.03 constitute the sole remedies of the Purchaser respecting a Breach of the foregoing representations and warranties.

Any cause of action against the Company relating to or arising out of the Breach of any representations and warranties made in Sections 4.01 and 4.02 shall accrue as to any Mortgage Loan upon (i) discovery of such Breach by the Purchaser or notice thereof by the Company to the Purchaser, (ii) failure by the Company to cure such Breach within the applicable cure period or repurchase such Mortgage Loan as specified above, and (iii) demand upon the Company by the Purchaser for compliance with this Agreement.

Section 4.04.   Restrictions and Requirements Applicable in the Event that a Mortgage Loan is Acquired by a REMIC.

In the event that any Mortgage Loan is held by a REMIC, notwithstanding any contrary provision of this Agreement, the following provisions shall be applicable to such Mortgage Loan:

(a)   Repurchase of Mortgage Loans . With respect to any Mortgage Loan that is not in default or as to which no default is imminent, no repurchase or substitution pursuant to Section 4.03 shall be made, unless, if so required by the applicable REMIC Documents the Company has obtained an Opinion of Counsel to the effect that such repurchase will not (i) result in the imposition of taxes on “prohibited transactions” of such REMIC (as defined in Section 860F of the Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any time.

(b)   General Servicing Obligations . The Company shall sell any REO Property within three years after its acquisition by the REMIC unless (i) the Company applies for an extension of such three-year period from the Internal Revenue Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in which event such REO Property shall be sold within the applicable extension period, or (ii) the Company obtains for the Purchaser an Opinion of Counsel, addressed to the Purchaser and the Company, to the effect that the holding by the REMIC of such REO Property subsequent to such three year period will not result in the imposition of taxes on “prohibited transactions” as defined in Section 860F of the Code or cause the REMIC to fail to qualify as a REMIC under the REMIC Provisions or comparable provisions of relevant state laws at any time. The Company shall manage, conserve, protect and operate each REO Property for the Purchaser solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) or result in the receipt by the REMIC of any “income from non-permitted assets” within the meaning of Section 860F(a)(2)(B) of the Code or any “net income from foreclosure property” which is subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO Property, the Company shall either itself or through an agent selected by the Company protect and conserve such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Purchaser, rent the same, or any part thereof, as the Company deems to be in the best interest of the Company and the Purchaser for the period prior to the sale of such REO Property; provided, however, that any rent received or accrued with respect to such REO Property qualifies as “rents from real property” as defined in Section 856(d) of the Code.

(c)   Additional Covenants . In addition to the provision set forth in this Section 4.04, if a REMIC election is made with respect to the arrangement under which any of the Mortgage Loans or REO Properties are held, then, with respect to such Mortgage Loans and/or REO Properties, and notwithstanding the terms of this Agreement, the Company shall not take any action, cause the REMIC to take any action or fail to take (or fail to cause to be taken) any action that, under the REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger the status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC (including but not limited to the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the Code and the tax on “contributions” to a REMIC set forth in Section 860G(d) of the Code) unless the Company has received an Opinion of Counsel (at the expense of the party seeking to take such action) to the effect that the contemplated action will not endanger such REMIC status or result in the imposition of any such tax.

Section 4.05.   Pre- Closing Due Diligence.

The Purchaser shall have the right to review the portion of the Mortgage Files as set forth in the related Purchase Price and Terms Letter and reject any Mortgage Loan in accordance with the terms set forth therein. Any rejected Mortgage Loan shall be removed from the terms of this Agreement. The Company shall make available all files required by Purchaser in order to complete its review. Any review performed by the Purchaser prior to the Closing Date does not limit the Purchaser’s rights or the Company’s obligations under this Agreement thereafter.

Section 5.01.   Company to Act as Servicer .

The Company, as an independent contractor, shall service and administer the Mortgage Loans in the related Mortgage Loan Package from and after each Closing Date and shall have full power and authority, acting alone, to do any and all things in connection with such servicing and administration which the Company may deem necessary or desirable, consistent with the terms of this Agreement and with Accepted Servicing Practices.

Consistent with the terms of this Agreement, the Company may waive, modify or vary any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any manner grant indulgence to any Mortgagor if in the Company’s reasonable and prudent determination such waiver, modification, postponement or indulgence is not materially adverse to the Purchasers, provided, however, that the Company shall not make any future advances with respect to a Mortgage Loan and (unless the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Company, imminent and the Company has obtained the prior written consent of the Purchaser) the Company shall not permit any modification of any material term of any Mortgage Loan including any modifications that would change the Mortgage Interest Rate, defer or forgive the payment of principal or interest, reduce or increase the outstanding principal balance (except for actual payments of principal) or change the final maturity date on such Mortgage Loan. In the event of any such modification which permits the deferral of interest or principal payments on any Mortgage Loan, the Company shall, on the Business Day immediately preceding the Remittance Date in any month in which any such principal or interest payment has been deferred, deposit in the Custodial Account from its own funds, in accordance with Section 6.03, the difference between (a) such month’s principal and one month’s interest at the Mortgage Loan Remittance Rate on the unpaid principal balance of such Mortgage Loan and (b) the amount paid by the Mortgagor. The Company shall be entitled to reimbursement for such advances to the same extent as for all other advances made pursuant to Section 6.03. Without limiting the generality of the foregoing, the Company shall continue, and is hereby authorized and empowered, to execute and deliver on behalf of itself and the Purchasers, all instruments of satisfaction or cancellation, or of partial or full release, discharge and all other comparable instruments, with respect to the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably required by the Company, the Purchaser shall furnish the Company with any powers of attorney and other documents necessary or appropriate to enable the Company to carry out its servicing and administrative duties under this Agreement.

In servicing and administering the Mortgage Loans, the Company shall employ procedures (including collection procedures) and exercise the same care that it customarily employs and exercises in servicing and administering mortgage loans for its own account, giving due consideration to Accepted Servicing Practices where such practices do not conflict with the requirements of this Agreement, and the Purchaser’s reliance on the Company.

The Mortgage Loans may be subserviced by the Subservicer on behalf of the Company provided that the Subservicer is a servicer in good standing in the jurisdiction of its incorporation or organization. The Company may perform any of its servicing responsibilities hereunder or may cause the Subservicer to perform any such servicing responsibilities on its behalf, but the use by the Company of the Subservicer shall not release the Company from any of its obligations hereunder and the Company shall remain responsible hereunder for all acts and omissions of the Subservicer as fully as if such acts and omissions were those of the Company. The Company shall pay all fees and expenses of the Subservicer from its own funds, and the Subservicer’s fee shall not exceed the Servicing Fee.

At the cost and expense of the Company, without any right of reimbursement from the Custodial Account, the Company shall be entitled to terminate the rights and responsibilities of the Subservicer and arrange for any servicing responsibilities to be performed by a successor Subservicer meeting the requirements in the preceding paragraph, provided, however, that nothing contained herein shall be deemed to prevent or prohibit the Company, at the Company’s option, from electing to service the related Mortgage Loans itself. In the event that the Company’s responsibilities and duties under this Agreement are terminated pursuant to Section 9.04, 10.01 or 11.02, and if requested to do so by the Purchaser, the Company shall at its own cost and expense terminate the rights and responsibilities of the Subservicer as soon as is reasonably possible. The Company shall pay all fees, expenses or penalties necessary in order to terminate the rights and responsibilities of the Subservicer from the Company’s own funds without reimbursement from the Purchaser.

Notwithstanding any of the provisions of this Agreement relating to agreements or arrangements between the Company and the Subservicer or any reference herein to actions taken through the Subservicer or otherwise, the Company shall not be relieved of its obligations to the Purchaser and shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing and administering the Mortgage Loans. The Company shall be entitled to enter into an agreement with the Subservicer for indemnification of the Company by the Subservicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

Any Subservicing Agreement and any other transactions or services relating to the Mortgage Loans involving the Subservicer shall be deemed to be between the Subservicer and Company alone, and the Purchaser shall have no rights, obligations, duties or liabilities with respect to the Subservicer including no obligation, duty or liability of Purchaser to pay the Subservicer’s fees and expenses. For purposes of distributions and advances by the Company pursuant to this Agreement, the Company shall be deemed to have received a payment on a Mortgage Loan when the Subservicer has received such payment.

With respect to any Second Lien Mortgage Loan, if the Company is notified that any First Lien lienholder has accelerated or intends to accelerate the obligations secured by the First Lien, or has declared or intends to declare a default under the Mortgage or the Mortgage Note secured thereby, or has filed or intends to file an election to have the Mortgaged Property sold or foreclosed, the Company shall promptly notify the Purchaser of any such notice from or action by the First Lien lienholder and of the amount necessary to cure the default or reinstate the First Lien. The Company shall further make recommendations to the Purchaser (including note sales to third parties) so as to best protect the Purchaser’s interest in and the security of the related Mortgage Loan. If the Purchaser directs the Company to cure a default under or otherwise reinstate a First Lien, the Purchaser will advance to the Company necessary funds to cure the default or reinstate the First Lien. The Company shall thereafter take immediate action to recover from the Mortgagor the amount so advanced. The Purchaser shall notify the Company in writing of any and all action which it requests the Company to take.

In the event that the Company reasonably deems that the factual circumstances require prompt action, the Company may (but shall not be obligated to) without notice to the Purchaser, advance the necessary funds to cure the default or reinstate the First Lien so as to best protect the Purchaser’s interest. The Company shall thereafter notify the Purchaser of the action taken, including the amount of the advance. Such advances shall be reimbursed to the Company from the Custodial Account or Escrow Account, as applicable. The Company shall thereafter take immediate action to recover from the Mortgagor the amount so advanced .

Section 5.02.   Liquidation of Mortgage Loans .

In the event that any payment due under any Mortgage Loan and not postponed pursuant to Section 5.01 is not paid when the same becomes due and payable, or in the event the Mortgagor fails to perform any other covenant or obligation under the Mortgage Loan and such failure continues beyond any applicable grace period, the Company shall take such action as (a) the Company would take under similar circumstances with respect to a similar mortgage loan held for its own account for investment, (b) shall be consistent with Accepted Servicing Practices, (c) the Company shall determine prudently to be in the best interest of Purchaser and (d) is consistent with any related PMI Policy or LPMI Policy, if applicable. In the event that any payment due under any Mortgage Loan is not postponed pursuant to Section 5.01 and remains delinquent for a period of 90 days or any other default continues for a period of 90 days beyond the expiration of any grace or cure period, the Company shall commence foreclosure proceedings, provided that, prior to commencing foreclosure proceedings, the Company shall notify the Purchaser in writing of the Company’s intention to do so, and the Company shall not commence foreclosure proceedings if the Purchaser objects to such action within 3 Business Days of receiving such notice. In such connection, the Company shall from its own funds make all necessary and proper Servicing Advances, provided, however, that the Company shall not be required to expend its own funds in connection with any foreclosure or towards the restoration or preservation of any Mortgaged Property, unless it shall determine (a) that such preservation, restoration and/or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to itself for such expenses and (b) that such expenses will be recoverable by it either through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the Custodial Account pursuant to Section 5.05) or through Insurance Proceeds (respecting which it shall have similar priority).

Section 5.03.   Collection of Mortgage Loan Payments .

The Company shall proceed diligently to collect all payments due under each of the Mortgage Loans when the same shall become due and payable and shall take special care in ascertaining and estimating Escrow Payments and all other charges that will become due and payable with respect to the Mortgage Loans and each related Mortgaged Property, to the end that the installments payable by the Mortgagors will be sufficient to pay such charges as and when they become due and payable.

Section 5.04.   Establishment of and Deposits to Custodial Account .

The Company shall segregate and hold all funds collected and received pursuant to a Mortgage Loan separate and apart from any of its own funds and general assets and shall establish and maintain one or more Custodial Accounts, in the form of time deposit or demand accounts, titled “Countrywide Home Loans, Inc., in trust for Lehman Brothers Bank, purchaser of Residential Mortgage Loans, Group No. 2006-Flow”. The Custodial Account shall be established with a Qualified Depository. Any funds deposited in the Custodial Account shall at all times be fully insured to the full extent permitted under applicable law. Funds deposited in the Custodial Account may be drawn on by the Company in accordance with Section 5.05. The creation of any Custodial Account shall be evidenced by a letter agreement in the form of Exhibit C hereto. A copy of such letter agreement shall be furnished to the Purchaser and, upon request, to any subsequent purchaser of the Mortgage Loans.

The Company shall deposit in the Custodial Account within two Business Days of receipt, and retain therein, the following collections received by the Company and payments made by the Company after the Cut-off Date (other than payments of principal and interest due on or before the related Cut-off Date, or received by the Company prior to the related Cut-off Date but allocable to a period subsequent thereto or with respect to each LPMI Loan, in the amount of the LPMI Fee):

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

(ii)   all payments on account of interest on the Mortgage Loans adjusted to the Mortgage Loan Remittance Rate;

(iii)   any Prepayment Charge received in connection with the Mortgage Loans;

(iv)   all Liquidation Proceeds;

(v)   all Insurance Proceeds including amounts required to be deposited pursuant to Section 5.10 (other than proceeds to be held in the Escrow Account and applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Section 5.14), Section 5.11 and Section 5.15;

(vi)   all Condemnation Proceeds which are not applied to the restoration or repair of the Mortgaged Property or released to the Mortgagor in accordance with Section 5.14;

(vii)   any amounts payable in connection with the repurchase of any Mortgage Loan pursuant to Section 4.03 and all amounts required to be deposited by the Company in connection with a shortfall in principal amount of any Qualified Substitute Mortgage Loan pursuant to Section 4.03;

(viii)   any amounts required to be deposited by the Company pursuant to Section 5.11 in connection with the deductible clause in any blanket hazard insurance policy;

(ix)   any amounts required to be deposited by the Company pursuant to Section 5.15 in connection with any unpaid claims that are a result of a breach by the Company or any subservicer of the obligations hereunder or under the terms of an LPMI Policy;

(x)   with respect to each Principal Prepayment in full or in part, the Prepayment Interest Shortfall Amount, if any, for the month of distribution. Such deposit shall be made from the Company’s own funds, without reimbursement therefor up to a maximum amount per month of one-half the Servicing Fee actually received for such month for the Mortgage Loans;

(xi)   any amounts received with respect to or related to any REO Property and all REO Disposition Proceeds pursuant to Section 5.16; and

(xii)   any other amount required to be deposited into the Custodial Account as set forth in this Agreement.

The foregoing requirements for deposit into the Custodial Account shall be exclusive, it being understood and agreed that, without limiting the generality of the foregoing, Ancillary Income need not be deposited by the Company into the Custodial Account. Any interest paid on funds deposited in the Custodial Account by the depository institution shall accrue to the benefit of the Company and the Company shall be entitled to retain and withdraw such interest from the Custodial Account pursuant to Section 5.05.

Section 5.05.   Permitted Withdrawals From Custodial Account .

The Company shall, from time to time, withdraw funds from the Custodial Account for the following purposes:

(i)   to make payments to the Purchaser in the amounts and in the manner provided for in Section 6.01;

(ii)   to reimburse itself for Monthly Advances of the Company’s funds made pursuant to Section 6.03, the Company’s right to reimburse itself pursuant to this subclause (ii) being limited to amounts received on the related Mortgage Loan which represent late payments of principal and/or interest respecting which any such advance was made, it being understood that, in the case of any such reimbursement, the Company’s right thereto shall be prior to the rights of Purchaser, except that, where the Company is required to repurchase a Mortgage Loan pursuant to Section 4.03 or 8.02, the Company’s right to such reimbursement shall be subsequent to the payment to the Purchaser of the Repurchase Price pursuant to such sections and all other amounts required to be paid to the Purchaser with respect to such Mortgage Loan;

(iii)   to reimburse itself for unreimbursed Servicing Advances, and for any unpaid Servicing Fees, the Company’s right to reimburse itself pursuant to this subclause (iii) with respect to any Mortgage Loan being limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts as may be collected by the Company from the Mortgagor or otherwise relating to the Mortgage Loan, it being understood that, in the case of any such reimbursement, the Company’s right thereto shall be prior to the rights of Purchaser except where the Company is required to repurchase a Mortgage Loan pursuant to Section 4.03 or 8.02, in which case the Company’s right to such reimbursement shall be subsequent to the payment to the Purchasers of the Repurchase Price pursuant to such sections and all other amounts required to be paid to the Purchasers with respect to such Mortgage Loan;

(iv)   to pay itself interest on funds deposited in the Custodial Account;

(v)   to pay LPMI Fees in accordance with Section 5.15;

(vi)   to pay any amount required to be paid pursuant to Section 5.16 related to any REO Property, it being understood that in the case of any such expenditure or withdrawal related to a particular REO Property, the amount of such expenditure or withdrawal from the Custodial Account shall be limited to amounts on deposit in the Custodial Account with respect to the related REO Property;

(vii)   to clear and terminate the Custodial Account upon the termination of this Agreement; and

(viii)   to withdraw funds deposited in error.

In the event that the Custodial Account is interest bearing, on each Remittance Date, the Company shall withdraw all funds from the Custodial Account except for those amounts which, pursuant to Section 6.01, the Company is not obligated to remit on such Remittance Date. The Company may use such withdrawn funds only for the purposes described in this Section 5.05.

Section 5.06.   Establishment of and Deposits to Escrow Account .

The Company shall segregate and hold all funds collected and received pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from any of its own funds and general assets and shall establish and maintain one or more Escrow Accounts, in the form of time deposit or demand accounts, titled, “Countrywide Home Loans, Inc., in trust for Lehman Brothers Bank, purchaser of Residential Mortgage Loans, Group No. 2006-Flow, and various Mortgagors”. The Escrow Accounts shall be established with a Qualified Depository, in a manner which shall provide maximum available insurance thereunder. Funds deposited in the Escrow Account may be drawn on by the Company in accordance with Section 5.07. The creation of any Escrow Account shall be evidenced by a letter agreement in the form of Exhibit D hereto. A copy of such letter agreement shall be furnished to the Purchaser and, upon request, to any subsequent purchaser.

The Company shall deposit in the Escrow Account or Accounts within two Business Days of receipt, and retain therein:

(i)   all Escrow Payments collected on account of the Mortgage Loans, for the purpose of effecting timely payment of any such items as required under the terms of this Agreement; and

(ii)   all amounts representing Insurance Proceeds or Condemnation Proceeds which are to be applied to the restoration or repair of any Mortgaged Property.

The Company shall make withdrawals from the Escrow Account only to effect such payments as are required under this Agreement, as set forth in Section 5.07. The Company shall be entitled to retain any interest paid on funds deposited in the Escrow Account by the depository institution, other than interest on escrowed funds required by law to be paid to the Mortgagor. To the extent required by law, the Company shall pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or that interest paid thereon is insufficient for such purposes.

Section 5.07.   Permitted Withdrawals From Escrow Account .

Withdrawals from the Escrow Account or Accounts may be made by the Company only:

(i)   to effect timely payments of ground rents, taxes, assessments, water rates, mortgage insurance premiums, condominium charges, fire and hazard insurance premiums or other items constituting Escrow Payments for the related Mortgage;

(ii)   to reimburse the Company for any Servicing Advances made by the Company pursuant to Section 5.08 with respect to a related Mortgage Loan, but only from amounts received on the related Mortgage Loan which represent late collections of Escrow Payments thereunder;

(iii)   to refund to any Mortgagor any funds found to be in excess of the amounts required under the terms of the related Mortgage Loan;

(iv)   for transfer to the Custodial Account and application to reduce the principal balance of the Mortgage Loan in accordance with the terms of the related Mortgage and Mortgage Note;

(v)   for application to restoration or repair of the Mortgaged Property in accordance with the procedures outlined in Section 5.14;

(vi)   to pay to the Company, or any Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow Account;

(vii)   to clear and terminate the Escrow Account on the termination of this Agreement; and

(viii)   to withdraw funds deposited in error.

Section 5.08.   Payment of Taxes, Insurance and Other Charges .

(a)   With respect to each Mortgage Loan which provides for Escrow Payments, the Company shall maintain accurate records reflecting the status of ground rents, taxes, assessments, water rates, sewer rents, and other charges which are or may become a lien upon the Mortgaged Property and the status of PMI Policy, if any, and LPMI Policy premiums (if applicable) and fire and hazard insurance coverage and shall obtain, from time to time, all bills for the payment of such charges (including renewal premiums) and shall effect payment thereof prior to the applicable penalty or termination date, employing for such purpose deposits of the Mortgagor in the Escrow Account which shall have been estimated and accumulated by the Company in amounts sufficient for such purposes, as allowed under the terms of the Mortgage. The Company assumes full responsibility for the timely payment of all such bills and shall effect timely payment of all such charges irrespective of each Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments, and the Company shall make advances from its own funds to effect such payments.

(b)   To the extent that a Mortgage Loan does not provide for Escrow Payments, the Company shall determine that any such payments are made by the Mortgagor at the time they first become due.

Section 5.09.   Protection of Accounts .

The Company may transfer the Custodial Account or the Escrow Account to a different Qualified Depository from time to time. Upon any such transfer, the Company shall promptly notify the Purchaser and deliver to the Purchaser a Custodial Account Letter Agreement or Escrow Account Letter Agreement (as applicable) in the form of Exhibit C or D hereto.

The Company shall bear any expenses, losses or damages sustained by the Purchaser because the Custodial Account and/or the Escrow Account are not demand deposit accounts.

Amounts on deposit in the Custodial Account and the Escrow Account may at the option of the Company be invested in Eligible Investments; provided that in the event that amounts on deposit in the Custodial Accou