Washington Mutual Mortgage Securities Corp – ‘424B5’ on 11/13/01 re: Wamu Mortgage Pass Through Certificates Series 2001-AR4

On:  Tuesday, 11/13/01   ·   Accession #:  950117-1-501565   ·   File #s:  333-67140, -09

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Prospectus   —   Rule 424(b)(5)
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Document/Exhibit                   Description                      Pages   Size 

 1: 424B5       Washington Mutual 2001-Ar4 424B5                     143    798K 

Document Table of Contents

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PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 5, 2001 

WAMU MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2001-AR4 

WASHINGTON MUTUAL MORTGAGE SECURITIES CORP. 
DEPOSITOR AND MASTER SERVICER 

$706,710,100
(APPROXIMATE) 

CONSIDER CAREFULLY THE RISK                                                 
FACTORS BEGINNING ON PAGE S-10 IN                                           
THIS PROSPECTUS SUPPLEMENT AND                                              
PAGE 5 IN THE ACCOMPANYING                                                  
PROSPECTUS.                                                                 

The certificates will represent                                             
interests only in the trust                                                 
created for Series 2001-AR4 and                                             
will not represent interests in or                                          
obligations of Washington Mutual                                            
Mortgage Securities Corp.,                                                  
Washington Mutual, Inc. or any of                                           
their affiliates.                                                           

NEITHER THESE CERTIFICATES NOR THE                                          
UNDERLYING MORTGAGE LOANS ARE                                               
GUARANTEED BY ANY AGENCY OR                                                 
INSTRUMENTALITY OF THE UNITED                                               
STATES.                                                                     

This prospectus supplement may be                                           
used to offer and sell the offered                                          
certificates only if accompanied                                            
by the prospectus.                                                          

                            THE WAMU MORTGAGE SECURITIES CORP. SERIES 2001-AR4
                   TRUST WILL ISSUE EIGHT CLASSES OF OFFERED
                            CERTIFICATES AND THREE CLASSES OF PRIVATELY PLACED
                          CERTIFICATES. EACH CLASS OF CERTIFICATES WILL BE
                      ENTITLED TO RECEIVE MONTHLY DISTRIBUTIONS OF
                            INTEREST, PRINCIPAL OR BOTH. THE TABLE ON PAGE S-4
                          OF THIS PROSPECTUS SUPPLEMENT CONTAINS A LIST OF
                            THE CLASSES OF OFFERED CERTIFICATES, INCLUDING THE
                      INITIAL CLASS PRINCIPAL BALANCE, CERTIFICATE
                            INTEREST RATE, AND SPECIAL CHARACTERISTICS OF EACH
CLASS.                

OFFERED CERTIFICATES  

                                                                [Download Table]
                                                              
 Total principal amount (approximate)        $706,710,100     

 First payment date                          December 26, 2001

 Interest and/or principal paid              Monthly          

 Last possible payment date                  December 26, 2031

                            THE SENIOR CERTIFICATES ARE SUBJECT TO A MANDATORY
             AUCTION ON THE DISTRIBUTION DATE IN
                         SEPTEMBER 2006, AS DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT.           

                            Credit enhancement for the offered certificates is
                      being provided by three classes of privately
                       offered certificates, which have an aggregate
                        principal balance of approximately $4,268,410.

The underwriters listed below will offer the offered certificates at varying    
prices to be determined at the time of sale. The proceeds to Washington Mutual  
Mortgage Securities Corp. from the sale of the offered certificates will be     
approximately 99.78% of the principal balance of the offered certificates plus  
accrued interest, before deducting expenses. The underwriters' commission will  
be the difference between the price it pays to Washington Mutual Mortgage       
Securities Corp. for the offered certificates and the amount it receives from   
the sale of the offered certificates to the public.                             

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED 
OF THE OFFERED CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A     
CRIMINAL OFFENSE.                                                               

  Underwriters

GREENWICH CAPITAL MARKETS, INC.                                                 
KEEFE, BRUYETTE & WOODS, INC. 
                                                SANDLER O'NEILL & PARTNERS, L.P.

Dealer

WAMU CAPITAL
A DIVISION OF WASHINGTON MUTUAL BANK, FA

November 9, 2001

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IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS 

    We provide information to you about the offered certificates in two separate
documents that progressively provide more detail: (a) the accompanying          
prospectus, which provides general information, some of which may not apply to  
your series of certificates, and (b) this prospectus supplement, which describes
the specific terms of your series of certificates.                              

 IF THE TERMS OF YOUR CERTIFICATES VARY BETWEEN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THIS     
PROSPECTUS SUPPLEMENT.                                                          

We include cross-references in this prospectus supplement and the       
accompanying prospectus to captions in these materials where you can find       
further related discussions. The following table of contents and the table of   
contents included in the accompanying prospectus provide the pages on which     
these captions are located.                                                     

   You can find a listing of the pages where certain capitalized terms used in
this prospectus supplement and the accompanying prospectus are defined under the
caption 'Index of Terms' on page S-54 in this prospectus supplement and under   
the caption 'Index of Terms' beginning on page 86 in the accompanying           
prospectus. Capitalized terms used in this prospectus supplement and not        
otherwise defined in this prospectus supplement have the meanings assigned in   
the accompanying prospectus.                                                    

S-2 

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TABLE OF CONTENTS                                     

                                                                [Download Table]

                                         PAGE
                                         ----
                                             
SUMMARY INFORMATION...................    S-4
    What You Own......................    S-4
        Information About the Mortgage       
          Pool........................    S-4
    The Offered Certificates..........    S-4
        Initial Principal Balance of         
          the Certificates............    S-5
    Distributions On The                     
      Certificates....................    S-5
        Monthly Distributions.........    S-5
        Distributions of Interest.....    S-6
        Compensating Interest and            
          Interest Shortfalls.........    S-6
        Distributions of Principal....    S-6
    Mandatory Auction of the Class A         
      Certificates....................    S-7
    Credit Enhancements...............    S-7
    Allocation Of Losses..............    S-8
    Yield Considerations..............    S-8
    Book-Entry Registration...........    S-8
    Denominations.....................    S-8
    Legal Investment..................    S-8
    ERISA Considerations..............    S-8
    Federal Income Tax Consequences...    S-9
    Ratings...........................    S-9
RISK FACTORS..........................   S-10
THE TRUST.............................   S-16
DESCRIPTION OF THE MORTGAGE POOL......   S-16
    The Index.........................   S-17
    Additional Information............   S-18
DESCRIPTION OF THE CERTIFICATES.......   S-20
    General...........................   S-20
    Book-Entry Registration...........   S-21
    Definitive Certificates...........   S-22
    Priority of Distributions.........   S-23
    Distributions of Interest.........   S-24
    Distributions of Principal........   S-25
        General.......................   S-25
        Senior Principal Distribution        
          Amount......................   S-25
        Subordinate Principal                
          Distribution Amount.........   S-26
        Principal Prepayments.........   S-27
    Subordination and Allocation of          
      Losses..........................   S-27
    The Class R Certificates..........   S-29
    Advances..........................   S-29
    Available Distribution Amount.....   S-30
    Last Scheduled Distribution              
      Date............................   S-31
    Mandatory Auction of the Class A         
      Certificates....................   S-31
    Optional Termination of the              
      Trust...........................   S-31
    Servicing Compensation and Payment       
      of Expenses.....................   S-32
    Special Servicing Agreements......   S-32
    Purchase of Delinquent Mortgage          
      Loans...........................   S-33
    Reports to Certificateholders.....   S-33
DELINQUENCY, LOSS AND FORECLOSURE            
  EXPERIENCE..........................   S-33
YIELD AND PREPAYMENT CONSIDERATIONS...   S-35
    General...........................   S-35
    Principal Prepayments and                
      Compensating Interest...........   S-35
    Rate of Payments..................   S-36
    Prepayment Assumptions............   S-36
    Lack of Historical Prepayment            
      Data............................   S-38
    Yield Considerations with Respect        
      to the Senior Subordinate              
      Certificates....................   S-38
    Additional Yield Considerations          
      Applicable Solely to the Class R       
      Certificates....................   S-41
    Additional Information............   S-41
CREDIT ENHANCEMENTS...................   S-41
    Subordination.....................   S-41
    Shifting of Interests.............   S-42
CERTAIN FEDERAL INCOME TAX                   
  CONSEQUENCES........................   S-42
    Special Tax Considerations               
      Applicable to the Residual             
      Certificates....................   S-43
CERTAIN LEGAL INVESTMENT ASPECTS......   S-45
ERISA CONSIDERATIONS..................   S-46
    General...........................   S-46
    ERISA Considerations with Respect        
      to the Swap Agreement...........   S-47
METHOD OF DISTRIBUTION................   S-47
LEGAL MATTERS.........................   S-48
CERTIFICATE RATINGS...................   S-48
APPENDIX A: DECREMENT TABLES..........   S-49
APPENDIX B: MORTGAGE LOAN TABLES......   S-51
INDEX OF TERMS........................   S-54

S-3                                   

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SUMMARY INFORMATION 

THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS      
SUPPLEMENT. IT DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER
IN MAKING YOUR INVESTMENT DECISION. TO UNDERSTAND THE TERMS OF THE OFFERED      
CERTIFICATES, READ CAREFULLY THIS ENTIRE PROSPECTUS SUPPLEMENT AND THE          
ACCOMPANYING PROSPECTUS.                                                        

THIS SUMMARY PROVIDES AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOWS AND OTHER 
INFORMATION TO AID YOUR UNDERSTANDING. THIS SUMMARY IS QUALIFIED BY THE FULL    
DESCRIPTION OF THESE CALCULATIONS, CASH FLOWS AND OTHER INFORMATION IN THIS     
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS.                          

WHAT YOU OWN                                                                    

YOUR CERTIFICATES REPRESENT INTERESTS ONLY IN THE ASSETS OF THE TRUST. ALL      
PAYMENTS TO YOU WILL COME ONLY FROM THE AMOUNTS RECEIVED IN CONNECTION WITH     
THOSE ASSETS.                                                                   

The Trust contains a pool of mortgage loans and certain other assets, as        
described under 'The Trust' in this prospectus supplement.                      

INFORMATION ABOUT THE MORTGAGE POOL                                             

The mortgage pool consists of 1,252 mortgage loans with an aggregate principal  
balance as of November 1, 2001 of approximately $710,978,510. All of the        
mortgage loans are secured by residential properties or shares of cooperative   
apartments and each is set to mature within 30 years of the date it was         
originated. The mortgage loans deposited into the WaMu Mortgage Pass-Through    
Certificates Series 2001-AR4 Trust were purchased by Washington Mutual Mortgage 
Securities Corp. directly from Washington Mutual Bank, FA, Washington Mutual    
Bank, fsb and Washington Mutual Bank, a Washington state chartered savings bank,
in each case, an affiliate of Washington Mutual Mortgage Securities Corp.       

The mortgage loans provide for a fixed interest rate during an initial period of
approximately five years from the date of origination of each mortgage loan and 
thereafter provide for adjustments to the interest rate on an annual basis.     

After the initial fixed rate period, the interest rate on each mortgage loan    
will adjust to equal the sum of an index and a margin. Interest rate adjustments
may be subject to certain limitations stated in the related mortgage note with  
respect to increases and decreases for any adjustment. In addition, the interest
rate may be subject to an overall maximum, and may be subject to an overall     
minimum, interest rate.                                                         

The index will be the weekly average yield on United States Treasury Securities 
adjusted to a constant maturity of one year.                                    

For a further description of the mortgage loans, see 'Description of the        
Mortgage Pool' and Appendix B in this prospectus supplement.                    

THE OFFERED CERTIFICATES                                                        

Washington Mutual Mortgage Securities Corp. will deposit the mortgage loans into
the Trust. The Trust is being created for the purpose of issuing the WaMu       
Mortgage Pass-Through Certificates, Series 2001-AR4. The approximate initial    
class principal balance, annual certificate interest rate and type of each class
of the offered certificates will be as follows:                                 

                                                                [Download Table]

          APPROXIMATE         ANNUAL                     
         INITIAL CLASS      CERTIFICATE                  
CLASS  PRINCIPAL BALANCE   INTEREST RATE       TYPE      
---------------------------------------------------------
                                                         
A-1      $308,000,000           (1)           Senior     
A-2       104,000,000           (2)           Senior     
A-3       112,121,000           (3)           Senior     
A-4       163,750,000           (4)           Senior     
B-1         9,242,000       Variable(5)     Subordinate  
B-2         6,043,000       Variable(5)     Subordinate  
B-3         3,554,000       Variable(5)     Subordinate  
R                 100         2.784%      Senior/Residual

---------                                                                       
(1) For the initial distribution date, the annual certificate interest rate on  
   the Class A-1 Certificates will equal 2.784%. For each distribution date in
or before September 2006, the annual certificate interest rate on these 
certificates will equal the lesser of (x) 2.784% and (y) the weighted   
average of the mortgage interest rates on the mortgage loans (as of the 
second preceding due date) less the per annum rates at which each of the
fixed servicing fee and the master servicing fee is calculated (the     
    'WEIGHTED AVERAGE PASS-THROUGH RATE'). For each distribution date in October
2006 and thereafter, the annual certificate interest rate on these      
certificates will equal the Weighted Average Pass-Through Rate. See     
'Description of the Certificates --                                     

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Distributions of Interest' in this prospectus supplement.               

(2) For the initial distribution date, the annual certificate interest rate on  
   the Class A-2 Certificates will equal 3.963%. For each distribution date in
or before September 2006, the annual certificate interest rate on these 
certificates will equal the lesser of (x) 3.963% and (y) the Weighted   
Average Pass-Through Rate (as defined above in note 1). For each        
distribution date in October 2006 and thereafter, the annual certificate
interest rate on these certificates will equal the Weighted Average     
   Pass-Through Rate. See 'Description of the Certificates -- Distributions of
Interest' in this prospectus supplement.                                

(3) For the initial distribution date, the annual certificate interest rate on  
   the Class A-3 Certificates will equal 4.605%. For each distribution date in
or before September 2006, the annual certificate interest rate on these 
certificates will equal the lesser of (x) 4.605% and (y) the Weighted   
Average Pass-Through Rate (as defined above in note 1). For each        
distribution date in October 2006 and thereafter, the annual certificate
interest rate on these certificates will equal the Weighted Average     
   Pass-Through Rate. See 'Description of the Certificates -- Distributions of
Interest' in this prospectus supplement.                                

(4) For the initial distribution date, the annual certificate interest rate on  
   the Class A-4 Certificates will equal 4.654%. For each distribution date in
or before September 2006, the annual certificate interest rate on these 
certificates will equal the lesser of (x) 4.654% and (y) the Weighted   
Average Pass-Through Rate (as defined above in note 1). For each        
distribution date in October 2006 and thereafter, the annual certificate
interest rate on these certificates will equal the Weighted Average     
   Pass-Through Rate. See 'Description of the Certificates -- Distributions of
Interest' in this prospectus supplement.                                

(5) For the initial distribution date, the annual certificate interest rate on  
these certificates will equal approximately 5.793%. On each distribution
   date thereafter, the annual certificate interest rate on these certificates
will equal the Weighted Average Pass-Through Rate (as defined above in  
   note 1). See 'Description of the Certificates -- Distributions of Interest'
in this prospectus supplement.                                          

The Trust will also issue the Class B-4, Class B-5 and Class B-6 Certificates,  
which are not being offered by this prospectus supplement. These private        
certificates are subordinated to the offered certificates and provide credit    
enhancement for the offered certificates. See 'Description of the Certificates  
-- Subordination and Allocation of Losses' in this prospectus supplement.       

INITIAL PRINCIPAL BALANCE OF THE CERTIFICATES                                   

The initial aggregate principal balance of the certificates issued by the Trust 
is approximately $710,978,510, subject to an upward or downward variance of no  
more than 5%.                                                                   

The initial aggregate principal balance of the certificates have the following  
composition:                                                                    

  the senior certificates comprise approximately 96.75% of the principal balance
of the mortgage loans;                                                      

the Class B-1, Class B-2 and Class B-3 Certificates comprise approximately  
2.65% of the principal balance of the mortgage loans; and                   

  the privately offered Class B-4, Class B-5 and Class B-6 Certificates comprise
approximately 0.60% of the principal balance of the mortgage loans.         

DISTRIBUTIONS ON THE CERTIFICATES                                               

MONTHLY DISTRIBUTIONS                                                           

Each month, the trustee, Bankers Trust Company of California, N.A., will make   
distributions of interest and/or principal to the holders of the certificates.  
Distributions will be made on the 25th day of each month, or if the 25th day is 
not a business day, on the next business day. The first distribution date will  
be December 26, 2001.                                                           

Source of Payments. The mortgagors pay their interest and principal during the  
month to the servicer. Each month, the servicer subtracts its fixed servicing   
fee and sends the remainder to the master servicer. The master servicer then    
subtracts its master servicing fee and sends the remainder to the trustee. On   
the distribution date for that month, the trustee distributes that remaining    
amount to the holders of the certificates in the order described in 'Description
of the Certificates -- Priority of Distributions' in this                       

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prospectus supplement and to the servicer the variable servicing fee.           

Advances. For any month, if the master servicer receives a payment on a mortgage
loan that is less than the full scheduled payment or if no payment is received  
at all, the master servicer will advance its own funds to cover that shortfall. 
However, the master servicer will not be required to make advances if it        
determines that those advances will not be recoverable from future payments or  
collections on that mortgage loan. See 'Description of the Certificates --      
Advances' in this prospectus supplement.                                        

DISTRIBUTIONS OF INTEREST                                                       

Each class of offered certificates will accrue interest. On each distribution   
date interest will be distributed to these classes in the order described in    
'Description of the Certificates -- Priority of Distributions' in this          
prospectus supplement.                                                          

Interest to be distributed on the certificates on any distribution date will    
consist of accrued and unpaid interest as of previous distribution dates and    
interest accrued during the preceding calendar month, except for the Class A-1  
Certificates which accrue interest during the period beginning on the           
distribution date of the preceding calendar month (or in the case of the first  
distribution date, November 14, 2001) and ending on the day preceding that      
Distribution Date. Interest to be distributed on the certificates will be       
calculated based on a year consisting of twelve thirty-day months.              

It is possible that, on any given distribution date, there will be insufficient 
payments from the mortgage loans to make the interest distributions contemplated
in this prospectus supplement. If the master servicer does not advance its own  
funds, because it determines that the advance would be nonrecoverable, some     
certificates, most likely the subordinate certificates, may not receive the full
amount of accrued interest to which they are entitled. If this happens, those   
certificates will be entitled to receive any shortfall in interest distributions
in the following month in the same priority as their distribution of current    
interest. However, there will be no extra interest paid to make up for the      
delay.                                                                          

The amount of interest each class of certificates accrues during the applicable 
accrual period will equal 1/12th of the annual certificate interest rate in     
effect for that accrual period for that class multiplied by the related class   
principal balance. The principal balance used for this calculation on the first 
distribution date will be the applicable principal balance as of November 14,   
2001, which is the closing date. The principal balance used for this calculation
on each distribution date thereafter will be the applicable principal balance   
immediately after the preceding distribution date. The annual certificate       
interest rate for each class of offered certificates is described on pages S-4  
and S-5 of this prospectus supplement.                                          

COMPENSATING INTEREST AND INTEREST SHORTFALLS                                   

Prepayments in Full. When mortgagors make prepayments in full, they need not pay
a full month's interest. Instead, they are required to pay interest only to the 
date of their prepayment. To compensate certificateholders for the shortfall in 
interest this causes, the master servicer may pay compensating interest to the  
certificateholders out of the master servicing fee it collects, as well as from 
certain other sources. For a description of how compensating interest is        
allocated among the certificates as well as important limitations on the amount 
of compensating interest that will be allocated among the certificates, see     
'Description of the Certificates -- Distributions of Interest -- Compensating   
Interest' and 'Yield and Prepayment Considerations' in this prospectus          
supplement.                                                                     

Partial Prepayments. When mortgagors make partial prepayments, they do not pay  
interest on the amount of that prepayment. Certificateholders will receive no   
compensating interest to compensate them for the shortfall in interest this     
causes.                                                                         

DISTRIBUTIONS OF PRINCIPAL                                                      

General. As the mortgagors pay principal on the mortgage loans, that principal  
is passed on to the holders of the certificates. HOWEVER, NOT EVERY CLASS OF    
CERTIFICATES RECEIVES PRINCIPAL ON EACH DISTRIBUTION DATE.                      

Class A-1, Class A-2, Class A-3 and Class A-4 Certificates. On each distribution
date, all or a portion of the principal received or advanced on the mortgage    
loans will be distributed to the Class A-1, Class A-2, Class A-3 and Class A-4  
Certificates in the order of priority described in 'Description of the          
Certificates -- Distributions of                                                

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Principal -- Senior Principal Distribution Amount' in this prospectus           
supplement. HOWEVER, NOT ALL OF THESE CERTIFICATES WILL RECEIVE PRINCIPAL ON    
EACH DISTRIBUTION DATE. SEE APPENDIX A FOR A TABLE SHOWING, FOR EACH CLASS OF   
CERTIFICATES, THE RATE OF RETURN OF PRINCIPAL THAT WOULD RESULT FROM DIFFERENT  
RATES OF PREPAYMENTS ON THE MORTGAGE LOANS. However, if the subordinate         
certificates are no longer outstanding, then the Class A-1, Class A-2,          
Class A-3 and Class A-4 Certificates will not receive principal in the order of 
priority described in 'Description of the Certificates -- Distributions of      
Principal -- Senior Principal Distribution Amount' in this prospectus           
supplement. Instead, each of these classes of certificates will generally       
receive principal pro rata according to its class principal balance.            

Class B Certificates. THE CLASS B CERTIFICATES WILL GENERALLY RECEIVE NO        
DISTRIBUTIONS OF PRINCIPAL UNTIL THE DISTRIBUTION DATE IN DECEMBER 2008 unless  
prepayments on the mortgage loans exceed certain levels and the delinquencies   
and losses on the mortgage loans do not exceed certain limits. On each          
distribution date beginning in December 2008, the Class B-1, Class B-2, Class   
B-3, Class B-4, Class B-5 and Class B-6 Certificates will be entitled to receive
a portion of the principal received or advanced on all of the mortgage loans,   
pro rata, according to their respective class principal balances. However, under
certain conditions described in this prospectus supplement under 'Description of
the Certificates -- Priority of Distributions,' the amount of principal         
prepayments otherwise distributable to some classes of these Class B            
Certificates will instead be paid to other classes of these certificates        
with a higher priority.                                                         

Priority of Principal Distributions. Each class of certificates receives its    
principal entitlements in the order described in 'Description of the            
Certificates -- Priority of Distributions' in this prospectus supplement. It is 
possible that, on any given distribution date, there will be insufficient       
payments from the mortgage loans to make principal distributions as contemplated
in this prospectus supplement. As a result, some certificates, most likely the  
subordinate certificates, may not receive the full amount of principal          
distributions to which they are entitled.                                       

For a more detailed description of how distributions of principal will be       
allocated among the various classes of certificates, see 'Description of the    
Certificates -- Distributions of Principal' in this prospectus supplement.      

MANDATORY AUCTION OF THE CLASS A CERTIFICATES                                   

Before the distribution date in September 2006, Bankers Trust Company of        
California, N.A., in its capacity as auction administrator, will auction each of
the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates to third party   
investors.                                                                      

ON THE DISTRIBUTION DATE IN SEPTEMBER 2006, THESE CLASS A CERTIFICATES WILL BE  
TRANSFERRED TO THIRD-PARTY INVESTORS, IN RETURN FOR A DISTRIBUTION OF THE       
OUTSTANDING PRINCIPAL BALANCE OF THOSE CERTIFICATES PLUS, IN THE CASE OF THE    
CLASS A-2, CLASS A-3 AND CLASS A-4 CERTIFICATES, ACCRUED INTEREST (to the extent
received from the applicable third party investors and the swap counterparty).  

The auction administrator will enter into a swap agreement pursuant to which    
Greenwich Capital Derivatives, Inc., as the swap counterparty, will agree to pay
the excess, if any, of the outstanding principal balance of the certificates,   
plus accrued interest on certain of those certificates, over the amount received
in the auction. In the event that the amount received in the auction is greater 
than the principal balance of the certificates plus accrued interest if         
applicable, that excess will not be paid to the certificateholders.             

See 'Description of the Certificates -- Mandatory Auction of the Class A        
Certificates' in this prospectus supplement.                                    

CREDIT ENHANCEMENTS                                                             

Subordination. The senior certificates will receive distributions of interest   
and principal before the subordinate certificates are entitled to receive       
distributions of interest or principal. This provides credit enhancement to the 
senior certificates. In a similar fashion, each class of subordinate            
certificates will provide credit enhancement to all other subordinate           
certificates with lower numerical class designations.                           

Shifting of Interests. Unless credit enhancement to the senior certificates has 
reached a certain level and the delinquencies and losses on the mortgage loans  
do not exceed certain limits, the senior certificates will, in the aggregate,   
generally receive 100% of all principal payments received on the mortgage loans 
until the seventh anniversary of                                                

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the first distribution date. During the next four years the senior certificates 
will, in the aggregate, generally receive their pro rata share of scheduled     
principal payments and a disproportionately large, but decreasing, share of     
principal prepayments. This will result in a quicker return of principal to the 
senior certificates and increases the likelihood that holders of the senior     
certificates will be paid the full amount of principal to which they are        
entitled. For a more detailed description of how principal prepayments are      
allocated among the senior certificates and the subordinate certificates, see   
'Description of the Certificates -- Principal Prepayments' in this prospectus   
supplement.                                                                     

ALLOCATION OF LOSSES                                                            

Realized Losses. A loss is realized on a mortgage loan when the master servicer 
or applicable servicer determines that it has received all amounts it expects to
recover for that mortgage loan and the amounts are less than the outstanding    
principal balance of the mortgage loan and its accrued and unpaid interest.     
LOSSES WILL BE ALLOCATED TO THE CERTIFICATES BY DEDUCTING THE LOSSES FROM THE   
PRINCIPAL BALANCE OF THE CERTIFICATES WITHOUT MAKING ANY PAYMENTS TO THE        
CERTIFICATEHOLDERS. In general, the amount of losses will be allocated to the   
most junior class of subordinate certificates then outstanding. Except as stated
in the next paragraph, losses will be allocated to the senior certificates only 
after the principal balances of all of the subordinate certificates have been   
reduced to zero.                                                                

Special Hazard, Fraud and Bankruptcy Losses. Special hazard losses, fraud losses
and bankruptcy losses in excess of specified amounts will, in general, be       
allocated to all outstanding classes of certificates pro rata according to their
outstanding principal balances. THEREFORE, FOR THESE TYPES OF LOSSES IN EXCESS  
OF THE SPECIFIED AMOUNTS, THE SUBORDINATE CERTIFICATES DO NOT ACT AS CREDIT     
ENHANCEMENT FOR THE SENIOR CERTIFICATES. For a description of how much of these 
types of losses will be allocated to the subordinate certificates and how much  
will be allocated to all of the certificates, see 'Description of the           
Certificates -- Subordination and Allocation of Losses' in this prospectus      
supplement.                                                                     

YIELD CONSIDERATIONS                                                            

The yield to maturity on your certificates will depend upon, among other things:

the price at which the certificates are purchased;                          

the applicable annual certificate interest rate;                            

the rate of prepayments on the mortgage loans; and                          

whether the optional termination of the Trust occurs.                       

BOOK-ENTRY REGISTRATION                                                         

In general, the offered certificates, other than the Class R Certificates, will 
be available only in book-entry form through the facilities of The Depository   
Trust Company. See 'Description of the Certificates -- Book-Entry Registration' 
in this prospectus supplement.                                                  

DENOMINATIONS                                                                   

The certificates, other than the Class R Certificates, are offered in minimum   
denominations of $25,000 each and multiples of $1 in excess of $25,000. The     
Class R Certificates will have an initial class principal balance of $100 and   
will be offered in a single certificate that represents a 99.99% interest in its
class.                                                                          

LEGAL INVESTMENT                                                                

As of the date of their issuance, all of the offered certificates, other than   
the Class B-2 and Class B-3 Certificates, will be 'mortgage related securities' 
for purposes of the Secondary Mortgage Market Enhancement Act of 1984. See      
'Certain Legal Investment Aspects' in this prospectus supplement for important  
information concerning possible restrictions on ownership of the offered        
certificates by regulated institutions. You should consult your own legal       
advisors in determining whether and to what extent the offered certificates     
constitute legal investments for you.                                           

ERISA CONSIDERATIONS                                                            

Subject to important considerations described under 'ERISA Considerations' in   
this prospectus supplement and in the accompanying prospectus, the offered      
certificates, other than the Class R Certificates, will be eligible for purchase
by persons investing assets of employee benefit plans or individual retirement  
accounts. The Class A Certificates, however, may not be acquired or held by any 
person investing assets of any such plan                                        

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or account before the auction distribution date unless such acquisition and     
holding is eligible for the exemptive relief available under one of the class   
exemptions described in this prospectus supplement under 'ERISA Considerations  
-- ERISA Considerations With Respect to the Swap Agreement.' The Class R        
Certificates will not be eligible for purchase by any such plan or account.     
See 'ERISA Considerations' in this prospectus supplement and in the accompanying
prospectus.                                                                     

FEDERAL INCOME TAX CONSEQUENCES                                                 

For federal income tax purposes, Washington Mutual Mortgage Securities Corp.    
will cause two REMIC elections to be made with respect to the Trust. The        
certificates, other than the Class R Certificates, will represent ownership of  
regular interests and will generally be treated as representing ownership of    
debt for federal income tax purposes. You will be required to include in income 
all interest and original issue discount on these certificates in accordance    
with the accrual method of accounting regardless of your usual methods of       
accounting. For federal income tax purposes, the Class R Certificates will      
represent ownership of residual interests.                                      

For further information regarding the federal income tax consequences of        
investing in the offered certificates, including important information regarding
the tax treatment of the Class R Certificates, see 'Certain Federal Income Tax  
Consequences' in this prospectus supplement and in the accompanying prospectus. 

RATINGS                                                                         

The offered certificates are required to receive the ratings from Standard &    
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. and      
Moody's Investors Service, Inc. indicated under 'Certificate Ratings' in this   
prospectus supplement. The ratings on the offered certificates address the      
likelihood of the receipt by holders of the offered certificates of all         
distributions on the underlying mortgage loans to which they are entitled. They 
do not address the likely actual rate of prepayments. The rate of prepayments,  
if different than originally anticipated, could adversely affect the yield      
realized by holders of the offered certificates.                                

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RISK FACTORS

   THE OFFERED CERTIFICATES ARE NOT SUITABLE INVESTMENTS FOR ALL INVESTORS. IN
PARTICULAR, YOU SHOULD NOT PURCHASE ANY CLASS OF OFFERED CERTIFICATES UNLESS YOU
UNDERSTAND AND ARE ABLE TO BEAR THE PREPAYMENT, CREDIT, LIQUIDITY AND MARKET    
RISKS ASSOCIATED WITH THAT CLASS.                                               

    THE OFFERED CERTIFICATES ARE COMPLEX SECURITIES AND IT IS IMPORTANT THAT YOU
POSSESS, EITHER ALONE OR TOGETHER WITH AN INVESTMENT ADVISOR, THE EXPERTISE     
NECESSARY TO EVALUATE THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT   
AND THE ACCOMPANYING PROSPECTUS IN THE CONTEXT OF YOUR FINANCIAL SITUATION.     

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THERE IS NO GUARANTEE THAT YOU WILL RECEIVE     As the mortgagors make payments of interest and    
PRINCIPAL PAYMENTS ON YOUR CERTIFICATES AT ANY  principal on their mortgage loans, you will receive
SPECIFIC RATE OR ON ANY SPECIFIC DATES          payments. Because the mortgagors are free to make  
                                                those payments faster than scheduled, you may      
                                                receive distributions faster than you expected.    
                                                There is no guarantee that you will receive        
                                                principal payments on your certificates at any     
                                                specific rate or on any specific dates.            

THE YIELD ON YOUR CERTIFICATES IS DIRECTLY      The yield to maturity on your certificates is      
RELATED TO THE PREPAYMENT RATE ON THE MORTGAGE  directly related to the rate at which the          
LOANS                                           mortgagors pay principal on the mortgage loans.    
                                                Principal payments on the mortgage loans may be in 
                                                the following forms:                               

                                                  scheduled principal payments; and                

                                                  principal prepayments, which consist of:         

                                                    prepayments in full on a mortgage loan;        

                                                    partial prepayments on a mortgage loan; and    

                                                    liquidation principal, which is the principal  
                                                    recovered after foreclosing on or otherwise    
                                                    liquidating a defaulted mortgage loan.         

                                                Each mortgage loan in the Trust is an              
                                                adjustable-rate mortgage loan with an initial      
                                                fixed-rate period. In general, during the initial  
                                                fixed-rate period, if prevailing mortgage interest 
                                                rates decline significantly below the mortgage     
                                                interest rates on the mortgage loans in the Trust, 
                                                the prepayment rate may increase. General economic 
                                                conditions and homeowner mobility will also affect 
                                                the prepayment rate. Each mortgage loan contains a 
                                                'due-on-sale' clause; however, the lender is       
                                                prohibited from exercising that 'due-on-sale'      
                                                clause if prohibited by applicable law or if       
                                                certain conditions specified in the mortgage note  
                                                are satisfied. Therefore, the sale of any mortgaged
                                                property may cause a prepayment in full on the     
                                                related mortgage loan. See 'Yield and Prepayment   
                                                Considerations' in this prospectus supplement and  
                                                'Maturity, Average Life and Prepayment Assumptions'
                                                in the prospectus. The prepayment rate may affect  
                                                the yield on all of the offered certificates.      

                                                Washington Mutual Mortgage Securities Corp. is not 
                                                aware of any publicly available statistics that set
                                                forth principal prepayment experience or prepayment
                                                forecasts of mortgage loans of the type included in
                                                the Trust over an extended period of time, and the 
                                                experience with respect                            

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                                              to the mortgage loans included in the Trust is     
                                              insufficient to draw any conclusions with respect  
                                              to the expected prepayment rates on such mortgage  
                                              loans. As is the case with conventional fixed-rate 
                                              mortgage loans, adjustable-rate mortgage loans     
                                              during the initial fixed-rate period may be subject
                                              to a greater rate of principal prepayments in a    
                                              declining interest rate environment. If prevailing 
                                              mortgage interest rates fall significantly,        
                                              adjustable-rate mortgage loans could be subject to 
                                              higher prepayment rates either before or after the 
                                              interest rates on the mortgage loans begin to      
                                              adjust than if prevailing mortgage interest rates  
                                              remain constant because the availability of        
                                              fixed-rate mortgage loans at competitive interest  
                                              rates may encourage mortgagors to refinance their  
                                              mortgage loans to 'lock in' lower fixed interest   
                                              rates. The features of adjustable-rate mortgage    
                                              loan programs during the past years have varied    
                                              significantly in response to market conditions     
                                              including the interest-rate environment, consumer  
                                              demand, regulatory restrictions and other factors. 
                                              The lack of uniformity of the terms and provisions 
                                              of such adjustable-rate mortgage loan programs have
                                              made it impracticable to compile meaningful        
                                              comparative data on prepayment rates and,          
                                              accordingly, we cannot assure you as to the rate of
                                              prepayments on the mortgage loans in stable or     
                                              changing interest rate environments.               

                                              On October 31, 2001, the United States Treasury    
                                              Department announced that it was suspending        
                                              issuance of its 30-year bonds. It is possible that 
                                              this development could lead to generally lower     
                                              mortgage loan interest rates and a resulting       
                                              increased level of mortgage loan refinancings,     
                                              which could accelerate mortgage loan prepayment    
                                              rates over previously experienced levels.          

                                              From time to time, Washington Mutual Mortgage      
                                              Securities Corp. or its servicers, including       
                                              Washington Mutual Bank, FA, may implement programs 
                                              to solicit mortgagors of qualifying mortgage loans 
                                              that they service for refinance, including mortgage
                                              loans underlying the certificates. While those     
                                              programs will not specifically target the mortgage 
                                              loans underlying the certificates for refinance,   
                                              they may have the effect of accelerating the       
                                              prepayment rate of those mortgage loans, which     
                                              would adversely affect the yield on all classes of 
                                              certificates purchased at a premium.               

THE YIELD ON YOUR CERTIFICATES WILL ALSO BE   The mortgage interest rate on each mortgage loan   
AFFECTED BY CHANGES IN THE MORTGAGE INTEREST  will be fixed for an initial period of             
RATE                                          approximately five years from the date of          
                                              origination of that mortgage loan. Thereafter, each
                                              mortgage loan provides for adjustments to the      
                                              interest rate on an annual basis. The interest rate
                                              on each mortgage loan will adjust to equal the sum 
                                              of an index and a margin. Interest rate adjustments
                                              may be subject to limitations stated in the        
                                              mortgage note with respect to increases and        
                                              decreases for any adjustment (i.e., a 'periodic    
                                              cap'). In addition, the interest rate may be       

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                                                subject to an overall maximum and minimum interest    
                                                rate. See 'Description of the Mortgage Pool' in       
                                                this prospectus supplement.                           

                                                The annual certificate interest rates may decrease,   
                                                and may decrease significantly, after the mortgage    
                                                interest rates on the mortgage loans begin to         
                                                adjust as a result of, among other factors, the       
                                                dates of adjustment, the margins, changes in the      
                                                index and any applicable periodic cap or lifetime     
                                                rate change limitations. Each mortgage loan has a     
                                                maximum mortgage interest rate and a minimum          
                                                mortgage interest rate. In some cases, the minimum    
                                                mortgage interest rate may be the applicable          
                                                margin. In the event that, despite prevailing         
                                                market interest rates, the mortgage interest rate     
                                                on any mortgage loan cannot increase due to a         
                                                maximum mortgage interest limitation or a periodic    
                                                cap, the yield on the Class B-1, Class B-2 and        
                                                Class B-3 Certificates and, after the distribution    
                                                date in September 2006, the Class A-1, Class A-2,     
                                                Class A-3 and Class A-4 Certificates, would be        
                                                adversely affected. See 'Description of the           
                                                Mortgage Pool' and 'Yield and Prepayment              
                                                Considerations' in this prospectus supplement.        

AN OPTIONAL TERMINATION OF THE TRUST MAY        When the aggregate principal balance of the           
ADVERSELY AFFECT THE OFFERED CERTIFICATES       mortgage loans in the Trust has been reduced to       
                                                less than 5% of that balance as of November 1,        
                                                2001, the master servicer may repurchase all of the   
                                                mortgage loans in the Trust, which will terminate     
                                                the Trust. See 'Description of the Certificates --    
                                                Optional Termination of the Trust' in this prospectus 
                                                supplement and 'Description of the Certificates --    
                                                Termination' in the prospectus. If this happens, the  
                                                repurchase price paid by the master servicer will be  
                                                passed through to the certificateholders. This        
                                                would have the same effect as if all of the remaining 
                                                mortgagors made prepayments in full. Any class of     
                                                certificates purchased at a premium could be adversely
                                                affected by an optional termination of the Trust.     

POSSESSION BY A SUBSEQUENT PURCHASER OF THE     The trustee will not have physical possession of      
MORTGAGE NOTES AND MORTGAGES COULD DEFEAT THE   the mortgage notes and mortgages related to the       
INTERESTS OF THE TRUSTEE IN THE MORTGAGE NOTES  mortgage loans in the Trust. In addition, the         
AND MORTGAGES                                   trustee will not conduct any independent review or    
                                                examination of the related mortgage files. Instead,   
                                                to facilitate servicing and reduce administrative     
                                                costs, Washington Mutual Bank, FA, as servicer and    
                                                custodian, will retain possession of and will         
                                                review the mortgage notes and mortgages. The          
                                                mortgage notes will not be endorsed, and the          
                                                mortgages will not be assigned, to the trustee.       
                                                Furthermore, the mortgage notes and mortgages will    
                                                not be stamped or otherwise marked to reflect the     
                                                assignment to Washington Mutual Mortgage Securities   
                                                Corp. and then to the trustee. If a subsequent        
                                                purchaser were able to take physical possession of    
                                                the mortgage notes and mortgages without knowledge    
                                                of that assignment, the interests of the trustee in   
                                                the mortgage notes and mortgages could be defeated.   
                                                In that event,                                        

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                                                distributions to certificateholders may be              
                                                adversely affected.                                     

WHEN YOUR CLASS A CERTIFICATES ARE TRANSFERRED  If you hold a Class A-1, Class A-2, Class A-3 or        
ON THE AUCTION DISTRIBUTION DATE, YOU MAY NOT   Class A-4 Certificate on the distribution date in       
RECEIVE PAR FOR THOSE CLASS A CERTIFICATES IF   September 2006, your certificate will be                
THE MONEY AVAILABLE UNDER THE AUCTION AND THE   transferred to third-party investors on that            
SWAP AGREEMENT IS INSUFFICIENT                  distribution date, thereby ending your investment       
                                                in that certificate.                                    

                                                If the outstanding principal balance of any of          
                                                these classes of certificates plus, in the case of      
                                                the Class A-2, Class A-3 and Class A-4                  
                                                Certificates, accrued interest is greater than the      
                                                amount received in the auction, Greenwich Capital       
                                                Derivatives, Inc., an affiliate of an underwriter,      
                                                pursuant to a swap agreement, will be obligated to      
                                                pay the amount of that excess to the auction            
                                                administrator for distribution to the holders of        
                                                the certificates. That obligation of Greenwich          
                                                Capital Derivatives, Inc. is guaranteed by The          
                                                Royal Bank of Scotland plc, an affiliate of an          
                                                underwriter. If Greenwich Capital Derivatives, Inc.     
                                                and The Royal Bank of Scotland plc default on their     
                                                obligations under the swap agreement and the swap       
                                                guarantee, respectively, you may receive an amount      
                                                less than the outstanding principal balance of your     
                                                certificate plus accrued interest (if applicable)       
                                                on the applicable distribution date. In addition,       
                                                if those parties default and if not all of a class      
                                                of certificates is purchased by third-party             
                                                investors in the auction, then your certificate (or     
                                                part of your certificate) may not be transferred,       
                                                in which case you will not receive any proceeds         
                                                from the auction and you will retain your               
                                                certificate.                                            

CERTIFICATES BOUGHT AT PREMIUMS AND DISCOUNTS   If you purchase a certificate at a discount from        
MAY RECEIVE A LOWER YIELD THAN EXPECTED         its original principal balance and the rate of          
                                                principal payments is slower than you expect, your      
                                                yield may be lower than you anticipate. If you          
                                                purchase a certificate at a premium over its            
                                                original principal balance and the rate of              
                                                principal payments is faster than you expect, your      
                                                yield may be lower than you anticipate.                 

LOSSES ON THE MORTGAGE LOANS WILL REDUCE THE    The yield to maturity on the Class B-1, Class B-2       
YIELD ON THE CERTIFICATES                       and Class B-3 Certificates will be extremely            
                                                sensitive to most losses on the mortgage loans.         
                                                After the aggregate principal balance of the            
                                                Class B-4, Class B-5 and Class B-6 Certificates         
                                                has been reduced to zero, most losses on the            
                                                mortgage loans will be allocated exclusively to the     
                                                Class B-1, Class B-2 and Class B-3 Certificates in      
                                                reverse numerical order.                                

                                                In addition, if the aggregate principal balance of      
                                                the subordinate certificates has been reduced to        
                                                zero, all further losses on the mortgage loans will     
                                                be allocated pro rata to the senior certificates.       
                                                See 'Description of the Certificates -- Subordination   
                                                and Allocation of Losses' in this prospectus supplement.

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THE INTEREST ONLY LOANS HAVE A GREATER DEGREE OF  Approximately 53.5% of the mortgage loans (by      
RISK IF A DEFAULT OCCURS                          principal balance as of November 1, 2001) do not   
                                                  provide for any payments of principal before their 
                                                  first adjustment date. These mortgage loans may    
                                                  involve a greater degree of risk since if the      
                                                  mortgagor defaults, the principal balance          
                                                  outstanding will be higher than for an amortizing  
                                                  mortgage loan.                                     

THE LACK OF SECONDARY MARKETS MAY MAKE IT         A secondary market for the offered certificates may
DIFFICULT FOR YOU TO RESELL YOUR CERTIFICATES     not develop. If a secondary market does develop, it
                                                  might not continue or it might not be sufficiently 
                                                  liquid to allow you to resell any of your          
                                                  certificates. The offered certificates will not be 
                                                  listed on any securities exchange.                 

THE LACK OF PHYSICAL CERTIFICATES FOR CERTAIN     You will NOT have a physical certificate if you own
CERTIFICATES MAY CAUSE DELAYS IN PAYMENT AND      a Class A-1, Class A-2, Class A-3, Class A-4,      
CAUSE DIFFICULTIES IN PLEDGING OR SELLING YOUR    Class B-1, Class B-2 or Class B-3 Certificate. As  
CERTIFICATES                                      a result, you will be able to transfer your        
                                                  certificates only through The Depository Trust     
                                                  Company, participating organizations, indirect     
                                                  participants and certain banks. The ability to     
                                                  pledge a certificate of one of these classes to a  
                                                  person that does not participate in the DTC system 
                                                  may be limited because of the lack of a physical   
                                                  certificate. In addition, you may experience some  
                                                  delay in receiving distributions on these          
                                                  certificates because the trustee will not send     
                                                  distributions directly to you. Instead, the trustee
                                                  will send all distributions to The Depository Trust
                                                  Company, which will then credit those distributions
                                                  to the participating organizations. Those          
                                                  organizations will in turn credit accounts you have
                                                  either directly with them or indirectly with them  
                                                  through indirect participants. Also, because       
                                                  investors may be unwilling to purchase certificates
                                                  without delivery of a physical certificate, these  
                                                  certificates may be less liquid in any secondary   
                                                  market that may develop.                           

THE DESTRUCTION OF THE WORLD TRADE CENTER AND     On September 11, 2001, the World Trade Center in   
THE CONSEQUENCES THEREOF MAY ADVERSELY IMPACT     New York, New York, was destroyed and the Pentagon 
THE PERFORMANCE OF YOUR CERTIFICATES              in Washington, D.C., was severely damaged. These   
                                                  events, including the circumstances under which    
                                                  they occurred, and their potential consequences,   
                                                  have caused significant uncertainty with respect to
                                                  global markets. The short term and long term impact
                                                  of these events and their potential consequences   
                                                  are uncertain, but could have a material adverse   
                                                  effect on general economic conditions, consumer    
                                                  confidence and market liquidity. No assurance can  
                                                  be given as to the effect of these events on the   
                                                  rate of delinquencies and losses on the mortgage   
                                                  loans and servicing decisions made with respect to 
                                                  the mortgage loans. The holders of the offered     
                                                  certificates would bear any adverse impact on the  
                                                  mortgage loans as a result of these events as      
                                                  described in this prospectus supplement.           

                                                  In response to the events which occurred on        
                                                  September 11, 2001, President Bush approved the    
                                                  request of the Secretary of Defense to call        
                                                  reservists to active military duty. Calling        
                                                  reservists and civilians to active                 

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                                                  military duty may adversely affect the performance 
                                                  of your certificates. Under the Soldiers' and      
                                                  Sailors' Civil Relief Act of 1940, as amended (the 
                                                  'RELIEF ACT'), persons on active military service  
                                                  are provided relief from the performance of certain
                                                  obligations. The relief includes a 6.000% per annum
                                                  interest rate cap on each mortgage loan, provided  
                                                  that the mortgage loan was obtained prior to the   
                                                  commencement of active military service. In        
                                                  addition, all civil court actions, such as         
                                                  bankruptcy and foreclosure proceedings, are        
                                                  delayed.                                           

                                                  The application of the interest rate cap to any    
                                                  mortgage loan underlying the certificates would    
                                                  result in certificateholders receiving less        
                                                  interest than they would otherwise be entitled to. 
                                                  The interest shortfall on any distribution date    
                                                  arising out of each of these mortgage loans would  
                                                  be equal to one month of interest on the principal 
                                                  balance of the mortgage loan at a rate equal to the
                                                  difference between the interest rate payable by the
                                                  borrower under the terms of the applicable mortgage
                                                  note and 6.000%. The interest shortfall would be   
                                                  deducted from the interest payable to each class of
                                                  certificates, pro rata, in accordance with interest
                                                  accrued on each class of certificates for the      
                                                  applicable distribution date.                      

                                                  The effect of a delay in foreclosure proceedings   
                                                  with respect to any mortgage loan underlying the   
                                                  certificates would be to cause a loss, or increase 
                                                  the severity of any loss that would have otherwise 
                                                  occurred, upon the final liquidation of the        
                                                  mortgage loan. These losses would first be applied 
                                                  to the Class B-6, Class B-5, Class B-4,            
                                                  Class B-3, Class B-2 and Class B-1 Certificates, in
                                                  that order, and then, pro rata, to the senior      
                                                  certificates.                                      

THE GEOGRAPHIC CONCENTRATION OF THE MORTGAGED     Approximately 63.2% of the mortgage loans (by      
PROPERTIES RELATING TO THE MORTGAGE LOANS IN THE  principal balance as of November 1, 2001) are      
STATE OF CALIFORNIA INCREASES THE EXPOSURE OF     secured by mortgaged properties located in         
THE MORTGAGE POOL TO ADVERSE CONDITIONS IN THAT   California. The economy of California may be       
STATE                                             adversely affected to a greater degree than the    
                                                  economies of other areas of the country by         
                                                  developments affecting industries concentrated in  
                                                  California. In addition, mortgaged properties      
                                                  located in California may be more susceptible to   
                                                  certain types of hazards, such as wildfires and    
                                                  mudslides, and certain types of special hazards not
                                                  covered by standard hazard insurance, such as      
                                                  earthquakes, than properties located in other parts
                                                  of the country. Consequently, losses and           
                                                  prepayments on the mortgage loans and the resultant
                                                  payments on the certificates may be adversely      
                                                  affected by the high concentration of mortgaged    
                                                  properties in California.                          

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THE TRUST 

  The pooling agreement between Washington Mutual Mortgage Securities Corp.,
as depositor and master servicer, and Bankers Trust Company of California, N.A.,
as trustee, will establish a trust (the 'TRUST'). A pool of mortgage loans will 
be assigned to the Trust. The mortgage pool will be the primary asset of the    
Trust. The Trust will own the right to receive all payments of principal and    
interest on the mortgage loans due after November 1, 2001 (the 'CUT-OFF DATE'). 
In exchange for the mortgage loans and other property, the trustee will         
authenticate and deliver the certificates to Washington Mutual Mortgage         
Securities Corp. A schedule to the pooling agreement will include information   
about each mortgage loan, including:                                            

      the outstanding principal balance as of the close of business on the
Cut-Off Date;                                                 

the term of the mortgage loan; and                            

       the mortgage interest rate as of the close of business on the Cut-off
     Date and information about how that mortgage interest rate adjusts.

The Trust will also contain other property, including:                  

         insurance policies related to individual mortgage loans, if applicable;

        any property that Washington Mutual Mortgage Securities Corp. acquires
 after the Cut-Off Date as a result of foreclosure or threatened
foreclosure of a mortgage loan; and                           

         amounts held in the Certificate Account (as described on page 28 of the
accompanying prospectus).                                     

  The pooling agreement permits Washington Mutual Mortgage Securities Corp.,
as the master servicer, to place funds that would otherwise be held in the      
Certificate Account into an Investment Account and invest them in Eligible      
Investments for its own benefit, before those funds are to be distributed to    
certificateholders.                                                             

DESCRIPTION OF THE MORTGAGE POOL* 

The mortgage pool will consist of 1,252 mortgage loans that will have an
aggregate principal balance as of the Cut-Off Date, after deducting payments due
on or before that date, of approximately $710,978,510. Certain of the risks of  
loss on some mortgage loans will be covered up to specified limits by primary   
insurance policies.                                                             

    The mortgage loans are secured by first mortgages or first deeds of trust or
other similar security instruments creating first liens on one- to four-family  
residential properties or shares of stock relating to cooperative apartments.   
These mortgaged properties, which may include detached homes, duplexes,         
townhouses, individual condominium units, individual units in planned unit      
developments and other                                                          

---------                                                                       
* The description of the mortgage pool and the mortgaged properties in this     
section and in Appendix B is based on the mortgage loans as of the close of 
  business on the Cut-Off Date, after deducting the scheduled principal payments
due on or before that date, whether or not actually received. All references
in this prospectus supplement to 'principal balance' refer to the principal 
balance as of the Cut-Off Date, unless otherwise specifically stated or     
required by the context. Due to rounding, percentages may not sum to 100%.  
References to percentages of mortgage loans refer in each case to the       
 percentage of the aggregate principal balance of the mortgage loans, based on
the outstanding principal balances of the mortgage loans after giving effect
 to scheduled monthly payments due on or prior to the Cut-Off Date. References
to weighted averages refer in each case to weighted averages by principal   
balance as of the Cut-Off Date of the mortgage loans determined in the same 
way as described in the previous sentence. Before the issuance of the       
  certificates, mortgage loans may be removed from the mortgage pool as a result
 of Payoffs, delinquencies or otherwise. If that happens, other mortgage loans
may be included in the mortgage pool. Washington Mutual Mortgage Securities 
Corp. believes that the information in this prospectus supplement for the   
  mortgage pool is representative of the characteristics of the mortgage pool as
  it will actually be constituted when the certificates are issued, although the
range of mortgage interest rates and other characteristics of the mortgage  
 loans in the mortgage pool may vary. See ' -- Additional Information' in this
prospectus supplement.                                                      

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attached dwelling units which are part of buildings consisting of more than four
units (so long as the mortgaged property consists of no more than four units    
other than cooperative apartments), have the additional characteristics         
described below and in the prospectus.                                          

Each mortgage loan will have a first payment date during the period from
April 2000 through December 2001, inclusive, and will have an original term to  
maturity of not more than 30 years. Except for the Interest Only Loans (as      
defined below), all mortgage loans will have principal and interest payable on  
the first day of each month (the 'DUE DATE'). The Interest Only Loans will only 
have interest payable on each Due Date until the first interest adjustment date,
after which they will have interest and principal payable on each Due Date.     

Each mortgage loan will be a conventional mortgage loan evidenced by a  
mortgage note. Each mortgage loan has a fixed mortgage interest rate for        
approximately the first five years after the origination of that mortgage loan. 
Each mortgage note will provide for adjustments to the mortgage interest rate   
thereon at the end of the fixed-rate period and annually thereafter (each, an   
'ADJUSTMENT DATE'). On each Adjustment Date, the mortgage interest rate will    
adjust to the sum of the Index and the number of basis points specified in the  
applicable mortgage note (the 'MARGIN'), rounded to the nearest one-eighth of   
one percent, subject to the limitation that the mortgage interest rate after    
such adjustment on each Adjustment Date may not vary from the mortgage interest 
rate in effect prior to such adjustment by more than a specified number of      
percentage points (the 'PERIODIC CAP'). In addition, adjustments to the mortgage
interest rate for each mortgage loan are subject to a lifetime maximum interest 
rate (a 'RATE CEILING'). Each mortgage loan specifies a lifetime minimum        
interest rate (a 'RATE FLOOR') which in some cases is equal to the Margin for   
that mortgage loan. Each mortgage loan contains a 'due-on-sale' clause; however,
the lender is prohibited from exercising that 'due-on-sale' clause if prohibited
by applicable law or if certain conditions specified in the mortgage note are   
satisfied. None of the mortgage loans are assumable during the fixed-rate       
period. On the first Due Date following each Adjustment Date for each mortgage  
loan, the monthly payment for the mortgage loan will be adjusted, if necessary, 
to an amount that will fully amortize such mortgage loan at the adjusted        
mortgage interest rate over its remaining scheduled term to maturity.           

The mortgage loans deposited into the WaMu Mortgage Pass-Through        
Certificates Series 2001-AR4 Trust were purchased by Washington Mutual Mortgage 
Securities Corp. directly from Washington Mutual Bank, FA, Washington Mutual    
Bank, fsb and Washington Mutual Bank, a Washington state chartered savings bank,
in each case, an affiliate of Washington Mutual Mortgage Securities Corp.       

 None of the mortgage loans will be buydown loans. As of the Cut-Off Date,
approximately 2.1% of the mortgage loans were covered by a primary insurance    
policy. All of the mortgage loans with loan-to-value ratios as of the Cut-Off   
Date in excess of 80% were covered by a primary insurance policy.               

As of the Cut-Off Date, approximately 4.3% of the mortgage loans impose 
penalties for early prepayments. The prepayment penalty is in effect from one to
three years after the origination of those mortgage loans.                      

As of the Cut-Off Date, approximately 53.5% of the mortgage loans do not
provide for any payments of principal prior to their first Adjustment Date      
(each, an 'INTEREST ONLY LOAN').                                                

SEE APPENDIX B FOR A DETAILED DESCRIPTION OF THE MORTGAGE LOANS.        

THE INDEX                                                                       

  The Index is the weekly average yield on United States Treasury Securities
adjusted to a constant maturity of one year, as made available by the Federal   
Reserve Board, published in Federal Reserve Statistical Release H.15(519) and   
most recently available as of the date 45 days before the applicable Adjustment 
Date. In the event such Index is no longer available, the master servicer will  
select a substitute Index in accordance with the terms of the related mortgage  
note and in compliance with federal and state law.                              

Listed below are historical values of certain average yields, which are 
related to the Index. The values shown are the average monthly yields on United 
States Treasury Securities adjusted to a constant maturity of one-year for the  
months indicated, published by the Federal Reserve Board. By contrast, the      

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Index is determined by reference to a weekly average yield on United States     
Treasury Securities adjusted to a constant maturity of one year, rather than    
such monthly average yields. The monthly averages shown are intended only to    
provide an historical summary of the movements in yields on United States       
Treasury Securities adjusted to a constant maturity of one year and may not be  
indicative of future rates. The source of the values shown below is Federal     
Reserve Statistical Release H.15(519).                                          

                                                        [Enlarge/Download Table]

                     MONTH                      2001    2000   1999   1998   1997   1996 
                     -----                      ----    ----   ----   ----   ----   ---- 
                                                                                         
January........................................  4.81%  6.12%  4.51%  5.24%  5.61%  5.09%
February.......................................  4.68%  6.22%  4.70%  5.31%  5.53%  4.94%
March..........................................  4.30%  6.22%  4.78%  5.39%  5.80%  5.34%
April..........................................  3.98%  6.15%  4.69%  5.38%  5.99%  5.54%
May............................................  3.78%  6.33%  4.85%  5.44%  5.87%  5.64%
June...........................................  3.58%  6.17%  5.10%  5.41%  5.69%  5.81%
July...........................................  3.62%  6.08%  5.03%  5.36%  5.54%  5.85%
August.........................................  3.47%  6.18%  5.20%  5.21%  5.56%  5.67%
September......................................  2.82%  6.13%  5.25%  4.71%  5.52%  5.83%
October........................................  2.33%  6.01%  5.43%  4.12%  5.46%  5.55%
November.......................................         6.09%  5.55%  4.53%  5.46%  5.42%
December.......................................         5.60%  5.84%  4.52%  5.53%  5.47%

ADDITIONAL INFORMATION                                                          

Appendix B contains important information about the mortgage loans      
including:                                                                      

      the mortgage interest rates, the Pass-Through Rates and the original
principal balances of the mortgage loans;                     

         the initial Adjustment Dates, the Margins, the Rate Floors and the Rate
Ceilings;                                                     

       the years in which initial monthly payments on the mortgage loans are
due;                                                          

        the loan-to-value ratios of the mortgage loans as of the Cut-Off Date;

the types of mortgaged properties;                            

   the geographic distribution by state of the mortgaged properties;

     the scheduled maturity years of the mortgage loans and the weighted
average remaining term to maturity of the mortgage loans;     

the original terms to maturity of the mortgage loans;         

   the number of mortgage loans originated under full documentation,
       reduced documentation, no documentation or no ratio programs, if any;

        the stated owner occupancy status of the mortgaged properties when the
mortgage loans were originated;                               

the mortgagor's purpose of financing;                         

         the number of multiple mortgage loans, if any, included in the mortgage
pool made to a single borrower; and                           

the credit score ranges.                                      

  The credit score tables appearing in Appendix B show the credit scores, if
any, that the originators or underwriters of the mortgage loans collected for   
some mortgagors. Third-party credit reporting organizations provide credit      
scores as an aid to lenders in evaluating the creditworthiness of borrowers.    
Although different credit reporting organizations use different methodologies,  
higher credit scores indicate greater creditworthiness. Credit scores do not    
necessarily correspond to the probability of default over the life of the       
related mortgage loan because they reflect past credit history, rather than an  
assessment of future payment performance. In addition, the credit scores shown  
were collected from a variety of sources over a period of weeks, months or      
longer, and the credit scores do not necessarily reflect the credit scores that 
would be reported as of the date of this prospectus supplement. Credit scores   
also only indicate                                                              

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general consumer creditworthiness, and credit scores are not intended to        
specifically apply to mortgage debt. Therefore, credit scores should not be     
considered as an accurate predictor of the likelihood of repayment of the       
related mortgage loans.                                                         

 The pooling agreement will be available to purchasers of the certificates
through a Current Report on Form 8-K that will be filed with the Securities and 
Exchange Commission within fifteen days after the initial issuance of the       
certificates. In the event that mortgage loans are removed from or added to the 
mortgage pool as described in the footnote on page S-16, that removal or        
addition will be noted in the Current Report on Form 8-K.                       

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DESCRIPTION OF THE CERTIFICATES 

GENERAL                                                                         

The certificates will be issued pursuant to the pooling agreement to be 
dated as of the Cut-Off Date between Washington Mutual Mortgage Securities      
Corp., as depositor and master servicer, and Bankers Trust Company of           
California, N.A., as trustee. A form of the pooling agreement is filed as an    
exhibit to the registration statement of which this prospectus supplement is a  
part. The prospectus contains important additional information regarding the    
terms and conditions of the pooling agreement and the certificates. The offered 
certificates will not be issued unless they receive the ratings from Standard & 
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ('S&P')  
and Moody's Investors Service, Inc. ('MOODY'S') indicated under 'Certificate    
Ratings' in this prospectus supplement. As of November 14, 2001 (the 'CLOSING   
DATE'), the offered certificates, other than the Class B-2 and Class B-3        
Certificates, will qualify as 'mortgage related securities' within the meaning  
of the Secondary Mortgage Market Enhancement Act of 1984.                       

 The pooling agreement obligates the master servicer to make advances when
payments on the mortgage loans are delinquent and other conditions are met, as  
described in this prospectus supplement under ' -- Advances.'                   

    The WaMu Mortgage Pass-Through Certificates, Series 2001-AR4 will consist of
the following classes:                                                          

                                                                [Download Table]
                                                                        
Class A-1                            Class B-1                 Class B-5
Class A-2                            Class B-2                 Class B-6
Class A-3                            Class B-3                 Class R  
Class A-4                            Class B-4                          

   Collectively, the certificates will represent the ownership of the property
in the Trust, legal title to which will be held by the trustee. The certificates
will have the following designations:                                           

                                                        [Enlarge/Download Table]
                                                                                          
Class A Certificates......................... Class A-1, Class A-2, Class A-3 and         
                                              Class A-4 Certificates.                     

Residual Certificates........................ Class R Certificates.                       

Regular Certificates......................... All classes of certificates other than the  
                                              Class R Certificates.                       

Senior Certificates.......................... Class A and Class R Certificates.           

Senior Subordinate Certificates.............. Class B-1, Class B-2 and Class B-3          
                                              Certificates.                               

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

Class B or Subordinate Certificates.......... Senior Subordinate and Junior Subordinate   
                                              Certificates.                               

Physical Certificates........................ Junior Subordinate and Class R Certificates.

Book-Entry Certificates...................... All classes of certificates other than the  
                                              Physical Certificates.                      

   Only the Senior and the Senior Subordinate Certificates, called the offered
certificates, are offered by this prospectus supplement. The Junior Subordinate 
Certificates are not offered hereby.                                            

   The 'CLASS PRINCIPAL BALANCE' for any Distribution Date (as defined in this
prospectus supplement) and for any class of certificates will equal the         
aggregate amount of principal to which it is entitled on the Closing Date,      
reduced by all distributions of principal to that class and all allocations of  
losses required to be borne by that class before that Distribution Date.        

   The 'CERTIFICATE PRINCIPAL BALANCE' for any certificate will be the portion
of the corresponding Class Principal Balance that it represents.                

The Senior Certificates will comprise approximately 96.75%, the Senior  
Subordinate Certificates will comprise approximately 2.65%, and the Junior      
Subordinate Certificates will comprise approximately 0.60%, of the aggregate    
principal balance of the mortgage loans as of the Cut-Off Date.                 

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  The certificates, other than the Class R Certificates, are each offered in
minimum denominations equivalent to not less than $25,000 each and multiples of 
$1 in excess of that amount. The Class R Certificates will have an initial Class
Principal Balance of $100 and will be offered in registered, certificated form  
in a single denomination of a 99.99% percentage interest. The remaining 0.01%   
percentage interest of the Class R Certificates will be retained by Washington  
Mutual Mortgage Securities Corp. as described in this prospectus supplement     
under 'Certain Federal Income Tax Consequences.'                                

BOOK-ENTRY REGISTRATION                                                         

Each class of Book-Entry Certificates will initially be represented by a
single certificate registered in the name of Cede & Co. ('CEDE'), as the nominee
of The Depository Trust Company ('DTC'). Cede will be the record holder of the  
Book-Entry Certificates, but references to 'Book-Entry Certificateholders'      
should be understood to be references to the persons on whose account DTC will  
be causing Cede to hold the Book-Entry Certificates. No Book-Entry              
Certificateholder will be entitled to receive a registered certificate. Unless  
registered certificates are issued under the limited circumstances described in 
this prospectus supplement, all references to actions by Book-Entry             
Certificateholders refer to actions taken by DTC participants as described      
below, and all references in this prospectus supplement to distributions,       
notices, reports, and statements to Book-Entry Certificateholders refer to      
distributions, notices, reports, and statements to Cede, as the registered      
holder of those certificates, for distribution to Book-Entry Certificateholders 
in accordance with DTC procedures.                                              

 Certificateholders may hold their Book-Entry Certificates through DTC, if
they are DTC participants, or indirectly through organizations that are DTC     
participants. Transfers between DTC participants will occur in accordance with  
DTC rules. Cede, as nominee of DTC, will be the named certificateholder of the  
registered certificates for the Book-Entry Certificates.                        

DTC has advised Washington Mutual Mortgage Securities Corp. that it is a
limited-purpose trust company organized under the New York Banking Law, a       
'banking organization' within the meaning of the New York Banking Law, a member 
of the Federal Reserve System, a 'clearing corporation' within the meaning of   
the New York Uniform Commercial Code and a 'clearing agency' registered pursuant
to the provisions of Section 17A of the Securities Exchange Act of 1934, as     
amended.                                                                        

DTC holds securities that its participants deposit with DTC. DTC also   
facilitates the settlement among DTC participants of securities transactions,   
such as transfers and pledges, in deposited securities through electronic       
computerized book-entry changes in DTC participants' accounts, thereby          
eliminating the need for physical movement of securities certificates. DTC      
participants include the underwriters, securities brokers and dealers, banks,   
trust companies, clearing corporations and certain other organizations. Indirect
access to the DTC system is also available to other entities, referred to as    
indirect DTC participants, such as banks, brokers, dealers, and trust companies 
that clear through or maintain a custodial relationship with a DTC participant, 
either directly or indirectly.                                                  

Certificateholders that are not DTC participants or indirect DTC        
participants but desire to purchase, sell, or otherwise transfer ownership of or
other interests in Book-Entry Certificates may do so only through DTC           
participants and indirect DTC participants. In addition, unless registered      
certificates are issued, certificateholders will receive all distributions of   
principal and interest on the Book-Entry Certificates through DTC participants. 
Under a book-entry format, certificateholders will receive payments after the   
related Distribution Date because, although payments are required to be         
forwarded to Cede, as nominee for DTC, on each Distribution Date, DTC will      
forward payments to DTC participants, which will then be required to forward    
them to indirect DTC participants or certificateholders.                        

    It is anticipated that the sole 'Certificateholder' (as that term is used in
the pooling agreement) for each class of Book-Entry Certificates will be Cede,  
as nominee of DTC, and that Book-Entry Certificateholders will not be recognized
by the trustee as certificateholders under the pooling agreement. Book-Entry    
Certificateholders will be permitted to exercise the rights of                  
certificateholders under the pooling agreement only indirectly through DTC      
participants, who in turn will exercise their rights through DTC.               

  Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers among DTC          
participants on whose behalf it acts with respect to the                        

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Book-Entry Certificates and is required to receive and transmit payments of     
principal and interest, if any, on the Book-Entry Certificates. DTC participants
and indirect DTC participants with whom Book-Entry Certificateholders have      
accounts with respect to the Book-Entry Certificates similarly are required to  
make book-entry transfers and receive and transmit payments on behalf of their  
respective Book-Entry Certificateholders. Accordingly, although owners of       
Book-Entry Certificates will not possess registered certificates, the DTC rules 
provide a mechanism by which owners of the Book-Entry Certificates through their
DTC participants will receive payments and will be able to transfer their       
interest.                                                                       

    DTC can only act on behalf of DTC participants, who in turn act on behalf of
indirect DTC participants and certain banks. Therefore, the ability of a        
Book-Entry Certificateholder to pledge Book-Entry Certificates to persons or    
entities that do not participate in the DTC system, or to take other actions in 
respect of Book-Entry Certificates, may be limited due to the lack of a physical
certificate for Book-Entry Certificates.                                        

Neither DTC, Cede nor any other DTC nominee will consent or vote with   
respect to the Book-Entry Certificates. Rather, DTC will assign Cede's          
consenting or voting rights to those DTC participants to whose accounts the     
Book-Entry Certificates are credited at the relevant time.                      

Although DTC has agreed to the procedures described above in order to   
facilitate transfers of Book-Entry Certificates among DTC participants, it is   
under no obligation to perform or continue to perform those procedures, which   
may be discontinued at any time.                                                

DEFINITIVE CERTIFICATES                                                         

    The Book-Entry Certificates will be issued in fully registered, certificated
form to certificateholders or their nominees, rather than to DTC or its nominee,
only if:                                                                        

    Washington Mutual Mortgage Securities Corp. advises the trustee in
         writing that DTC is no longer willing or able to discharge properly its
responsibilities as depository with respect to the Book-Entry 
       Certificates and the trustee or Washington Mutual Mortgage Securities
Corp. is unable to locate a qualified successor;              

       Washington Mutual Mortgage Securities Corp., at its option, elects to
terminate the book-entry system through DTC; or               

after the occurrence of an event of default under the pooling 
         agreement, certificateholders of Book-Entry Certificates evidencing not
less than 66 and 2/3% of the aggregate outstanding Certificate
       Principal Balance advise the trustee and DTC through DTC participants
         in writing that the continuation of a book-entry system through DTC (or
its successor) is no longer in the best interest of the       
certificateholders.                                           

If any of the above events occur, DTC is required to notify all DTC     
participants of the availability of registered certificates. When DTC surrenders
its physical certificates and provides instructions for re-registration, the    
trustee will issue registered certificates to replace the Book-Entry            
Certificates. After that happens, the trustee will recognize the holders of     
those registered certificates as certificateholders under the pooling agreement.

The trustee or its paying agent, if any, will make distributions of     
principal and interest on the registered certificates directly to holders of    
those registered certificates in accordance with the pooling agreement          
procedures described in this prospectus supplement. Distributions of principal  
and interest on each Distribution Date will be made to holders in whose names   
certificates were registered at the close of business on the related record     
date. Distributions will be made by wire transfer in immediately available funds
for the account of each holder or, if a holder has not provided wire            
instructions, by check mailed to the address of the holder as it appears on the 
register maintained by the certificate registrar. The final payment on any      
certificate will be made only on presentation and surrender of the certificate  
at the offices of the trustee or its agent or such office or agency as is       
specified in the notice of final distribution to holders of certificates being  
retired. The trustee will provide notice to registered certificateholders not   
later than the fifteenth day of the month in which all remaining outstanding    
certificates will be retired.                                                   

   Registered certificates will be transferable and exchangeable at the office
or agency of the trustee in New York City. A reasonable service charge may be   
imposed for any registration of transfer or exchange,                           

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and the trustee or its agent may require payment of a sum sufficient to cover   
any tax or other governmental charge imposed in connection with registration of 
transfer or exchange.                                                           

PRIORITY OF DISTRIBUTIONS                                                       

 Beginning in December 2001, on the 25th day of each month, or if the 25th
day is not a business day, on the immediately following business day (each, a   
'DISTRIBUTION DATE'), before the Credit Support Depletion Date (as defined in   
this prospectus supplement), to the extent of the Available Distribution Amount 
(as defined in this prospectus supplement) for that Distribution Date,          
distributions will be made to the certificateholders and to the servicer in the 
order and priority as follows:                                                  

    (i)    first, to the Class A and Class R Certificates, pro rata, accrued and
       unpaid interest at their respective certificate interest rates on
their respective Class Principal Balances;                

   (ii)   second, to the servicer, the variable servicing fee (as described in
' -- Servicing Compensation and Payment of Expenses');    

(iii)  third, to the Class A and Class R Certificates, as principal, the
    Senior Principal Distribution Amount in the order described in
      ' -- Distributions of Principal -- Senior Principal Distribution
Amount' in this prospectus supplement;                    

    (iv)   fourth, to the Class B-1 Certificates, accrued and unpaid interest at
       the Weighted Average Pass-Through Rate on the Class B-1 Principal
Balance;                                                  

(v)    fifth, to the Class B-1 Certificates, their pro rata share of the
   Subordinate Principal Distribution Amount (as defined in this
prospectus supplement);                                   

   (vi)   sixth, to the Class B-2 Certificates, accrued and unpaid interest at
       the Weighted Average Pass-Through Rate on the Class B-2 Principal
Balance;                                                  

  (vii)  seventh, to the Class B-2 Certificates, their pro rata share of the
Subordinate Principal Distribution Amount;                

    (viii) eighth, to the Class B-3 Certificates, accrued and unpaid interest at
       the Weighted Average Pass-Through Rate on the Class B-3 Principal
Balance;                                                  

(ix)   ninth, to the Class B-3 Certificates, their pro rata share of the
Subordinate Principal Distribution Amount;                

    (x)    tenth, to the Junior Subordinate Certificates, interest and principal
          in the same manner as for the Senior Subordinate Certificates, first
           to the Class B-4 Certificates, then to the Class B-5 Certificates and
then to the Class B-6 Certificates;                       

    (xi)   eleventh, to each class of the certificates in order of seniority, up
        to the amount of unreimbursed realized principal losses previously
          allocated to that class, if any; provided, however, that any amounts
          distributed pursuant to this paragraph (xi) will not cause a further
           reduction in the Class Principal Balances of any of the certificates;
and                                                       

(xii)  twelfth, to the Class R Certificates.                            

Notwithstanding the above, on any Distribution Date on which the        
Subordination Level (as defined below) for any class of Subordinate Certificates
is less than the Subordination Level as of the Closing Date, a different        
distribution will be made. The amount of the Subordinate Principal Prepayments  
Distribution Amount (as defined in this prospectus supplement) otherwise        
allocable to the class or classes of the Subordinate Certificates junior to that
class will be allocated to the most senior class of Subordinate Certificates for
which the Subordination Level is less than the Subordination Level as of the    
Closing Date and to the more senior class or classes of the Subordinate         
Certificates, pro rata according to the Class Principal Balances of those       
classes.                                                                        

 With respect to any class of Subordinate Certificates, the 'SUBORDINATION
LEVEL' on any specified date is the percentage obtained by dividing the sum of  
the Class Principal Balances of all classes of Subordinate Certificates that are
subordinate in right of payment to that class by the sum of the Class Principal 
Balances of all classes of certificates as of that date before giving effect to 
distributions and allocations of realized losses to the certificates on that    
date.                                                                           

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   The 'CREDIT SUPPORT DEPLETION DATE' is the first Distribution Date on which
the aggregate Class Principal Balance of the Class B Certificates has been or   
will be reduced to zero.                                                        

On each Distribution Date on or after the Credit Support Depletion Date,
distributions of the Available Distribution Amount will be made with respect to 
the servicer and the certificates as follows:                                   

(i)   first, to the Class A Certificates, pro rata, accrued and unpaid  
    interest at their respective certificate interest rates on their
respective Class Principal Balances;                        

(ii)  second, to the servicer, the variable servicing fee;              

    (iii) third, to the Class A Certificates, pro rata, as principal, the Senior
Principal Distribution Amount; and                          

(iv)  fourth, to the Class R Certificates.                              

DISTRIBUTIONS OF INTEREST                                                       

  For each class of certificates, interest will be passed through monthly on
each Distribution Date, beginning in December 2001. For each Distribution Date, 
an amount of interest will accrue on each class of certificates, generally equal
to 1/12th of the applicable annual certificate interest rate for that class     
multiplied by the related Class Principal Balance, less any prepayment interest 
shortfalls (as described below in ' -- Compensating Interest') and less any     
interest shortfalls relating to the Relief Act allocated to the certificates.   

    Interest to be distributed on the certificates on any Distribution Date will
consist of accrued and unpaid interest as of previous Distribution Dates and    
interest accrued during the preceding calendar month, except for the Class A-1  
Certificates which accrue interest during the period beginning on the           
Distribution Date of the preceding calendar month (or in the case of the first  
Distribution Date, the Closing Date) and ending on the day preceding that       
Distribution Date. Interest to be distributed on the certificates will be       
calculated based on a year consisting of twelve thirty-day months. All          
distributions of interest for each class of certificates will generally be made 
only to the extent of the Available Distribution Amount as described under      
' -- Priority of Distributions' in this prospectus supplement.                  

The annual certificate interest rates for the offered certificates are  
listed in the table on page S-4 of this prospectus supplement and in the notes  
to that table.                                                                  

The 'PASS-THROUGH RATE' for each mortgage loan is equal to the per annum
mortgage interest rate on that mortgage loan less the sum of the master         
servicing fee and fixed servicing fee (each, as described in this prospectus    
supplement under ' -- Servicing Compensation and Payment of Expenses').         

Compensating Interest                                                   

Washington Mutual Mortgage Securities Corp., as master servicer, is     
obligated to remit to the Certificate Account on the business day before each   
Distribution Date an amount equal to the lesser of (a) any shortfall for the    
previous month in interest collections resulting from the timing of Payoffs (as 
defined in this prospectus supplement) made from the 15th day of the calendar   
month preceding the Distribution Date to the last day of the month and (b) the  
applicable monthly master servicing fee payable to Washington Mutual Mortgage   
Securities Corp., any reinvestment income realized by Washington Mutual Mortgage
Securities Corp., as master servicer, relating to Payoffs made during the       
Prepayment Period (as defined in this prospectus supplement) and interest       
payments on Payoffs received during the period of the first day through the 14th
day of the month of the Distribution Date. Compensating Interest will be added  
to the Available Distribution Amount.                                           

   Any remaining shortfall in interest collections resulting from Curtailments
(as defined in this prospectus supplement), the timing of Payoffs and the Relief
Act will be allocated pro rata to the amount of the variable servicing fee and  
to the certificates according to the amount of the variable servicing fee and   
the amount of interest to which each class of certificates would otherwise be   
entitled, in each case, in reduction of those amounts.                          

   See 'Yield and Prepayment Considerations' in this prospectus supplement and
'Yield Considerations -- Effective Interest Rate' in the prospectus.            

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DISTRIBUTIONS OF PRINCIPAL                                                      

GENERAL                                                                         

 On each Distribution Date, certificateholders will be entitled to receive
principal distributions from the Available Distribution Amount to the extent and
in the priority described in this prospectus supplement. See ' -- Priority of   
Distributions' in this prospectus supplement.                                   

   For any Distribution Date, the 'PRINCIPAL PAYMENT AMOUNT' is the sum of (i)
scheduled principal payments on the mortgage loans due on the Due Date          
immediately before the Distribution Date, (ii) the principal portion of         
repurchase proceeds received with respect to any mortgage loan that was         
repurchased as permitted or required by the pooling agreement during the        
calendar month preceding the month of the Distribution Date and (iii) any other 
unscheduled payments of principal that were received on the mortgage loans      
during the preceding calendar month, other than Payoffs, Curtailments or        
Liquidation Principal (each, as defined below).                                 

   'PAYOFFS' are prepayments in full on a mortgage loan and 'CURTAILMENTS' are
partial prepayments on a mortgage loan. For any Distribution Date, the          
'PRINCIPAL PREPAYMENT AMOUNT' is the sum of all Payoffs and Curtailments that   
were received during the related Prepayment Period.                             

   For each Distribution Date and each Payoff, the related 'PREPAYMENT PERIOD'
will start on the 15th day of the month preceding the month in which the related
Distribution Date occurs (or, in the case of the first Distribution Date,       
beginning on the Cut-Off Date) and will end on the 14th day of the month in     
which the Distribution Date occurs. For each Distribution Date and each         
Curtailment, the related 'PREPAYMENT PERIOD' will be the month preceding the    
month in which the related Distribution Date occurs.                            

    'LIQUIDATION PRINCIPAL' is the principal portion of Liquidation Proceeds (as
defined in the pooling agreement) received with respect to each mortgage loan   
that became a Liquidated Mortgage Loan (as defined below) (but not in excess of 
the principal balance of that mortgage loan) during the calendar month preceding
the month of the Distribution Date. A 'LIQUIDATED MORTGAGE LOAN' is a mortgage  
loan for which the master servicer or a servicer has determined that it has     
received all amounts that it expects to recover from or on account of the       
mortgage loan, whether from Insurance Proceeds (as defined in the pooling       
agreement), Liquidation Proceeds or otherwise.                                  

The 'STATED PRINCIPAL BALANCE' of any mortgage loan as of any date of   
determination is equal to its principal balance as of the Cut-Off Date, after   
application of all scheduled principal payments due on or before the Cut-Off    
Date, whether or not received, reduced by all amounts allocable to principal    
that have been distributed to certificateholders with respect to that mortgage  
loan on or before that date of determination, and as further reduced to the     
extent that any realized loss on that mortgage loan has been allocated to one or
more classes of certificates on or before that date of determination.           

SENIOR PRINCIPAL DISTRIBUTION AMOUNT                                            

On each Distribution Date before the Credit Support Depletion Date, an  
amount, up to the amount of the Senior Principal Distribution Amount (as defined
below) for that Distribution Date, will be distributed as principal,            
sequentially, as follows:                                                       

     (i)   first, to the Class R Certificates, until the Class R Principal
Balance has been reduced to zero;                                       

(ii)  second, to the Class A-1 Certificates, until the Class A-1
Principal Balance has been reduced to zero;                             

(iii) third, to the Class A-2 Certificates, until the Class A-2 
Principal Balance has been reduced to zero;                             

(iv)  fourth, to the Class A-3 Certificates, until the Class A-3
Principal Balance has been reduced to zero; and                         

(v)   fifth, to the Class A-4 Certificates, until the Class A-4 
Principal Balance has been reduced to zero.                             

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 The 'SENIOR PRINCIPAL DISTRIBUTION AMOUNT' for any Distribution Date will
equal the sum of (i) the Adjusted Senior Percentage (as defined below) of the   
Principal Payment Amount, (ii) the Senior Prepayment Percentage (as defined     
under ' -- Principal Prepayments' in this prospectus supplement) of the         
Principal Prepayment Amount and (iii) the Senior Liquidation Amount (as defined 
below).                                                                         

  The 'SENIOR PERCENTAGE' for any Distribution Date will equal the aggregate
Class Principal Balance of the Class A and Class R Certificates divided by the  
aggregate Class Principal Balance of the Class A, Class B and Class R           
Certificates, in each case immediately before that Distribution Date. The       
'SUBORDINATE PERCENTAGE' for any Distribution Date will equal the excess of 100%
over the Senior Percentage for that date. The Senior Percentage and the         
Subordinate Percentage as of the Closing Date will be approximately 96.75% and  
3.25%, respectively.                                                            

The 'ADJUSTED SENIOR PERCENTAGE' for any Distribution Date before the   
Distribution Date in December 2008 will equal 100%, unless (A) delinquencies and
losses on the mortgage loans do not exceed certain limits specified in the      
pooling agreement and (B) the Subordinate Percentage is greater than or equal to
twice that percentage as of the Closing Date, in which case (i) for any         
Distribution Date on or before the Distribution Date in October 2004, the       
Adjusted Senior Percentage will equal the Senior Percentage plus 50% of the     
Subordinate Percentage or (ii) for any Distribution Date after the Distribution 
Date in October 2004, the Adjusted Senior Percentage will equal the Senior      
Percentage. The Adjusted Senior Percentage for any Distribution Date in and     
after December 2008 will equal the Senior Percentage. Notwithstanding the above,
if the aggregate Class Principal Balance of the Senior Certificates will be     
reduced to zero on that Distribution Date, the Adjusted Senior Percentage will  
be limited to the percentage necessary to reduce that balance to zero. The      
'ADJUSTED SUBORDINATE PERCENTAGE' for any Distribution Date will equal the      
excess of 100% over the Adjusted Senior Percentage for that date.               

The 'SENIOR LIQUIDATION AMOUNT' for any Distribution Date will equal the
aggregate, for each mortgage loan that became a Liquidated Mortgage Loan during 
the calendar month preceding the month of that Distribution Date, of the lesser 
of (i) the Adjusted Senior Percentage of the Stated Principal Balance of that   
mortgage loan and (ii) the Senior Prepayment Percentage of the Liquidation      
Principal with respect to that mortgage loan.                                   

SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT                                       

 On each Distribution Date, an amount, up to the amount of the Subordinate
Principal Distribution Amount for that Distribution Date (which will generally  
equal zero until the Distribution Date in December 2008 unless prepayments on   
the mortgage loans exceed certain levels and the delinquencies and losses on the
mortgage loans do not exceed certain limits), will be distributed as principal  
to the Subordinate Certificates. On each Distribution Date, except Distribution 
Dates on which the Subordination Level for any class of the Subordinate         
Certificates is less than the related Subordination Level as of the Closing     
Date, each class of the Subordinate Certificates will be entitled to receive its
pro rata (by Class Principal Balance) share of the Subordinate Principal        
Distribution Amount, to the extent of the Available Distribution Amount         
remaining after distributions of interest and principal to the Senior           
Certificates, payment of the variable servicing fee, distributions of interest  
and principal to all of the Subordinate Certificates senior to that class and   
distributions of interest to that class. See ' -- Priority of Distributions' in 
this prospectus supplement. The relative seniority, from highest to lowest, of  
the Subordinate Certificates is as follows: Class B-1, Class B-2, Class B-3,    
Class B-4, Class B-5 and Class B-6.                                             

 The 'SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT' for any Distribution Date
will equal the sum of (i) the Adjusted Subordinate Percentage of the Principal  
Payment Amount; (ii) the Subordinate Principal Prepayments Distribution Amount  
(as defined below); and (iii) the Subordinate Liquidation Amount (as defined    
below).                                                                         

The 'SUBORDINATE PRINCIPAL PREPAYMENTS DISTRIBUTION AMOUNT' for any     
Distribution Date will equal the Subordinate Prepayment Percentage of the       
Principal Prepayment Amount.                                                    

    The 'SUBORDINATE PREPAYMENT PERCENTAGE' for any Distribution Date will equal
the excess of 100% over the Senior Prepayment Percentage; provided, however,    
that if the aggregate Class Principal Balance of the Class A and Class R        
Certificates has been reduced to zero, then the Subordinate Prepayment          
Percentage will equal 100%.                                                     

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 The 'SUBORDINATE LIQUIDATION AMOUNT' for any Distribution Date will equal
the excess, if any, of the aggregate Liquidation Principal for all mortgage     
loans that became Liquidated Mortgage Loans during the calendar month preceding 
the month of that Distribution Date, over the Senior Liquidation Amount for that
Distribution Date.                                                              

The rights of the holders of the Class B Certificates to receive        
distributions of interest and principal are subordinated to the rights of the   
holders of the Senior Certificates to receive all distributions of interest and 
principal to which they are entitled and to the payment of the variable         
servicing fee. See ' -- Subordination and Allocation of Losses' in this         
prospectus supplement.                                                          

PRINCIPAL PREPAYMENTS                                                           

    The 'SENIOR PREPAYMENT PERCENTAGE' for any Distribution Date before December
2008 will equal 100%. During the next four years, this percentage will be       
calculated as follows:                                                          

     for any Distribution Date occurring in or between December 2008 and
      November 2009, the Senior Percentage for that Distribution Date plus
70% of the Subordinate Percentage for that Distribution Date; 

     for any Distribution Date occurring in or between December 2009 and
      November 2010, the Senior Percentage for that Distribution Date plus
60% of the Subordinate Percentage for that Distribution Date; 

     for any Distribution Date occurring in or between December 2010 and
      November 2011, the Senior Percentage for that Distribution Date plus
   40% of the Subordinate Percentage for that Distribution Date; and

     for any Distribution Date occurring in or between December 2011 and
      November 2012, the Senior Percentage for that Distribution Date plus
20% of the Subordinate Percentage for that Distribution Date. 

For any Distribution Date occurring in or after December 2012, the Senior       
Prepayment Percentage will equal the Senior Percentage for that Distribution    
Date.                                                                           

   There are important exceptions to the calculations of the Senior Prepayment
Percentage described in the above paragraph. On any Distribution Date, (i) if   
the Senior Percentage for that Distribution Date exceeds the initial Senior     
Percentage as of the Closing Date, then the Senior Prepayment Percentage for    
that Distribution Date will equal 100%, (ii) if on or before the Distribution   
Date in November 2004, the Subordinate Percentage for such Distribution Date is 
greater than or equal to twice that percentage as of the Closing Date, then the 
Senior Prepayment Percentage for such Distribution Date will equal the Senior   
Percentage plus 50% of the Subordinate Percentage for that Distribution Date,   
and (iii) if after the Distribution Date in November 2004, the Subordinate      
Percentage for such Distribution Date is greater than or equal to twice that    
percentage as of the Closing Date, then the Senior Prepayment Percentage for    
such Distribution Date will equal the Senior Percentage.                        

    Notwithstanding the above, on any Distribution Date, if the delinquencies or
losses on the mortgage loans exceed certain limits specified in the pooling     
agreement, then the Senior Prepayment Percentage for that Distribution Date will
not decrease as described in the definition of Senior Prepayment Percentage     
above. Finally, if on any Distribution Date the allocation to the Senior        
Certificates in the percentage required would reduce the sum of the Class       
Principal Balances of those certificates below zero, the Senior Prepayment      
Percentage for that Distribution Date will be limited to the percentage         
necessary to reduce that sum to zero.                                           

SUBORDINATION AND ALLOCATION OF LOSSES                                          

The Subordinate Certificates will be subordinate in right of payment and
provide credit support to the Senior Certificates to the extent described in    
this prospectus supplement. The support provided by the Subordinate Certificates
is intended to enhance the likelihood of regular receipt by the Senior          
Certificates of the full amount of the monthly distributions of interest and    
principal to which they are entitled and to afford the Senior Certificates      
protection against certain losses. The protection afforded to the Senior        
Certificates by the Subordinate Certificates will be accomplished by the        
preferential right on each                                                      

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Distribution Date of the Senior Certificates to receive distributions of        
interest and principal to which they are entitled before distributions of       
interest and principal to the Subordinate Certificates and by the allocation of 
most losses to the Subordinate Certificates prior to any allocation of losses to
the Senior Certificates.                                                        

  In addition, each class of Subordinate Certificates will be subordinate in
right of payment and provide credit support to each class of Subordinate        
Certificates with a lower numerical class designation. The protection afforded a
class of Subordinate Certificates by the classes of Subordinate Certificates    
with higher numerical class designations will be similarly accomplished by the  
preferential right of those classes with lower numerical class designations to  
receive distributions of interest and principal before distributions of interest
and principal to those classes of Subordinate Certificates with higher numerical
class designations.                                                             

Any loss realized on a mortgage loan, except for Special Hazard Losses, 
Fraud Losses and Bankruptcy Losses in excess of the designated amounts of the   
Special Hazard Coverage, Fraud Coverage and Bankruptcy Coverage (each, as       
defined in this prospectus supplement), will be allocated among the certificates
as follows:                                                                     

(i) for losses allocable to principal:                          

  (a) first, to the Junior Subordinate Certificates in reverse
     numerical order, until their aggregate Class Principal Balance has been
reduced to zero;                                                  

    (b) second, to the Class B-3 Certificates, until the Class B-3
Principal Balance has been reduced to zero;                       

   (c) third, to the Class B-2 Certificates, until the Class B-2
Principal Balance has been reduced to zero;                       

    (d) fourth, to the Class B-1 Certificates, until the Class B-1
Principal Balance has been reduced to zero; and                   

         (e) fifth, to the Class A Certificates, pro rata, according to, and
in reduction of, their Class Principal Balances;                  

and                                                                             

(ii) for losses allocable to interest:                          

  (a) first, to the Junior Subordinate Certificates in reverse
      numerical order, in reduction of accrued but unpaid interest and then in
reduction of the Class Principal Balances of those certificates;  

        (b) second, to the Class B-3 Certificates, in reduction of accrued
  but unpaid interest and then in reduction of the Class B-3 Principal
Balance;                                                          

           (c) third, to the Class B-2 Certificates, in reduction of accrued but
       unpaid interest and then in reduction of the Class B-2 Principal Balance;

        (d) fourth, to the Class B-1 Certificates, in reduction of accrued
  but unpaid interest and then in reduction of the Class B-1 Principal
Balance; and                                                      

           (e) fifth, to the Class A Certificates, pro rata according to, and in
      reduction of, accrued but unpaid interest on those classes, and then pro
      rata, according to, and in reduction of, their Class Principal Balances.

  On each Distribution Date, if the aggregate Class Principal Balance of all
outstanding classes of certificates exceeds the aggregate Stated Principal      
Balance of the mortgage loans (after giving effect to distributions of principal
and the allocation of all losses to the certificates on that Distribution Date),
that excess will be deemed a principal loss and will be allocated to the most   
junior class of Subordinate Certificates then outstanding.                      

 Pro Rata Allocation is used to allocate excess Special Hazard, Bankruptcy
and Fraud Losses. 'PRO RATA ALLOCATION' is the allocation of the principal      
portion of losses to all classes of certificates pro rata according to, and in  
reduction of, their respective Class Principal Balances, and the allocation of  
the interest portion of losses pro rata according to, and in reduction of, the  
amount of interest accrued but                                                  

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unpaid on each class of certificates, and then pro rata to those classes of     
certificates according to, and in reduction of, their Class Principal Balances. 

Special Hazard Losses in excess of the Special Hazard Coverage will be  
allocated to the outstanding certificates by Pro Rata Allocation. As of the     
Cut-Off Date, the 'SPECIAL HAZARD COVERAGE' is expected to equal approximately  
$13,967,153. On each anniversary of the Cut-Off Date, the Special Hazard        
Coverage will be reduced, but not increased, to an amount equal to the lesser   
of:                                                                             

       (i) the greatest of (a) the aggregate principal balance of the mortgage
   loans located in the single California zip code area containing the largest
  aggregate principal balance of the mortgage loans, (b) 1% of the aggregate
unpaid principal balance of the mortgage loans and (c) twice the unpaid 
principal balance of the largest single mortgage loan, in each case     
calculated as of the Due Date in the immediately preceding month; and   

     (ii) the Special Hazard Coverage as of the Cut-Off Date as reduced by
 the Special Hazard Losses allocated to the certificates since the Cut-Off
Date.                                                                   

Fraud Losses in excess of the Fraud Coverage will be allocated to the   
outstanding certificates by Pro Rata Allocation. As of the Cut-Off Date, the    
'FRAUD COVERAGE' will equal 2.00% of the aggregate principal balance of the     
mortgage loans. The Fraud Coverage will be reduced, from time to time, by the   
amount of Fraud Losses allocated to the certificates. On each anniversary of the
Cut-Off Date, the Fraud Coverage will be reduced to the lesser of (i) on the    
first, second, third and fourth anniversaries of the Cut-Off Date, 1.00% of the 
aggregate principal balance of the mortgage loans as of the Due Date in the     
preceding month and (ii) the excess of the Fraud Coverage as of the Cut-Off Date
over cumulative Fraud Losses allocated to the certificates since the Cut-Off    
Date. On the fifth anniversary of the Cut-Off Date, the Fraud Coverage will be  
reduced to zero.                                                                

   Bankruptcy Losses in excess of the Bankruptcy Coverage will be allocated to
the outstanding certificates by Pro Rata Allocation. As of the Cut-Off Date, the
'BANKRUPTCY COVERAGE' is expected to equal approximately $108,253. The          
Bankruptcy Coverage will be reduced, from time to time, by the amount of        
Bankruptcy Losses allocated to the certificates.                                

   The Special Hazard Coverage, Fraud Coverage or Bankruptcy Coverage may also
be reduced upon written confirmation from the rating agencies that the reduction
will not adversely affect the then current ratings assigned to the offered      
certificates by the rating agencies. Such a reduction, in the event of Special  
Hazard Losses, Fraud Losses or Bankruptcy Losses, could adversely affect the    
level of protection afforded the Senior Certificates by subordination of the    
Subordinate Certificates or the level of protection afforded the Senior         
Subordinate Certificates by subordination of the Junior Subordinate             
Certificates.                                                                   

THE CLASS R CERTIFICATES                                                        

The Class R Certificates will receive $100 principal on the first       
Distribution Date, as well as one month's interest on that amount. These        
certificates will not receive any distributions of interest or principal on any 
other Distribution Date. However, on each Distribution Date, the Class R        
Certificates will receive any amounts remaining (which are expected to be zero) 
in the Certificate Account from the Available Distribution Amount after         
distributions of interest and principal on the regular interests issued by      
REMIC II (as defined in the pooling agreement) and payment of expenses, if any, 
of the Trust, together with excess liquidation proceeds (as described in        
paragraph (1)(g) of ' -- Available Distribution Amount' below), if any.         
Distributions of any remaining amounts to the Class R Certificates will be      
subordinate to all payments required to be made with respect to the other       
certificates and each class of REMIC I Regular Interests (each, as defined in   
the pooling agreement) on any Distribution Date.                                

ADVANCES                                                                        

For each mortgage loan, the master servicer will make advances to the   
Certificate Account on each Distribution Date to cover any shortfall between (i)
payments scheduled to be received for that mortgage loan and (ii) the amounts   
actually deposited in the Certificate Account on account of those payments.     
However, if the master servicer determines, in good faith, that an advance would
not be recoverable from insurance proceeds, liquidation proceeds or other       
amounts received for the mortgage loan, it will not make                        

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an advance. Advances are reimbursable to the master servicer from cash in the   
Certificate Account before payments to the certificateholders if the master     
servicer determines that advances previously made are not recoverable from      
insurance proceeds, liquidation proceeds or other amounts recoverable for the   
applicable mortgage loan.                                                       

AVAILABLE DISTRIBUTION AMOUNT                                                   

On each Distribution Date, the Available Distribution Amount for that   
Distribution Date, which will generally include scheduled principal and interest
payments due on the Due Date immediately before that Distribution Date,         
Curtailments received in the previous calendar month (as described below),      
Payoffs received in the Prepayment Period to the extent described below and     
amounts received from liquidations of mortgage loans in the previous calendar   
month, will be distributed to the certificateholders, as specified in this      
prospectus supplement.                                                          

    The 'AVAILABLE DISTRIBUTION AMOUNT' for any Distribution Date, as more fully
described in the pooling agreement, will equal the sum, for the mortgage loans, 
of the following amounts:                                                       

       (1) the total amount of all cash received by or on behalf of the master
   servicer for the mortgage loans by the determination date (which will be at
    least ten days before that Distribution Date) and not previously distributed
  (including advances made by servicers, proceeds of mortgage loans that are
liquidated and scheduled amounts of distributions from buydown funds    
respecting buydown loans, if any), except:                              

        (a) all scheduled payments of principal and interest collected but
due on a date after that Distribution Date;                       

      (b) all Curtailments received after the previous calendar month;

      (c) all Payoffs received after the Prepayment Period immediately
  preceding that Distribution Date (together with any interest payment
      received with those Payoffs to the extent that it represents the payment
of interest accrued on the mortgage loans for the period after the
     previous calendar month), and interest that was accrued and received on
      Payoffs received during the period from the first to the 14th day of the
     month of that Distribution Date, which interest will not be included in
       the calculation of the Available Distribution Amount for any Distribution
Date;                                                             

     (d) Liquidation Proceeds and Insurance Proceeds received on the
mortgage loans after the previous calendar month;                 

 (e) all amounts in the Certificate Account that are due and
 reimbursable to a servicer or the master servicer under the pooling
agreement;                                                        

         (f) the sum of the fixed servicing fee and the master servicing fee
for each mortgage loan; and                                       

          (g) excess liquidation proceeds, which equals the excess, if any, of
  aggregate Liquidation Proceeds on mortgage loans received during the
      previous calendar month over the amount that would have been received if
  Payoffs had been made with respect to the mortgage loans on the date
those Liquidation Proceeds were received;                         

(2) the total, to the extent not previously distributed, of the 
    following amounts, to the extent advanced or received, as applicable, by the
master servicer:                                                        

        (a) all advances made by the master servicer for that Distribution
Date relating to mortgage loans; and                              

    (b) any amounts payable as Compensating Interest by the master
servicer on that Distribution Date; and                           

   (3) the total amount of any cash received during the calendar month
prior to that Distribution Date by the trustee or the master servicer in
   respect of the obligation or right of Washington Mutual Mortgage Securities
Corp. to repurchase any mortgage loans.                                 

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LAST SCHEDULED DISTRIBUTION DATE                                                

The Last Scheduled Distribution Date for the certificates is the        
Distribution Date in December 2031, which is the Distribution Date in the month 
after the scheduled maturity date for the latest maturing mortgage loan.        

    The actual rate of principal payments on the certificates will depend on the
rate of principal payments (including principal prepayments) on the mortgage    
loans, which, in turn, may be influenced by a variety of economic, geographic   
and social factors, as well as the level of prevailing mortgage interest rates. 
No assurance can be given as to the actual payment experience on the mortgage   
loans.                                                                          

MANDATORY AUCTION OF THE CLASS A CERTIFICATES                                   

   Prior to the Distribution Date in September 2006 (the 'AUCTION DISTRIBUTION
DATE'), Bankers Trust Company of California, N.A. (in this capacity, the        
'AUCTION ADMINISTRATOR') will auction the Class A Certificates to third-party   
investors.                                                                      

  ON THE AUCTION DISTRIBUTION DATE, EACH CLASS OF CLASS A CERTIFICATES STILL
OUTSTANDING WILL BE TRANSFERRED TO THIRD-PARTY INVESTORS. In the event that the 
certificates are held in book-entry form, the Auction Administrator will direct 
DTC to transfer the Class A Certificates from the holders to the applicable     
third-party investors. In the event that the certificates are no longer held in 
book-entry form, the holders of each class of Class A Certificates will be      
required to deliver their certificates to the certificate registrar for transfer
to third-party investors. The Auction Administrator will distribute to the      
holders of each class of Class A Certificates the sum of (x) the distributions  
of principal and interest otherwise due on the Auction Distribution Date and (y)
the Par Price (as defined below) for such certificates (to the extent that      
amount is received from the third-party investors who purchased that class of   
certificates at auction and from Greenwich Capital Derivatives, Inc. (the 'SWAP 
COUNTERPARTY') pursuant to the Swap Agreement (as defined below)).              

  On or before the Closing Date, the Auction Administrator will enter into a
swap contract (the 'SWAP AGREEMENT') with the Swap Counterparty, an affiliate of
Greenwich Capital Markets, Inc., an underwriter. Pursuant to the Swap Agreement,
the Swap Counterparty will be obligated to pay to the Auction Administrator the 
excess, if any, of the Par Price over the Auction Price (as defined below) for  
each class of Class A Certificates; and the Auction Administrator will be       
obligated to pay to the Swap Counterparty or its designee the excess, if any, of
the Auction Price over the Par Price for each class of Class A Certificates. A  
separate auction will be held for each class of Class A Certificates and,       
therefore, the Auction Price and the Par Price will be calculated separately for
each class.                                                                     

 The 'AUCTION PRICE' is the price at which the Auction Administrator sells
the applicable Class A Certificates to the third-party investors. The price will
include accrued interest from the first day of the month in which the Auction   
Distribution Date occurs up to but excluding the Auction Distribution Date for  
each of the Class A Certificate other than the Class A-1 Certificates.          

The 'PAR PRICE' is the sum of (i) the Class Principal Balance of the    
applicable Class A Certificates, after application of all principal             
distributions and realized losses on the Auction Distribution Date and (ii) in  
the case of the Class A-2, Class A-3 and Class A-4 Certificates, accrued        
interest on that Class Principal Balance from the first day of the month in     
which the Auction Distribution Date occurs up to but excluding the Auction      
Distribution Date.                                                              

The Royal Bank of Scotland plc ('RBS'), an affiliate of the Swap        
Counterparty, will guarantee the obligations of the Swap Counterparty under the 
Swap Agreement. As of the date of this prospectus supplement, the long-term debt
obligations of RBS are rated 'AA - ' by S&P, 'Aa1' by Moody's and 'AA' by Fitch.

The Swap Counterparty and RBS have the right to assign their respective 
rights and obligations under the Swap Agreement.                                

OPTIONAL TERMINATION OF THE TRUST                                               

On any Distribution Date after the first date on which the aggregate    
outstanding principal balance of the mortgage loans is less than or equal to 5% 
of the aggregate principal balance of the mortgage loans                        

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as of the Cut-Off Date, the master servicer may repurchase the mortgage loans   
and all property acquired in respect of any mortgage loan remaining in the      
Trust, which will cause the termination of the Trust and the retirement of the  
certificates. The repurchase price will equal, after deduction of related       
advances by the master servicer, the sum of (1) 100% of the aggregate           
outstanding principal balance of the mortgage loans (other than Liquidated      
Mortgage Loans), plus accrued interest at the applicable Pass-Through Rates     
through the last day of the month of repurchase, less any Bankruptcy Losses     
realized with respect to the mortgage loans not already allocated to the        
certificates and (2) the fair market value of all other property in the Trust.  

The proceeds of that repurchase will be treated as a prepayment of the  
mortgage loans for purposes of distributions to certificateholders. Accordingly,
an optional termination of the Trust will cause the outstanding principal       
balance of the certificates to be paid in full through the distribution of those
proceeds and the allocation of the associated realized losses, if any, on each  
mortgaged property in the Trust the fair market value of which is less than the 
aggregate principal balance of the related mortgage loan as of the time that the
Trust acquired the mortgaged property and accrued and unpaid interest on that   
mortgage loan, and upon that payment in full, the Trust will be terminated. In  
no event will the Trust continue beyond the expiration of 21 years from the     
death of the survivor of the persons identified in the pooling agreement. See   
'Description of Certificates -- Termination' in the prospectus.                 

SERVICING COMPENSATION AND PAYMENT OF EXPENSES                                  

  The master servicer will receive a fee for its services as master servicer
under the pooling agreement. The master servicing fee is calculated as a per    
annum percentage for each mortgage loan. The master servicing fee with respect  
to each mortgage loan will equal 0.050%.                                        

 Washington Mutual Mortgage Securities Corp., as master servicer, will pay
all expenses incurred in connection with its responsibilities under the pooling 
agreement (subject to reimbursement as described in the prospectus for certain  
expenses such as those incurred by it in connection with the liquidation of     
defaulted mortgage loans and the restoration of damaged mortgaged properties),  
including, without limitation, the various items of expense described in the    
prospectus. In particular, each month or year, as applicable, the master        
servicer will be obligated to pay from the master servicing fee the fees of the 
trustee and certain other fees and expenses of the Trust, as prescribed by the  
pooling agreement.                                                              

The fixed servicing fee will be calculated as a per annum percentage for
each mortgage loan. The fixed servicing fee with respect to each mortgage loan  
will equal 0.750%. In addition, the servicer will receive as a servicing fee for
each Distribution Date in or before September 2006, the product of (x) the      
aggregate Class Principal Balance of the Class A Certificates immediately before
that Distribution Date and (y) the excess, if any, of (i) the Weighted Average  
Pass-Through Rate over (ii) the weighted average annual certificate interest    
rate of the Class A Certificates. Any prepayment penalty on a mortgage loan will
be paid as additional servicing compensation to the servicer.                   

SPECIAL SERVICING AGREEMENTS                                                    

   The pooling agreement permits the master servicer to enter into one or more
special servicing agreements with unaffiliated owners of one or more classes of 
Subordinate Certificates or of a class of securities representing interests in  
one or more classes of Subordinate Certificates. Under those agreements, the    
owner may, for delinquent mortgage loans:                                       

(a) instruct the master servicer to start or delay foreclosure  
proceedings, provided that the owner deposits a specified amount of cash
with the master servicer, which will be available for distribution to   
   certificateholders if Liquidation Proceeds are less than they otherwise may
have been had the master servicer acted pursuant to its normal servicing
procedures;                                                             

       (b) purchase those delinquent mortgage loans from the Trust immediately
before the beginning of foreclosure proceedings at a price equal to the 
   aggregate outstanding principal balance of the mortgage loans, plus accrued
  interest at the applicable mortgage interest rates through the last day of
the month in which the mortgage loans are purchased; and/or             

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(c) assume all of the servicing rights and obligations for the  
  delinquent mortgage loans so long as (i) the master servicer has the right
 to transfer the servicing rights and obligations of the mortgage loans to
another servicer and (ii) the owner will service the mortgage loans     
according to Washington Mutual Mortgage Securities Corp.'s servicing    
guidelines.                                                             

PURCHASE OF DELINQUENT MORTGAGE LOANS                                           

Subject to certain limitations in the pooling agreement, the master     
servicer:                                                                       

     may purchase from the trustee any delinquent mortgage loan that has
         been delinquent for 90 consecutive days or more; however, the aggregate
     purchase price of the delinquent mortgage loans so purchased by the
         master servicer may not exceed 0.50% of the aggregate principal balance
of all the mortgage loans as of the Cut-Off Date; or          

      upon discovery of a breach of any representation or warranty made to
    Washington Mutual Mortgage Securities Corp. in connection with its
       purchase or acquisition of a delinquent mortgage loan, has the right,
   but not the obligation, to repurchase that mortgage loan from the
trustee.                                                      

   The purchase price of each delinquent mortgage loan purchased by the master
servicer will equal the sum of (i) the scheduled principal balance of the       
mortgage loan and (ii) one month's interest on the mortgage loan at the         
applicable Pass-Through Rate. The proceeds of the purchase will be treated as a 
prepayment of the mortgage loans for purposes of distributions to               
certificateholders.                                                             

REPORTS TO CERTIFICATEHOLDERS                                                   

  The trustee may make available any reports required to be delivered by the
trustee pursuant to the pooling agreement and certain other information through 
its internet website. The web page is currently located at                      
'http://www-apps.gis.deutsche-bank.com/invr.' Assistance in using the website   
can be obtained by calling the trustee's investor relations desk at             
800-735-7777. Parties that are unable to use the above distribution method are  
entitled to have a paper copy mailed to them via first class mail by calling the
investor relations desk and indicating such. Washington Mutual Mortgage         
Securities Corp. may make available any reports required to be delivered by     
Washington Mutual Mortgage Securities Corp. pursuant to the prospectus or the   
pooling agreement and certain other information through its home page on the    
world wide web. The web page is located at 'www.wamumsc.com' and reports are    
available by clicking on 'Investor Information.'                                

DELINQUENCY, LOSS AND FORECLOSURE EXPERIENCE

   The following table contains certain information, as reported to Washington
Mutual Mortgage Securities Corp. by its various servicers, concerning recent    
delinquency, loss and foreclosure experience on mortgage loans included in      
various mortgage pools underlying all series of Washington Mutual Mortgage      
Securities Corp.'s mortgage pass-through certificates in which one or more      
classes of certificates were publicly offered.                                  

There can be no assurance that the delinquency, loss and foreclosure    
experience shown in the following table (which includes mortgage loans with     
various terms to stated maturity and a variety of payment characteristics, such 
as balloon loans and buydown loans) will be representative of the results that  
may be experienced for the mortgage loans included in the Trust. Delinquencies, 
losses and foreclosures generally are expected to occur more frequently after   
the first full year of the life of a mortgage loan. Accordingly, because a large
number of mortgage loans included in the mortgage pools underlying Washington   
Mutual Mortgage Securities Corp.'s mortgage pass-through certificates have been 
recently originated, the current level of delinquencies, losses and foreclosures
may not be representative of the levels that may be experienced over the lives  
of those mortgage loans.                                                        

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                                                        [Enlarge/Download Table]

                            AT OR FOR THE YEAR ENDED   AT OR FOR THE YEAR ENDED    AT OR FOR THE QUARTER ENDED 
                                DECEMBER 31, 1999          DECEMBER 31, 2000           SEPTEMBER 30, 2001      
                            -------------------------  -------------------------  -----------------------------
                                          BY DOLLAR                  BY DOLLAR                      BY DOLLAR  
                                          AMOUNT OF                  AMOUNT OF                      AMOUNT OF  
                            BY NO. OF       LOANS      BY NO. OF       LOANS        BY NO. OF         LOANS    
                              LOANS     (IN MILLIONS)    LOANS     (IN MILLIONS)      LOANS       (IN MILLIONS)
                              -----     -------------    -----     -------------      -----       -------------
                                                                                                               
Total Rated Mortgage Pass-                                                                                     
  Through Certificate                                                                                          
  Portfolio................  105,213      $21,983.8     103,172      $22,198.8       107,361        $27,145.6  
Average Balance(1).........   94,255       20,234.2     104,260       22,028.1       103,828         24,061.2  
Period of Delinquency(2)                                                                                       
    31 to 59 days..........    2,068          362.7       2,827          506.6         3,774            812.1  
    60 to 89 days..........      322           52.1         547           87.7           862            158.7  
    90 days or more........      261           44.2         452           77.1           721            129.2  
                             -------      ---------     -------      ---------       -------        ---------  
Total Delinquent Loans.....    2,651      $   459.0       3,826      $   671.4         5,357        $ 1,100.0  
Delinquency Rate...........     2.52%          2.09%       3.71%          3.02%         4.99%            4.05% 
Foreclosures(3)............      340      $    68.1         731      $   127.9           849        $   141.3  
Foreclosure Ratio(4).......     0.32%          0.31%       0.71%          0.58%         0.79%            0.52% 
Covered Losses(5)..........               $     2.8                  $     4.5                      $     5.3  
Applied Losses(6)..........               $     0.7                  $     3.7                      $     5.0  

Note: Due to rounding, totals may not equal sum of line items.                  
---------                                                                       

(1) Average balance for the period indicated is based on end of month balances  
divided by the number of months in the period indicated.                

(2) The indicated periods of delinquency are based on the number of days past   
   due, based on a 30-day month. No mortgage loan is considered delinquent for
  the purpose of this table until one month has passed after the related due
 date. A mortgage loan is no longer considered delinquent once foreclosure
proceedings have begun.                                                 

(3) Includes mortgage loans for which foreclosure proceedings had been          
instituted or for which the related property had been acquired as of the
dates indicated.                                                        

(4) Foreclosures as a percentage of total mortgage loans at the end of each     
period.                                                                 

(5) Covered losses are gross losses (as defined below) realized during the      
period indicated that were covered by credit enhancements obtained or   
established for one or more pools of mortgage loans, exclusive of any   
   insurance (such as primary mortgage insurance or ordinary hazard insurance)
that was available for specific mortgage loans or mortgaged properties. 
'Gross losses' are the sum for each mortgage loan liquidated during the 
  applicable period of the difference between (a) the sum of the outstanding
principal balance plus accrued interest, plus all liquidation expenses  
    related to the mortgage loan and (b) all amounts received in connection with
    the liquidation of the related mortgaged property, including insurance (such
    as primary mortgage insurance or ordinary hazard insurance) available solely
for the mortgage loan or the related mortgaged property.                

(6) Applied losses are covered losses that were applied against the outstanding 
principal balance of the mortgage pass-through certificates during the  
period indicated.                                                       

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YIELD AND PREPAYMENT CONSIDERATIONS 

GENERAL                                                                         

   The yield to maturity of each class of certificates will depend upon, among
other things, the price at which the certificates are purchased, the applicable 
interest rate on the certificates, the actual characteristics of the mortgage   
loans, the rate of principal payments (including prepayments) on the mortgage   
loans and the rate of liquidations on the mortgage loans. The yield to maturity 
to holders of the certificates (other than the Class A-1 Certificates) will be  
lower than the yield to maturity otherwise produced by the applicable interest  
rate and purchase price of those certificates because principal and interest    
distributions will not be payable to the certificateholders until the 25th day  
of the month following the month of accrual (without any additional distribution
of interest or earnings with respect to the delay).                             

The mortgage interest rates on the mortgage loans will be fixed for     
approximately the first five years after origination and thereafter will adjust 
every year and may vary significantly over time. When a mortgage loan begins its
adjustable period, increases and decreases in the mortgage interest rate on that
mortgage loan will be limited by the Periodic Cap, if any, the Rate Ceiling, and
the Rate Floor and will be based on the Index in effect 45 days prior to the    
related Adjustment Date plus the applicable Margin. The Index may not rise and  
fall consistently with mortgage interest rates. As a result, the mortgage       
interest rates on the mortgage loans at any time may not equal the prevailing   
mortgage interest rates for similar adjustable-rate loans, and accordingly the  
prepayment rate may be lower or higher than would otherwise be anticipated.     
Moreover, each mortgage loan has a Rate Ceiling, and each mortgage loan has a   
Rate Floor, which in many cases is equal to the Margin.                         

Further, some mortgagors who prefer the certainty provided by fixed-rate
mortgage loans may nevertheless obtain adjustable-rate mortgage loans at a time 
when they regard the mortgage interest rates (and, therefore, the payments) on  
fixed-rate mortgage loans as unacceptably high. These mortgagors may be induced 
to refinance adjustable-rate mortgage loans when the mortgage interest rates and
monthly payments on comparable fixed-rate mortgage loans decline to levels which
these mortgagors regard as acceptable, even though such mortgage interest rates 
and monthly payments may be significantly higher than the current mortgage      
interest rates and monthly payments on the mortgagors' adjustable-rate mortgage 
loans. The ability to refinance a mortgage loan will depend on a number of      
factors prevailing at the time refinancing is desired, including, without       
limitation, real estate values, the mortgagor's financial situation, prevailing 
mortgage interest rates, the mortgagor's equity in the related mortgaged        
property, tax laws and prevailing general economic conditions. In addition, the 
interest rate on the certificates may decrease, and may decrease significantly  
after the mortgage interest rates on the mortgage loans begin to adjust.        

    On October 31, 2001, the United States Treasury Department announced that it
was suspending issuance of its 30-year bonds. It is possible that this          
development could lead to generally lower mortgage loan interest rates and a    
resulting increased level of mortgage loan refinancings, which could accelerate 
mortgage loan prepayment rates over previously experienced levels.              

PRINCIPAL PREPAYMENTS AND COMPENSATING INTEREST                                 

  When a mortgagor prepays a mortgage loan in full between Due Dates for the
mortgage loan, the mortgagor pays interest on the amount prepaid only to the    
date of prepayment instead of for the entire month. Also, when a Curtailment is 
made on a mortgage loan together with the scheduled Monthly Payment for a month 
on or after the related Due Date, the principal balance of the mortgage loan is 
reduced by the amount of the Curtailment as of that Due Date, but the principal 
is not distributed to certificateholders until the Distribution Date in the next
month; therefore, one month of interest shortfall accrues on the amount of such 
Curtailment.                                                                    

 To reduce the adverse effect on certificateholders from the deficiency in
interest payable as a result of a Payoff on a mortgage loan between its Due     
Dates, the master servicer will pass through Compensating Interest to the       
certificateholders to the limited extent and in the manner described below. The 
master servicer is obligated to remit to the Certificate Account on the day     
before each Distribution Date with respect to the mortgage loans that experience
a Payoff between the 15th day and the last day of the month before the          
Distribution Date, an amount equal to the lesser of (a) any shortfall for the   
previous month in interest collections resulting from the timing of Payoffs made
from the 15th day of the calendar                                               

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month before the Distribution Date to the last day of the month and (b) the     
applicable monthly master servicing fee payable to the master servicer, any     
reinvestment income realized by the master servicer relating to Payoffs made    
during the Prepayment Period, and interest payments on the Payoffs received     
during the period of the first day through the 14th day of the month of the     
Distribution Date. Payoffs received on mortgage loans from the first day through
the 14th day of any month will be passed through to the certificateholders on   
the Distribution Date of the same month (except for Payoffs received from the   
Cut-Off Date through November 14, 2001, which will be passed through to the     
certificateholders on the December 2001 Distribution Date), rather than on the  
Distribution Date of the following month, together with a full month's interest 
for the prior month. Accordingly, no Compensating Interest will be payable for  
Payoffs received during that period. Payoffs received during the period from the
15th day through the last day of any month will be passed through on the        
Distribution Date in the following month, and, in order to provide for a full   
month's interest payment for the prior month, Compensating Interest will be     
passed through to certificateholders for that period.                           

To the extent that the amount allocated to pay Compensating Interest is 
insufficient to cover the deficiency in interest payable as a result of the     
timing of a Payoff, or to the extent that there is an interest deficiency from a
Curtailment or the application of the Relief Act, that remaining deficiency will
be allocated pro rata to the amount of the variable servicing fee and to the    
certificates, according to the amount of the variable servicing fee and the     
amount of interest to which each class of certificates would otherwise be       
entitled, in each case, in reduction of those amounts.                          

RATE OF PAYMENTS                                                                

The rate of principal payments on the certificates generally is directly
related to the rate of principal payments on the mortgage loans, which may be in
the form of scheduled payments, principal prepayments or liquidations. See 'Risk
Factors' in this prospectus supplement and 'Yield Considerations' in the        
prospectus. Except for approximately 4.3% (by principal balance) of the mortgage
loans, which have prepayment penalties if mortgagors make any prepayments during
a period ranging from one to three years after origination, mortgagors may      
prepay the mortgage loans at any time without penalty.                          

From time to time, Washington Mutual Mortgage Securities Corp. or its   
servicers, including Washington Mutual Bank, FA, may implement programs to      
solicit mortgagors of qualifying mortgage loans that they service for refinance,
including the mortgage loans underlying the certificates. While those programs  
will not specifically target the mortgage loans underlying the certificates for 
refinance, they may have the effect of accelerating the prepayment rate of those
mortgage loans, which would adversely affect the yield on all classes of        
certificates purchased at a premium.                                            

A higher than anticipated rate of prepayments would reduce the aggregate
principal balance of the mortgage loans more quickly than expected. As a        
consequence, aggregate interest payments for the mortgage loans would be        
substantially less than expected. Therefore, a higher rate of principal         
prepayments could result in a lower than expected yield to maturity on each     
class of certificates purchased at a premium, and in certain circumstances      
investors may not fully recover their initial investments. Conversely, a lower  
than expected rate of principal prepayments would reduce the return to investors
on any classes of certificates purchased at a discount, in that principal       
payments for the mortgage loans would occur later than anticipated. There can be
no assurance that certificateholders will be able to reinvest amounts received  
from the certificates at a rate that is comparable to the applicable interest   
rate on the certificates. Investors should fully consider all of the associated 
risks.                                                                          

PREPAYMENT ASSUMPTIONS                                                          

    Prepayments on mortgage loans are commonly measured relative to a prepayment
standard or model. The prepayment model used in this prospectus supplement (the 
'CONSTANT PREPAYMENT RATE' or 'CPR') assumes that the outstanding principal     
balance of a pool of mortgage loans prepays at a specified constant annual rate.
In generating monthly cash flows, this rate is converted to an equivalent       
monthly rate. A 25% CPR assumes a constant per annum rate of prepayment of 25%  
of the then outstanding principal balance of the pool of mortgage loans.        
Likewise, a 5% CPR, 15% CPR, 35% CPR and 45% CPR assumes a constant per annum   
rate of prepayment of 5%, 15%, 35% and 45%, respectively, of the then           
outstanding principal balance of the pool of mortgage loans.                    

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    None of the prepayment rates purports to be either an historical description
of the prepayment experience of any pool of mortgage loans or a prediction of   
the anticipated rate of prepayment of any pool of mortgage loans, including the 
mortgage pool underlying the certificates. Furthermore, there is no assurance   
that the mortgage loans will prepay at any given percentage of the CPR. The     
actual rate of prepayments on the mortgage loans may be influenced by a variety 
of economic, geographic, social and other factors. In general, during the       
initial fixed-rate period, if prevailing mortgage interest rates fall           
significantly below the mortgage interest rates on the mortgage loans underlying
the certificates, those mortgage loans are likely to be subject to higher       
prepayment rates than if prevailing mortgage interest rates remain at or above  
the mortgage interest rates on the mortgage loans underlying the certificates.  
Conversely, during the initial fixed-rate period, if prevailing mortgage        
interest rates rise above the mortgage interest rates on the mortgage loans     
underlying the certificates, the rate of prepayment would be expected to        
decrease. A comparatively low interest-rate environment may result in a higher  
than expected rate of prepayments on the mortgage loans and, correspondingly, an
earlier than expected retirement of the certificates.                           

   This prospectus supplement does not describe the specific factors that will
affect the prepayment of the mortgage loans or their relative importance.       
Factors not identified in this prospectus supplement may significantly affect   
the prepayment rate of the mortgage loans. In particular, this prospectus       
supplement makes no representation as to either the percentage of the principal 
amount of the mortgage loans that will be paid as of any date or the overall    
rate of prepayment.                                                             

  For purposes of the tables in Appendix A, it is assumed (collectively, the
'MODELING ASSUMPTIONS') that the mortgage loans are comprised of the groups of  
hypothetical mortgage loans, which have the common characteristics indicated:   

GROUPS OF HYPOTHETICAL MORTGAGE LOANS 

                                                        [Enlarge/Download Table]

                                REMAINING  ORIGINAL                                           
HYPOTHETICAL  UNPAID PRINCIPAL    TERM       TERM        MORTGAGE      PASS-THROUGH           
LOAN NUMBER      BALANCE($)     (MONTHS)   (MONTHS)  INTEREST RATE(%)    RATE(%)     MARGIN(%)
-----------      ----------     --------   --------  ----------------    -------     ---------
                                                                                              
     1         330,359,078.87      359       360          6.65648        5.85648      2.75113 
     2         380,619,431.83      359       360          6.53835        5.73835      2.75063 

                                                        [Enlarge/Download Table]

                                                                 MAXIMUM                      
              MONTHS TO FIRST  INTEREST-ONLY                   INCREASE ON                    
HYPOTHETICAL       RATE        REMAINING TERM  RATE CEILING  FIRST ADJUSTMENT                 
LOAN NUMBER     ADJUSTMENT        (MONTHS)          (%)          DATE(%)       PERIODIC CAP(%)
-----------     ----------        --------          ---          -------       ---------------
                                                                                              
     1              59               NA          11.67524        5.00000           2.00000    
     2              59               59          11.56188        5.00000           2.00000    

and that:                                                                       

the Index remains constant at 2.1000%;                        

       the fixed servicing fee and the master servicing fee remain constant;

        scheduled payments on all mortgage loans are received on the first day
of each month beginning December 1, 2001;                     

        any Payoffs on the mortgage loans are received on the last day of each
   month beginning in November 2001 and include 30 days of interest;

there are no defaults or delinquencies on the mortgage loans; 

 optional termination of the Trust does not occur and the senior
certificates are retired on the Auction Distribution Date;    

        there are no partial prepayments on the mortgage loans and prepayments
        are computed after giving effect to scheduled payments received on the
following day;                                                

        the mortgage loans prepay at the indicated constant percentages of the
CPR;                                                          

 the date of issuance for the certificates is November 14, 2001;

       cash distributions are received by the certificateholders on the 25th
day of each month when due; and                               

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        the scheduled monthly payments for each hypothetical mortgage loan are
     computed based upon its unpaid principal balance, mortgage interest
        rate and amortized remaining term such that each hypothetical mortgage
loan will fully amortize on its maturity date.                

The approximate Class Principal Balances of the Junior Subordinate      
Certificates as of the Closing Date will be as follows: Class B-4, $1,421,000;  
Class B-5, $710,000; and Class B-6, $2,137,410.                                 

Any discrepancy between the actual characteristics of the mortgage loans
underlying the certificates and the characteristics of the hypothetical mortgage
loans set forth above may affect the percentages of the initial Class Principal 
Balances set forth in the tables in Appendix A and the weighted average lives of
the offered certificates. In addition, to the extent that the characteristics of
the actual mortgage loans and the initial Class Principal Balances differ from  
those assumed in preparing the tables in Appendix A, the outstanding Class      
Principal Balance of any class of offered certificates may be reduced to zero   
earlier or later than indicated by the tables.                                  

Variations in actual prepayment experience may increase or decrease the 
percentages of the original outstanding Class Principal Balances and the        
weighted average lives shown in the tables in Appendix A. Variations may occur  
even if the average prepayment experience of all the mortgage loans equals the  
indicated percentage of the CPR. There is no assurance, however, that           
prepayments of the mortgage loans will conform to any given percentage of the   
CPR.                                                                            

   Based on the assumptions described above, the tables in Appendix A indicate
the weighted average lives of the offered certificates and provide the          
percentages of the initial outstanding Class Principal Balance of each class of 
offered certificates that would be outstanding after each of the dates shown at 
various constant percentages of the CPR.                                        

LACK OF HISTORICAL PREPAYMENT DATA                                              

There are no historical prepayment data available for the mortgage pool 
underlying the certificates, and comparable data are not available because the  
mortgage loans underlying the certificates are not a representative sample of   
mortgage loans generally. In addition, historical data available for mortgage   
loans underlying mortgage pass-through certificates issued by the Government    
National Mortgage Association, Fannie Mae and Freddie Mac may not be comparable 
to prepayments expected to be experienced by the mortgage pool because the      
mortgage loans underlying the certificates may have characteristics which differ
from the mortgage loans underlying certificates issued by the Government        
National Mortgage Association, Fannie Mae and Freddie Mac.                      

    Washington Mutual Mortgage Securities Corp. makes no representation that the
mortgage loans will prepay in the manner or at any of the rates assumed in the  
tables in Appendix A or below in ' -- Yield Considerations with Respect to the  
Senior Subordinate Certificates.' Each investor must make its own decision as to
the appropriate prepayment assumptions to be used in deciding whether or not to 
purchase any of the offered certificates. Since the rate of principal payments  
(including prepayments) on, and repurchases of, the mortgage loans will         
significantly affect the yields to maturity on the offered certificates (and    
especially the yields to maturity on the Subordinate Certificates), prospective 
investors are urged to consult their investment advisors as to both the         
anticipated rate of future principal payments (including prepayments) on the    
mortgage loans and the suitability of the offered certificates to their         
investment objectives.                                                          

YIELD CONSIDERATIONS WITH RESPECT TO THE SENIOR SUBORDINATE CERTIFICATES        

If the aggregate Certificate Principal Balance of the Junior Subordinate
Certificates is reduced to zero, the yield to maturity on the Senior Subordinate
Certificates will become extremely sensitive to losses on the mortgage loans and
the timing of those losses, because the entire amount of those losses will      
generally be allocated first to the Class B-3, then to the Class B-2, and then  
to the Class B-1 Certificates. The aggregate initial Certificate Principal      
Balance of the Junior Subordinate Certificates is equal to approximately 0.60%  
of the aggregate principal balance of the mortgage loans as of the Cut-Off Date.

  For the Senior Subordinate Certificates, this prospectus supplement uses a
standard default assumption, or SDA, that represents an assumed default rate,   
which is a percentage of the outstanding principal                              

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balance of a hypothetical pool of mortgage loans. The SDA does not describe     
historical default experience or predict future default rates of any pool of    
mortgage loans, including the mortgage loans in the trust.                      

A 100% SDA assumes constant annual default rates on the then outstanding
principal balance of the mortgage loans, as follows:                            

                                                                [Download Table]
                                                                              
1st month:                                     0.02%                          
2nd through 29th month:                        increasing by 0.02% each month 
30th through 60th month:                       0.60%                          
61st through 120th month:                      declining by 0.0095% each month
121st month and after:                         0.03%                          

  The tables below assume that there is no delay between the default and the
liquidation of the mortgage loans. In the tables below, an SDA of 0% assumes no 
defaults, an SDA of 200% assumes default rates 2.00 times 100% SDA, and so      
forth. However, it is highly unlikely that the prepayments or realized losses on
the mortgage loans will occur as the following tables assume, and, as a result, 
the actual pre-tax yields to maturity on the Class B-1, Class B-2, and          
Class B-3 Certificates are highly likely to differ from those shown in the      
tables.                                                                         

 The following tables show the sensitivity of the yield to maturity on the
Senior Subordinate Certificates to different prepayment rates and levels of     
defaults based on the Modeling Assumptions, except that it has been assumed     
that:                                                                           

       mortgage loan defaults occur on the last day of each month at the SDA
         percentages in the tables, and defaulted mortgage loans are immediately
liquidated;                                                   

     each liquidation of a defaulted mortgage loan results in a realized
         loss allocable to principal equal to the percentage indicated, the loss
  severity percentage, multiplied by the principal balances of the
mortgage loans assumed to be liquidated;                      

 there are no delinquencies on the mortgage loans, and principal
    payments on the mortgage loans, other than those on mortgage loans
 assumed to be liquidated, will be timely received together with
        prepayments, if any, at the respective constant percentages of the CPR
set forth in the table;                                       

the purchase prices of the Class B-1, Class B-2 and Class B-3 
 Certificates will be approximately 101.375000%, 101.203125% and
         99.703125%, respectively, of their Class Principal Balance plus accrued
interest from the Cut-Off Date;                               

         realized losses on liquidation of the mortgage loans occur at a rate of
        20% and 40% (as indicated in the table under the column 'LOSS SEVERITY
         PERCENTAGE') of the outstanding principal balance of defaulted mortgage
       loans at the time of default in the month in which the mortgage loans
first default;                                                

        there are no Special Hazard Losses, Fraud Losses or Bankruptcy Losses;
and                                                           

     all scheduled payments on mortgage loans are advanced by the master
servicer whether or not received from the related mortgagors. 

    The rate of distributions in reduction of the Class Principal Balance of any
class of Senior Subordinate Certificates will be related to the actual          
amortization schedule of the mortgage loans; accordingly, the interest          
distributions and distributions in reduction of the Class Principal Balances of 
the Senior Subordinate Certificates may result in yields to maturity that differ
from those reflected below.                                                     

The tables below are for illustrative purposes only and this prospectus 
supplement does not represent that these assumptions are reasonable or that the 
actual rates of prepayment and liquidation and loss severity experience of the  
mortgage loans will in any way correspond to any of the assumptions made in this
prospectus supplement. In addition, it is unlikely that liquidations will occur 
in the month of default and the timing of liquidations may cause the pre-tax    
yield to maturity of the Senior Subordinate Certificates to differ from those   
shown below.                                                                    

    It is possible that those mortgage loans that are more likely to default are
also less likely to experience prepayments, which means that higher prepayment  
speeds would not affect the expected amount of realized losses. However, the    
following tables also assume that the Senior Subordinate Certificates are priced
at a discount to their par values. Because prepayments occur at par, the yield  
on                                                                              

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the Senior Subordinate Certificates may increase due to prepayments that do     
occur, even if realized losses also occur. Differences between the assumptions  
in the tables and the actual characteristics and performance of the mortgage    
loans will likely result in different yields from those shown in the tables.    
Because differences between assumed and actual characteristics can affect the   
performance of the certificates, investors should understand the hypothetical   
nature of the tables, which give only a general sense of the sensitivity of     
yields to maturity under varying, but not all, realized loss and prepayment     
scenarios.                                                                      

SENSITIVITY OF PRE-TAX YIELD TO MATURITY
OF THE SENIOR SUBORDINATE CERTIFICATES TO 
PREPAYMENTS AND REALIZED LOSSES 

CLASS B-1 CERTIFICATES

                                                                [Download Table]

                                                LOSS   
PERCENTAGE OF                                 SEVERITY 
     SDA        5% CPR   25% CPR   45% CPR   PERCENTAGE
     ---        ------   -------   -------   ----------
                                                       
    0%          4.6%     5.1%       5.2%      N/A      
  100%          4.6%     5.1%       5.2%      20%      
  100%          4.6%     5.1%       5.2%      40%      
  200%          4.6%     5.1%       5.2%      20%      
  200%          2.4%     5.1%       5.2%      40%      

CLASS B-2 CERTIFICATES

                                                                [Download Table]

                                                 LOSS   
PERCENTAGE OF                                  SEVERITY 
     SDA        5% CPR    25% CPR   45% CPR   PERCENTAGE
     ---        ------    -------   -------   ----------
                                                        
    0%             4.6%    5.1%      5.2%      N/A      
  100%             4.6%    5.2%      5.2%      20%      
  100%             3.9%    5.1%      5.2%      40%      
  200%             4.0%    5.1%      5.2%      20%      
  200%           (37.6%)   5.1%      5.2%      40%      

CLASS B-3 CERTIFICATES

                                                                [Download Table]

                                                 LOSS   
PERCENTAGE OF                                  SEVERITY 
     SDA        5% CPR    25% CPR   45% CPR   PERCENTAGE
     ---        ------    -------   -------   ----------
                                                        
    0%             4.8%      5.5%    5.7%        N/A    
  100%             4.6%      5.5%    5.7%        20%    
  100%           (31.6)%     5.4%    5.7%        40%    
  200%           (30.8)%     5.5%    5.7%        20%    
  200%           (68.0)%   (13.8%)   5.3%        40%    

  The following table sets forth the amount of realized losses that would be
incurred with respect to the certificates in the aggregate under each of the    
scenarios in the three preceding tables, expressed as a percentage of the       
aggregate outstanding principal balance of the mortgage loans as of the Cut-Off 
Date:                                                                           

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AGGREGATE REALIZED LOSSES 

                                                                [Download Table]

                                                LOSS   
PERCENTAGE OF                                 SEVERITY 
     SDA        5% CPR   25% CPR   45% CPR   PERCENTAGE
     ---        ------   -------   -------   ----------
                                                       
  100%          0.6%      0.3%      0.1%      20%      
  100%          1.2%      0.5%      0.2%      40%      
  200%          1.2%      0.5%      0.2%      20%      
  200%          2.4%      1.0%      0.4%      40%      

  The characteristics of the mortgage loans underlying the certificates will
not correspond exactly to those assumed in preparing the tables above. The yield
to maturity of each class of the Senior Subordinate Certificates therefore will 
differ even if all the mortgage loans prepay monthly at the related assumed     
prepayment rate. In addition, it is not likely that the mortgage loans will     
prepay at the same percentage of the CPR, and the timing of changes in the rate 
of prepayments may affect significantly the yield to maturity received by a     
holder of a class of Senior Subordinate Certificates.                           

ADDITIONAL YIELD CONSIDERATIONS APPLICABLE SOLELY TO THE CLASS R CERTIFICATES   

The Class R Certificateholders' after-tax rate of return on their       
certificates will reflect their pre-tax rate of return, reduced by the taxes    
required to be paid with respect to the Class R Certificates. Holders of the    
Class R Certificates may have tax liabilities with respect to their certificates
during the early years of the REMICs' term that substantially exceed any        
distributions payable during those years. In addition, holders of the Class R   
Certificates may have tax liabilities with respect to their certificates the    
present value of which substantially exceeds the present value of distributions 
payable thereon and of any tax benefits that may arise with respect thereto.    
Accordingly, the after-tax rate of return on the Class R Certificates may be    
negative or may otherwise be significantly adversely affected. The timing and   
amount of taxable income attributable to the Class R Certificates will depend   
on, among other things, the timing and amounts of prepayments and losses        
experienced by the mortgage pool.                                               

  The Class R Certificateholders should consult their own tax advisors as to
the effect of taxes and the receipt of any payments received in connection with 
the purchase of the Class R Certificates on after-tax rates of return on the    
Class R Certificates. See 'Certain Federal Income Tax Consequences' in this     
prospectus supplement and in the prospectus.                                    

ADDITIONAL INFORMATION                                                          

Washington Mutual Mortgage Securities Corp. intends to file with the    
Securities and Exchange Commission additional yield tables and other            
computational materials for one or more classes of the offered certificates on a
Current Report on Form 8-K. Those tables and materials were prepared by the     
Greenwich Capital Markets, Inc. at the request of certain prospective investors,
based on assumptions provided by, and satisfying the special requirements of,   
those prospective investors. Those tables and materials are preliminary in      
nature, and the information contained in the Current Report is subject to, and  
superseded by, the information in this prospectus supplement.                   

CREDIT ENHANCEMENTS 

SUBORDINATION                                                                   

  The Senior Certificates receive distributions of interest and principal to
which they are entitled before distributions of interest or principal to the    
Subordinate Certificates. No class of Subordinate Certificates will receive     
distributions of interest or principal on any Distribution Date until the       
Subordinate Certificates senior to that class have received all distributions of
interest and principal due on or before the Distribution Date. See 'Description 
of the Certificates -- Priority of Distributions' in this prospectus supplement.

   Losses on mortgage loans will be allocated, in each case, until their Class
Principal Balances have been reduced to zero, first, to the Junior Subordinate  
Certificates in reverse numerical order; second, to the Class B-3 Certificates; 
third, to the Class B-2 Certificates; fourth, to the Class B-1 Certificates; and
fifth,                                                                          

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to the outstanding classes of Senior Certificates as described under            
'Description of the Certificates -- Subordination and Allocation of Losses' in  
this prospectus supplement; provided, however, that only a certain specified    
amount of Special Hazard Losses, Fraud Losses and Bankruptcy Losses will be     
allocated solely to the Subordinate Certificates, following which these types of
losses will be allocated by Pro Rata Allocation.                                

SHIFTING OF INTERESTS                                                           

  Unless credit enhancement to the Senior Certificates has reached a certain
level and the delinquencies and losses on the mortgage loans do not exceed      
certain limits, the Class A Certificates will, in the aggregate, generally      
receive 100% of principal payments, including prepayments, received with respect
to the mortgage loans until the seventh anniversary of the first Distribution   
Date. During the next four years, the Class A Certificates, in the aggregate,   
will generally receive their pro rata share of the scheduled principal payments 
and a disproportionately large, but decreasing, share of principal prepayments. 
This will result in an acceleration of the amortization of the Class A          
Certificates, in the aggregate, subject to the priorities described in          
'Description of the Certificates -- Distributions of Principal' in this         
prospectus supplement, enhancing the likelihood that holders of those classes of
certificates will be paid the full amount of principal to which they are        
entitled. See the second and third paragraphs of 'Description of the            
Certificates -- Distributions of Principal -- Principal Prepayments' and also   
the definitions of 'Adjusted Senior Percentage' in 'Description of the          
Certificates -- Distributions of Principal' in this prospectus supplement for   
important limitations on the accelerated amortization of the Class A            
Certificates.                                                                   

CERTAIN FEDERAL INCOME TAX CONSEQUENCES 

    For federal income tax purposes, Washington Mutual Mortgage Securities Corp.
will cause two REMIC elections to be made with respect to the Trust. The offered
certificates, other than the Class R Certificates, will represent ownership of  
REMIC regular interests and will generally represent ownership of debt for      
federal income tax purposes. For federal income tax purposes the Class R        
Certificates will represent ownership of the residual interests in REMIC I and  
REMIC II.                                                                       

    All interest and original issue discount ('OID') on the offered certificates
will be includable in certificateholders' income using the accrual method of    
accounting regardless of the certificateholders' usual methods of accounting. In
preparing federal income tax reports to certificateholders and the Internal     
Revenue Service, Washington Mutual Mortgage Securities Corp., as master         
servicer, will not treat any of the Offered Certificates as having been issued  
with OID. However, please see ' -- Special Tax Considerations Applicable to the 
Class A Certificates Relating to the Auctions' below for important              
considerations that could affect whether the Class A Certificates could be      
treated by the IRS as having been issued with OID. The prepayment assumption    
that will be used in determining the rate of accrual of market discount and     
premium, if any, for federal income tax purposes is 25% CPR, as described in    
this prospectus supplement under 'Yield and Prepayment Considerations.'         
Washington Mutual Mortgage Securities Corp. does not represent that the mortgage
loans will prepay at any given percentage of the CPR.                           

In certain circumstances, OID regulations (as described under 'Certain  
Federal Income Tax Consequences' in the prospectus) permit the holder of a debt 
instrument to recognize OID under a method that differs from that used by the   
issuer. Accordingly, it is possible that the holder of a certificate may be able
to select a method for recognizing OID that differs from that used by Washington
Mutual Mortgage Securities Corp. in preparing reports to the certificateholders 
and the Internal Revenue Service.                                               

 If actual prepayments differ sufficiently from the prepayment assumption,
the calculation of OID for certain classes of offered certificates might produce
a negative number for certain accrual periods. If that happens,                 
certificateholders will not be entitled to a deduction for that amount, but will
be required to carry that amount forward as an offset to OID, if any, accruing  
in future accrual periods.                                                      

Certain classes of certificates may be treated for federal income tax   
purposes as having been issued at a premium. Whether any holder of a certificate
will be treated as holding a certificate with amortizable bond premium will     
depend on the certificateholder's purchase price and the distributions remaining
to be made on the certificate when the certificateholder acquires it. Holders of
those classes of certificates should consult their own tax advisors regarding   
the possibility of making an election to amortize any                           

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premium. See 'Certain Federal Income Tax Consequences -- Taxation of Owners of  
REMIC Regular Certificates -- Original Issue Discount' and ' -- Market Discount 
and Premium' in the prospectus.                                                 

The offered certificates will generally be treated as 'qualifying real  
property loans' for mutual savings banks and domestic building and loan         
associations, 'loans secured by an interest in real property' for domestic      
building and loan associations, and 'real estate assets' for real estate        
investment trusts, or REITs, in the same proportion that the REMIC assets would 
be so treated. In addition, interest on the offered certificates will generally 
be treated as 'interest on obligations secured by mortgages on real property'   
for REITs in the same proportion that the REMIC income would be so treated. See 
'Certain Federal Income Tax Consequences' in the prospectus.                    

SPECIAL TAX CONSIDERATIONS APPLICABLE TO THE CLASS A CERTIFICATES RELATING TO   
THE AUCTIONS                                                                    

The purchase of a Class A Certificate, for federal income tax purposes, 
represents the purchase of an undivided beneficial interest in two assets, a    
REMIC regular interest and an auction. On the Auction Distribution Date, each   
class of Class A Certificates will be transferred to the third-party investor   
with the highest bid for that class in the applicable auction conducted by the  
Auction Administrator, and the holders will be entitled to receive the Par      
Price. The Trustee intends to treat each auction as a forward contract held     
separately and apart from the REMIC regular interest.                           

    Treatment of the REMIC regular interest portion and the auction portion of a
Class A Certificate will depend on how much of the Class A Certificate purchase 
price is allocated to each portion. Under treasury regulations concerning       
REMICs, each holder of a Class A Certificate must allocate its purchase price   
for the Certificate between the undivided interest in the REMIC regular interest
and the undivided interest in the applicable auction in accordance with the     
relative fair market value of each interest. The Trustee intends to take the    
position that no significant consideration will be paid for the auctions and    
that the purchase price allocable to the interest in the REMIC regular interest 
equals the purchase price of the Class A Certificates. The IRS could disagree,  
and if its position were upheld, the Class A Certificateholders could have      
income from original issue discount in addition to the stated interest on their 
certificates or small offsets of premium against that stated interest. See      
'Certain Federal Income Tax Consequences -- Taxation of Owners of REMIC Regular 
Certificates' in the prospectus.                                                

   The Class A Certificateholders' interests in the REMIC regular interest and
the applicable auction should be treated as a straddle under Section 1092 of the
Code. Treatment as a straddle requires any gain or loss realized upon the sale  
or exchange of the certificate (including any gain or loss realized in          
connection with the mandatory transfer of the certificate to a third-party      
investor on the Auction Distribution Date) to be treated as a short-term gain or
loss regardless of how long the certificate is held. Treatment as a straddle    
also generally requires the certificateholder to capitalize, rather than deduct,
any interest and carrying charges allocable to the certificate to the extent    
those charges exceed the ordinary income from the certificate includible for the
taxable year. In addition the Class A Certificates may have to be treated as    
part of a conversion transaction, in which case gain on sale will be treated as 
ordinary income to the extent the holder's yield from the investment is less    
than 120% of the applicable federal rate. In contrast, under the rule generally 
applicable to REMIC regular interests, gain on sale is treated as ordinary      
income to the extent the holder's yield from the REMIC regular interest is less 
than 110% of the applicable federal rate.                                       

   The correct treatment of the Class A Certificates is unclear. The IRS might
assert that the Class A Certificates represent the debt of or other interest in 
the Swap Counterparty. If such a position were upheld it could effect the timing
and character of the income on the Class A Certificates, and such certificates  
would not be treated as qualifying assets for purposes of                       
sections 856(c)(4)(A), 7701(a)(19)(C) and 860G(a)(3).                           

CLASS A CERTIFICATEHOLDERS ARE STRONGLY ADVISED TO CONSULT THEIR OWN TAX
ADVISORS REGARDING THE TREATMENT OF THEIR INTERESTS IN THE REMIC REGULAR        
INTEREST AND AUCTION, INCLUDING THE ALLOCATION OF ISSUE PRICE, TIMING, CHARACTER
AND SOURCE OF INCOME, GAIN, DEDUCTION AND LOSS RESULTING FROM THE OWNERSHIP OF  
THEIR CERTIFICATES.                                                             

SPECIAL TAX CONSIDERATIONS APPLICABLE TO THE RESIDUAL CERTIFICATES              

   The Internal Revenue Service has issued regulations under the provisions of
the Internal Revenue Code related to REMICs that significantly affect holders of
the Residual Certificates. The REMIC                                            

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regulations impose restrictions on the transfer or acquisition of certain       
residual interests, including the Residual Certificates. In addition, the REMIC 
regulations contain restrictions that apply to the transfer of 'noneconomic'    
residual interests to U.S. Persons. Pursuant to the pooling agreement, the      
Residual Certificates may not be transferred to non-U.S. Persons.               

The REMIC Regulations provide that a transfer to a U.S. Person of       
'noneconomic' residual interests will be disregarded for all federal income tax 
purposes, and that the purported transferor of 'noneconomic' residual interests 
will continue to remain liable for any taxes due with respect to the income on  
those residual interests, unless 'no significant purpose of the transfer was to 
impede the assessment or collection of tax.' Based on the REMIC Regulations, the
Residual Certificates may constitute noneconomic residual interests during some 
or all of their terms for purposes of the REMIC Regulations and, accordingly,   
unless no significant purpose of a transfer is to impede the assessment or      
collection of tax, transfers of the Residual Certificates may be disregarded and
purported transferors may remain liable for any taxes due with respect to the   
income on the Residual Certificates. All transfers of the Residual Certificates 
will be subject to certain restrictions under the terms of the pooling agreement
that are intended to reduce the possibility of any transfer being disregarded to
the extent that the Residual Certificates constitute noneconomic residual       
interests. The Internal Revenue Service has issued proposed changes to the REMIC
regulations that would add to the conditions necessary to assure that a transfer
of a noneconomic residual interest would be respected. The proposed additional  
condition would require that the amount received by the transferee be no less on
a present value basis than the present value of the net tax detriment           
attributable to holding the residual interest reduced by the present value of   
the projected payments to be received on the residual interest. In Revenue      
Procedure 2001-12, pending finalization of the new regulations, the IRS has     
expanded the 'safe harbor' for transfers of noneconomic residual interests to   
include certain transfers to domestic taxable corporations with large amounts of
gross and net assets where agreement is made that all future transfers will be  
to taxable domestic corporations in transactions that qualify for one of the    
'safe harbor' provisions. Eligibility for this safe harbor requires, among other
things, that the facts and circumstances known to the transferor at the time of 
transfer not indicate to a reasonable person that the taxes with respect to the 
residual interest will not be paid, with an unreasonably low cost for the       
transfer specifically mentioned as negating eligibility. The changes would be   
effective for transfers of residual interests occurring after February 4, 2000. 
See 'Certain Federal Income Tax Consequences -- Taxation of Owners of REMIC     
Residual Certificates -- Noneconomic REMIC Residual Certificates' in the        
prospectus.                                                                     

The Residual Certificateholders may be required to report an amount of  
taxable income with respect to the earlier accrual periods of the REMICs' term  
that significantly exceeds the amount of cash distributions received by the     
Residual Certificateholders from the REMIC with respect to those periods.       
Consequently, the Residual Certificateholders should have other sources of funds
sufficient to pay any federal income taxes due in the earlier years of the REMIC
as a result of their ownership of Residual Certificates. In addition, the       
required inclusion of this amount of taxable income during the REMICs' earlier  
accrual periods and the deferral of corresponding tax losses or deductions until
later accrual periods or until the ultimate sale or disposition of a Residual   
Certificate (or possibly later under the 'wash sale' rules of Section 1091 of   
the Internal Revenue Code) may cause the Residual Certificateholders' after-tax 
rate of return to be zero or negative even if the Residual Certificateholders'  
pre-tax rate of return is positive. That is, on a present value basis, the      
Residual Certificateholders' resulting tax liabilities could substantially      
exceed the sum of any tax benefits and the amount of any cash distributions on  
the Residual Certificates over their life.                                      

As discussed above, the rules for accrual of OID with respect to certain
classes of certificates are subject to significant complexity and uncertainty.  
Because OID on the certificates will be deducted by the related REMIC in        
determining its taxable income, any changes required by the Internal Revenue    
Service in the application of those rules to the certificates may significantly 
affect the timing of OID deductions to the related REMIC and therefore the      
amount of the related REMIC's taxable income allocable to holders of the        
Residual Certificates.                                                          

Purchasers of the Residual Certificates are strongly advised to consult 
their own tax advisors as to the economic and tax consequences of investment in 
the Residual Certificates.                                                      

For further information regarding the federal income tax consequences of
investing in the Residual Certificates, see 'Yield and Prepayment               
Considerations -- Additional Yield Considerations Applicable Solely             

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to the Residual Certificates' in this prospectus supplement and 'Certain Federal
Income Tax Consequences -- Taxation of Owners of REMIC Residual Certificates' in
the prospectus.                                                                 

 An individual, trust or estate that holds (whether directly or indirectly
through certain pass-through entities) a Residual Certificate may have          
significant additional gross income with respect to, but may be subject to      
limitations on the deductibility of, servicing and trustee's fees and other     
administrative expenses properly allocable to the REMICs in computing that      
certificateholder's regular tax liability and will not be able to deduct those  
fees or expenses to any extent in computing that certificateholder's alternative
minimum tax liability. See 'Certain Federal Income Tax                          
Consequences -- Pass-Through of Servicing Fees' and ' -- Taxation of Owners of  
REMIC Residual Certificates' in the prospectus.                                 

  Washington Mutual Mortgage Securities Corp. will be designated as the 'tax
matters persons' for the Trust as defined in the REMIC Regulations, and in      
connection therewith will be required to hold not less than 0.01% of the        
Residual Certificates.                                                          

For further information regarding the federal income tax consequences of
investing in the certificates, see 'Certain Federal Income Tax Consequences' in 
the prospectus.                                                                 

CERTAIN LEGAL INVESTMENT ASPECTS

 For purposes of the Secondary Mortgage Market Enhancement Act of 1984, or
SMMEA, the offered certificates, other than the Class B-2 and Class B-3         
Certificates, will constitute 'mortgage related securities' when they are       
issued. These mortgage related securities, or SMMEA Certificates, will be legal 
investments for persons, trusts, corporations, partnerships, associations,      
business trusts and business entities (including depository institutions, life  
insurance companies, and pension funds) created pursuant to or existing under   
the laws of the United States, or of any state, whose authorized investments are
subject to state regulation to the same extent that, under applicable law,      
obligations issued by or guaranteed as to principal and interest by the United  
States or any agency or instrumentality of the United States constitute legal   
investments for such entities. Under SMMEA, if a state enacted legislation      
before October 4, 1991 specifically limiting the legal investment authority of  
any type of those entities in 'mortgage related securities,' the SMMEA          
Certificates will constitute legal investments for those types of entities only 
to the extent provided by the legislation. Certain states have enacted such     
legislation. Investors should consult their own legal advisors in determining   
whether and to what extent the offered certificates, constitute legal           
investments for them.                                                           

SMMEA also amended the legal investment authority of federally-chartered
depository institutions as follows: federal savings and loan associations and   
federal savings banks may invest in, sell or otherwise deal with the SMMEA      
Certificates without limitation as to the percentage of their assets represented
by the SMMEA Certificates, federal credit unions may invest in the SMMEA        
Certificates and national banks may purchase the SMMEA Certificates for their   
own accounts without regard to the limitations generally applicable to          
investment securities prescribed by 12 U.S.C. 24 (Seventh), in each case subject
to such regulations as the applicable federal regulatory authority may adopt.   

 Institutions whose investment activities are subject to review by certain
regulatory authorities may be or may become subject to restrictions on          
investment in the offered certificates, which could be retroactively imposed.   
The Federal Financial Institutions Examination Council, the Federal Deposit     
Insurance Corporation, the Office of the Comptroller of the Currency, the Board 
of Governors of the Federal Reserve System, the Office of Thrift Supervision and
the National Credit Union Administration have adopted guidelines, and have      
proposed policies, regarding the suitability of investments in various types of 
derivative mortgage-backed securities, including securities such as the offered 
certificates. In addition, several states have adopted or are considering       
regulations that would prohibit regulated institutions subject to their         
jurisdiction from holding mortgage-backed securities such as the offered        
certificates. When adopted, the regulations could apply to the offered          
certificates retroactively. Investors should consult their own legal advisors in
determining whether and to what extent the offered certificates constitute legal
investments for them.                                                           

There may be other restrictions on the ability of certain investors,    
including depository institutions, either to purchase the offered certificates  
or to purchase the offered certificates representing more than a specified      
percentage of the investor's assets. Investors should consult their own legal   
advisors in determining whether and to what extent the offered certificates     
constitute legal investments for them.                                          

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ERISA CONSIDERATIONS

GENERAL                                                                         

   ERISA and Section 4975 of the Internal Revenue Code contain provisions that
may affect a fiduciary of an employee benefit plan or other plan or arrangement,
such as an individual retirement account. Plans, insurance companies or other   
persons investing Plan Assets (see 'ERISA Considerations -- Plan Asset          
Regulation' in the prospectus) should carefully review with their legal counsel 
whether owning offered certificates is permitted under ERISA or Section 4975 of 
the Internal Revenue Code. The Underwriter's Exemption, as described under      
'ERISA Considerations -- Underwriter's Exemption' in the prospectus, may provide
an exemption from restrictions imposed by ERISA or Section 4975 of the Internal 
Revenue Code and may permit a Plan to own, or Plan Assets to be used to         
purchase, the offered certificates other than the Residual Certificates.        
However, the Underwriter's Exemption contains several conditions, including the 
requirement that an affected Plan must be an 'accredited investor' as defined in
Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under  
the Securities Act of 1933, as amended.                                         

The Underwriter's Exemption, or any similar exemption that might be     
available, will not likely apply to the purchase, sale or holding of the        
Residual Certificates. Therefore, the trustee will not register transfers of the
Residual Certificates to a Plan, a trustee or other person acting on behalf of  
any Plan or any other person using Plan Assets to purchase the Residual         
Certificates without first receiving an opinion of counsel. The opinion of      
counsel must:                                                                   

     be satisfactory to Washington Mutual Mortgage Securities Corp., the
trustee and the master servicer;                              

       not be at the expense of Washington Mutual Mortgage Securities Corp.,
the trustee or master servicer; and                           

       conclude that the purchase of the certificates by or on behalf of the
Plan:                                                         

is permissible under applicable law;                    

            will not constitute or result in a non-exempt prohibited transaction
     under ERISA or Section 4975 of the Internal Revenue Code; and

         will not subject Washington Mutual Mortgage Securities Corp., the
       trustee or the master servicer to any obligation in addition to
those undertaken in the pooling agreement.              

   The Department of Labor amended the Underwriter's Exemption to permit Plans
to purchase and hold subordinate certificates such as the Senior Subordinate    
Certificates if they are rated 'BBB - ' or better at the time of purchase. See  
'ERISA Considerations -- Underwriter's Exemption' in the prospectus. A Plan, or 
other purchaser acting on its behalf or with Plan Assets, that purchases the    
Senior Subordinate Certificates will be deemed to have represented that:        

the rating condition was satisfied at the time of purchase; or

the following condition is satisfied:                         

it is an insurance company;                             

          the source of funds used to acquire or hold the certificates is an
      'insurance company general account' as that term is defined in
PTCE 95-60; and                                         

    the conditions in Sections I and III of PTCE 95-60 have been
satisfied.                                              

  The pooling and servicing agreement will require that if neither condition
is satisfied the Plan, or other purchaser acting on its behalf or with Plan     
Assets, will:                                                                   

   indemnify and hold harmless Washington Mutual Mortgage Securities
         Corp., the trustee, the master servicer, the underwriters and the Trust
         from and against all liabilities, claims, costs or expenses incurred by
them as a result of the purchase; and                         

     be disregarded as purchaser and the immediately preceding permitted
  beneficial owner will be treated as the beneficial owner of that
certificate.                                                  

Any fiduciary or other investor of Plan Assets that proposes to own the 
offered certificates on behalf of or with Plan Assets of any Plan should consult
with legal counsel about: (i) whether the specific and general conditions and   
the other requirements in the Underwriter's Exemption would be satisfied, or    
whether any other prohibited transaction exemption would apply, and (ii) the    
application of the general fiduciary responsibility provisions of ERISA and the 
prohibited transaction provisions of ERISA and                                  

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Section 4975 of the Internal Revenue Code to the proposed investment. See 'ERISA
Considerations' in the prospectus.                                              

ERISA CONSIDERATIONS WITH RESPECT TO THE SWAP AGREEMENT                         

   The swap feature related to each of the Class A Certificates under the Swap
Agreement is not eligible for the exemptive relief available under the          
Underwriter's Exemption. The transactions under the Swap Agreement are likely to
be characterized under ERISA and Section 4975 of the Code as principal          
transactions between the owner of a Class A Certificate and the Swap            
Counterparty, the party who has the contractual obligation to pay to the Auction
Administrator the excess, if any, of the Par Price over the Auction Price for   
each class of Class A Certificates, and the contractual right to receive the    
excess, if any, of the Auction Price over the Par Price for each class of       
Class A Certificates. Therefore, the purchase of a Class A Certificate before   
the Auction Distribution Date by a Plan under certain circumstances could be    
characterized as, or result in, a prohibited transaction under ERISA and        
Section 4975 of the Code between a Plan which holds the Class A Certificate and 
the Swap Counterparty (if it is a Party in Interest with respect to the Plan, as
defined in the prospectus), unless an exemption is available.                   

    Accordingly, no Plan or other person using Plan Assets may acquire or hold a
Class A Certificate before the Auction Distribution Date unless such acquisition
or holding is eligible for the exemptive relief available under Department of   
Labor Prohibited Transaction Class Exemption 84-14 (for transactions by         
independent 'qualified professional asset managers'), 91-38 (for transactions by
bank collective investment funds), 90-1 (for transactions by insurance company  
pooled separate accounts), 95-60 (for transactions by insurance company general 
accounts) or 96-23 (for transactions effected by 'in-house asset managers').    
Plan fiduciaries should consult their legal counsel concerning these issues.    
Each beneficial owner of a Class A Certificate, or any interest therein, shall  
be deemed to have represented, by virtue of its acquisition or holding of that  
certificate, or interest therein, that either (i) it is not a Plan or person    
using Plan Assets or (ii) the acquisition and holding of that certificate are   
eligible for the exemptive relief available under one of the five Prohibited    
Transaction Class Exemptions described immediately above.                       

   If any Class A Certificate, or any interest therein, is acquired or held in
violation of the provisions of the preceding paragraph, the next preceding      
permitted beneficial owner will be treated as the beneficial owner of that      
certificate, retroactive to the date of transfer to the purported beneficial    
owner. Any purported beneficial owner whose acquisition or holding of any such  
certificate, or interest therein, was effected in violation of the provisions of
the preceding paragraph shall indemnify and hold harmless Washington Mutual     
Mortgage Securities Corp., the trustee, the master servicer and the Trust from  
and against any and all liabilities, claims, costs or expenses incurred by such 
parties as a result of such acquisition or holding.                             

    Washington Mutual Mortgage Securities Corp. makes no representation that the
sale of any of the offered certificates to a Plan or other purchaser acting on  
its behalf meets any relevant legal requirement for investments by Plans        
generally or any particular Plan, or that the investment is appropriate for     
Plans generally or any particular Plan.                                         

METHOD OF DISTRIBUTION

Washington Mutual Mortgage Securities Corp. has agreed to sell to the   
underwriters, and the underwriters have agreed to purchase, all of the offered  
certificates (other than the 0.01% percentage interest of the Class R           
Certificates that Washington Mutual Mortgage Securities Corp. will retain) in   
the principal amounts set forth below.                                          

                                                        [Enlarge/Download Table]

                       CLASS A-1     CLASS A-2     CLASS A-3     CLASS A-4     CLASS B-1     CLASS B-2     CLASS B-3  
     UNDERWRITER      CERTIFICATES  CERTIFICATES  CERTIFICATES  CERTIFICATES  CERTIFICATES  CERTIFICATES  CERTIFICATES
     -----------      ------------  ------------  ------------  ------------  ------------  ------------  ------------
                                                                                                                      
Greenwich Capital                                                                                                     
 Markets, Inc........ $277,200,000  $93,600,000   $100,908,900  $147,375,000   $9,242,000    $6,043,000    $3,554,000 
Keefe, Bruyette &                                                                                                     
 Woods, Inc.......... $ 15,400,000  $ 5,200,000   $  5,606,050  $  8,187,500      --            --            --      
Sandler O'Neill &                                                                                                     
 Partners, L.P....... $ 15,400,000  $ 5,200,000   $  5,606,050  $  8,187,500      --            --            --      

An underwriting agreement between Washington Mutual Mortgage Securities 
Corp. and the underwriters governs the sale of the offered certificates. The    
aggregate proceeds (excluding accrued                                           

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interest) to Washington Mutual Mortgage Securities Corp. from the sale of the   
offered certificates, before deducting expenses estimated to be $525,000, will  
be approximately 99.78% of the initial aggregate principal balance of the       
offered certificates. Under the underwriting agreement, the underwriters have   
agreed to take and pay for all of the offered certificates, if any are taken.   
The underwriters will distribute the offered certificates from time to time in  
negotiated transactions or otherwise at varying prices to be determined at the  
time of sale. The difference between the purchase price for the offered         
certificates paid to Washington Mutual Mortgage Securities Corp. and the        
proceeds from the sale of the offered certificates realized by the underwriters 
will constitute underwriting discounts and commissions.                         

Washington Mutual Mortgage Securities Corp. has agreed to indemnify the 
underwriters against certain civil liabilities, including liabilities under the 
Securities Act of 1933.                                                         

LEGAL MATTERS 

 Washington Mutual Mortgage Securities Corp.'s counsel, Thomas G. Lehmann,
and its special counsel, Orrick, Herrington & Sutcliffe LLP, San Francisco,     
California, will deliver legal opinions required by the underwriting agreement. 
Sidley Austin Brown & Wood LLP, New York, New York, will pass upon certain legal
matters on behalf of the underwriters.                                          

CERTIFICATE RATINGS 

It is a condition to the issuance of the offered certificates that they 
receive the ratings from S&P and Moody's indicated:                             

                                                                [Download Table]

                              RATING AGENCY 
                              --------------
CLASS                         S&P   MOODY'S 
-----                         ---   ------- 
                                            
A-1.........................  AAA     Aaa   
A-2.........................  AAA     Aaa   
A-3.........................  AAA     Aaa   
A-4.........................  AAA     Aaa   

                              RATING AGENCY 
                              --------------
CLASS                         S&P   MOODY'S 
-----                         ---   ------- 
                                            
B-1.........................  AA      Aa2   
B-2.........................   A       A2   
B-3.........................  BBB     Baa2  
R...........................  AAA     Aaa   

 A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning rating
agency. Each security rating should be evaluated independently of any other     
security rating.                                                                

The ratings assigned to this issue do not constitute a recommendation to
purchase or sell these securities. Rather, they are an indication of the        
likelihood of the payment of principal and interest as set forth in the         
transaction documentation. The ratings do not address the effect on the         
certificates' yield attributable to prepayments or recoveries on the underlying 
mortgage loans. Additionally, the ratings on the Class R Certificates address   
only the return of the Class R Principal Balance and interest on that balance at
the stated rate.                                                                

The ratings on the offered certificates address the likelihood of the   
receipt by certificateholders of all distributions with respect to the          
underlying mortgage loans to which they are entitled. The ratings do not        
represent any assessment of the likelihood that the rate of principal           
prepayments by mortgagors might differ from those originally anticipated. As a  
result of differences in the rate of principal prepayments, certificateholders  
might suffer a lower than anticipated yield to maturity. See 'Risk Factors' and 
'Yield and Prepayment Considerations' in this prospectus supplement.            

 Washington Mutual Mortgage Securities Corp. has not requested a rating on
the offered certificates by any rating agency other than S&P and Moody's.       
However, there can be no assurance as to whether any other rating agency will   
rate the offered certificates, or, if it does, what rating would be assigned by 
any other rating agency. A rating on the offered certificates by another rating 
agency, if assigned at all, may be lower than the rating assigned to the offered
certificates by S&P or Moody's.                                                 

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                                                                   APPENDIX A'D'

PERCENT OF INITIAL CLASS PRINCIPAL BALANCE OUTSTANDING
AT VARIOUS PERCENTAGES OF THE CONSTANT PREPAYMENT ASSUMPTION

                                                        [Enlarge/Download Table]

                                     CLASS A-1                          CLASS A-2              
DISTRIBUTION              --------------------------------   --------------------------------  
DATE                       5%    15%    25%    35%    45%     5%    15%    25%    35%    45%   
----                       --    ---    ---    ---    ---     --    ---    ---    ---    ---   
                                                                                               
Initial Percentage......   100    100    100    100    100    100    100    100    100    100  
November 25, 2002.......    87     64     41     18      0    100    100    100    100     87  
November 25, 2003.......    75     34      0      0      0    100    100     93      0      0  
November 25, 2004.......    64      9      0      0      0    100    100      0      0      0  
November 25, 2005.......    53      0      0      0      0    100     61      0      0      0  
November 25, 2006.......     0      0      0      0      0      0      0      0      0      0  
Weighted Average Life to                                                                       
 Auction Distribution                                                                          
 Date (Years)(1)........  3.49   1.60   0.95   0.66   0.50   4.86   4.27   2.50   1.70   1.25  


                                      CLASS A-3                           CLASS A-4            
DISTRIBUTION              ----------------------------------   --------------------------------
DATE                        5%     15%    25%    35%    45%     5%    15%    25%    35%    45% 
----                        --     ---    ---    ---    ---     --    ---    ---    ---    --- 
                                                                                               
Initial Percentage......     100    100    100    100    100    100    100    100    100    100
November 25, 2002.......     100    100    100    100    100    100    100    100    100    100
November 25, 2003.......     100    100    100    100     28    100    100    100    100    100
November 25, 2004.......     100    100     98     10      0    100    100    100    100     63
November 25, 2005.......     100    100     36      0      0    100    100    100     69     34
November 25, 2006.......       0      0      0      0      0      0      0      0      0      0
Weighted Average Life to                                                                       
 Auction Distribution                                                                          
 Date (Years)(1)........    4.86   4.86   3.86   2.60   1.90   4.86   4.86   4.86   4.40   3.62

---------                                                                       

'D' The following tables have been prepared based on the assumptions described  
 in this prospectus supplement under 'Yield and Prepayment Considerations'
   (including the assumptions regarding the characteristics and performance of
the mortgage loans which differ from their actual characteristics and   
performance) and should be read in conjunction with that section.       

(1) The weighted average life of any class of certificates is determined by (i) 
 multiplying the assumed net reduction, if any, in the principal amount on
   each Distribution Date on such class of certificates by the number of years
from the date of issuance of the certificate to the related Distribution
   Date, (ii) summing the results, and (iii) dividing the sum by the aggregate
 amount of the assumed net reductions in principal amount on such class of
certificates.                                                           

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PERCENT OF INITIAL CLASS PRINCIPAL BALANCE OUTSTANDING
AT VARIOUS PERCENTAGES OF THE CONSTANT PREPAYMENT ASSUMPTION

                                                                [Download Table]

                                           CLASS B-1, CLASS B-2                   
                                               AND CLASS B-3                      
                         ---------------------------------------------------------
DISTRIBUTION DATE         5%           15%          25%          35%          45% 
-----------------         --           ---          ---          ---          --- 
                                                                                  
Initial Percentage......   100          100          100          100          100
November 25, 2002.......   100          100          100          100          100
November 25, 2003.......   100          100          100           93           78
November 25, 2004.......   100          100           91           74           56
November 25, 2005.......   100          100           68           48           31
November 25, 2006.......   100           87           50           31           17
November 25, 2007.......   100           72           37           19            9
November 25, 2008.......   100           60           27           12            5
November 25, 2009.......    96           50           20            8            3
November 25, 2010.......    92           41           14            5            1
November 25, 2011.......    86           34           11            3            1
November 25, 2012.......    80           28            8            2            0
November 25, 2013.......    74           23            6            1            0
November 25, 2014.......    68           19            4            1            0
November 25, 2015.......    62           15            3            0            0
November 25, 2016.......    56           13            2            0            0
November 25, 2017.......    51           10            1            0            0
November 25, 2018.......    46            8            1            0            0
November 25, 2019.......    41            7            1            0            0
November 25, 2020.......    36            5            1            0            0
November 25, 2021.......    32            4            0            0            0
November 25, 2022.......    28            3            0            0            0
November 25, 2023.......    24            2            0            0            0
November 25, 2024.......    21            2            0            0            0
November 25, 2025.......    17            1            0            0            0
November 25, 2026.......     0            0            0            0            0
November 25, 2027.......    11            1            0            0            0
November 25, 2028.......     8            0            0            0            0
November 25, 2029.......     5            0            0            0            0
November 25, 2030.......     2            0            0            0            0
November 25, 2031.......     0            0            0            0            0
Weighted Average Life                                                             
 (Years)(1)............. 17.06         9.44         6.02         4.55         3.58

---------                                                                       

'D' The following tables have been prepared based on the assumptions described  
 in this prospectus supplement under 'Yield and Prepayment Considerations'
   (including the assumptions regarding the characteristics and performance of
the mortgage loans which differ from their actual characteristics and   
performance) and should be read in conjunction with that section.       

(1) The weighted average life of any class of certificates is determined by (i) 
 multiplying the assumed net reduction, if any, in the principal amount on
   each Distribution Date on such class of certificates by the number of years
from the date of issuance of the certificate to the related Distribution
   Date, (ii) summing the results, and (iii) dividing the sum by the aggregate
 amount of the assumed net reductions in principal amount on such class of
certificates.                                                           

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                                                                      APPENDIX B

                                                                [Download Table]

            MORTGAGE INTEREST RATES OF THE MORTGAGE LOANS            
---------------------------------------------------------------------
                                        AGGREGATE       PERCENTAGE   
                                        PRINCIPAL         OF THE     
                                     BALANCE OF THE     AGGREGATE    
                         NUMBER OF      MORTGAGE         PRINCIPAL   
   MORTGAGE INTEREST     MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
       RATE (%)           LOANS       CUT-OFF DATE     MORTGAGE LOANS
---------------------------------------------------------------------
                                                                     
5.750..................        2     $  2,092,001.00         0.29%   
5.875..................        2        2,200,000.00         0.31    
6.000..................        8        4,846,624.21         0.68    
6.125..................       12        9,150,124.61         1.29    
6.250..................       27       17,786,031.64         2.50    
6.375..................       95       74,388,112.73        10.46    
6.500..................      259      172,037,358.48        24.20    
6.625..................      486      255,267,382.32        35.90    
6.750..................      229      109,148,130.78        15.35    
6.875..................       85       42,403,467.68         5.96    
7.000..................       20        9,290,580.50         1.31    
7.125..................       16        7,166,583.17         1.01    
7.250..................        7        3,198,536.05         0.45    
7.500..................        3        1,723,628.44         0.24    
8.250..................        1          279,949.09         0.04    
                           -----     ---------------       ------    
  Total................    1,252     $710,978,510.70       100.00%   
                           -----     ---------------       ------    
                           -----     ---------------       ------    

                                                                [Download Table]

               PASS-THROUGH RATES OF THE MORTGAGE LOANS               
----------------------------------------------------------------------
                                 AGGREGATE                  WEIGHTED  
                                 PRINCIPAL      WEIGHTED    AVERAGE   
                              BALANCE OF THE    AVERAGE    SCHEDULED  
          RANGE OF               MORTGAGE       MORTGAGE   REMAINING  
        PASS-THROUGH          LOANS AS OF THE   INTEREST     TERM     
         RATES (%)             CUT-OFF DATE      RATES    (IN MONTHS) 
----------------------------------------------------------------------
                                                                      
4.751 - 5.000...............  $  2,092,001.00    5.750%        359    
5.001 - 5.250...............     7,046,624.21    5.961         359    
5.251 - 5.500...............    26,936,156.25    6.208         359    
5.501 - 5.750...............   246,425,471.21    6.462         359    
5.751 - 6.000...............   364,415,513.10    6.662         359    
6.001 - 6.250...............    51,694,048.18    6.897         359    
6.251 - 6.500...............    10,365,119.22    7.164         358    
6.501 - 6.750...............     1,723,628.44    7.500         358    
7.251 - 7.500...............       279,949.09    8.250         340    
                              ---------------    -----         ---    
                              $710,978,510.70    6.593%*       359*   
                              ---------------                         
                              ---------------                         

* Represents a weighted average of all the mortgage loans.                      

    As of the Cut-Off Date, the Pass-Through Rates for the mortgage loans ranged
from approximately 4.950% per annum to 7.450% per annum, with a weighted average
of approximately 5.793% per annum.                                              

                                                                [Download Table]

           ORIGINAL PRINCIPAL BALANCES OF THE MORTGAGE LOANS            
------------------------------------------------------------------------
                                           AGGREGATE        PERCENTAGE  
                                           PRINCIPAL         OF THE     
                                        BALANCE OF THE      AGGREGATE   
                            NUMBER OF      MORTGAGE         PRINCIPAL   
    RANGE OF ORIGINAL       MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
    PRINCIPAL BALANCES       LOANS       CUT-OFF DATE     MORTGAGE LOANS
------------------------------------------------------------------------
                                                                        
$250,001 - 300,000........       56     $ 16,326,878.73         2.30%   
$300,001 - 350,000........      197       64,317,655.59         9.05    
$350,001 - 400,000........      201       76,068,146.04        10.70    
$400,001 - 450,000........      135       57,830,381.34         8.13    
$450,001 - 500,000........      122       58,278,862.10         8.20    
Over $500,000.............      541      438,156,586.90        61.63    
                              -----     ---------------       ------    
  Total...................    1,252     $710,978,510.70       100.00%   
                              -----     ---------------       ------    
                              -----     ---------------       ------    

   As of the Cut-Off Date, the principal balances of the mortgage loans ranged
from approximately $199,086 to $1,500,000 with an average of approximately      
$567,874.                                                                       

                                                                [Download Table]

           CURRENT LOAN-TO-VALUE RATIOS OF THE MORTGAGE LOANS           
------------------------------------------------------------------------
                                           AGGREGATE       PERCENTAGE   
                                           PRINCIPAL         OF THE     
                                        BALANCE OF THE      AGGREGATE   
                            NUMBER OF      MORTGAGE         PRINCIPAL   
  CURRENT LOAN-TO-VALUE     MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
        RATIO (%)            LOANS       CUT-OFF DATE     MORTGAGE LOANS
------------------------------------------------------------------------
                                                                        
60.00 or less.............      312     $211,477,350.36        29.74%   
60.01 - 70.00.............      290      185,767,771.35        26.13    
70.01 - 75.00.............      251      133,510,984.03        18.78    
75.01 - 80.00.............      360      165,956,113.76        23.34    
80.01 - 85.00.............        9        3,460,018.33         0.49    
85.01 - 90.00.............       23        8,340,058.46         1.17    
90.01 - 95.00.............        7        2,466,214.41         0.35    
                              -----     ---------------       ------    
  Total...................    1,252     $710,978,510.70       100.00%   
                              -----     ---------------       ------    
                              -----     ---------------       ------    

At origination, the weighted average loan-to-value ratio of the mortgage
loans was approximately 65.2%. As of the Cut-Off Date, the weighted average     
loan-to-value ratio of the mortgage loans was approximately 65.2%.              

                                                                [Download Table]

      TYPES OF MORTGAGED PROPERTIES SECURING OF THE MORTGAGE LOANS      
------------------------------------------------------------------------
                                           AGGREGATE       PERCENTAGE   
                                           PRINCIPAL         OF THE     
                                        BALANCE OF THE      AGGREGATE   
                            NUMBER OF      MORTGAGE         PRINCIPAL   
                            MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
      PROPERTY TYPES         LOANS       CUT-OFF DATE     MORTGAGE LOANS
------------------------------------------------------------------------
                                                                        
Single Family Detached....    1,167     $670,811,787.90        94.35%   
Duplex....................        1          357,526.49         0.05    
Triplex...................        1          490,805.91         0.07    
Condominium...............       81       38,138,951.29         5.36    
Housing Cooperatives......        2        1,179,439.11         0.17    
                              -----     ---------------       ------    
  Total...................    1,252     $710,978,510.70       100.00%   
                              -----     ---------------       ------    
                              -----     ---------------       ------    

  The cooperative buildings relating to the Cooperative Loans are located in
the States of New York and California.                                          

                                                                [Download Table]

        GEOGRAPHIC DISTRIBUTION BY STATE OF THE MORTGAGE LOANS         
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
          STATE             LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
Arizona..................       23     $ 11,790,344.35         1.66%   
California...............      734      449,649,762.78        63.24    
Colorado.................       35       18,646,296.36         2.62    
Connecticut..............       39       24,095,701.66         3.39    
District of Columbia.....        2          768,647.09         0.11    
Florida..................       14        5,878,811.10         0.83    
Georgia..................        2          634,697.15         0.09    
Illinois.................      100       48,920,030.77         6.88    
Kentucky.................        3          967,402.62         0.14    
Maryland.................        5        2,092,586.82         0.29    
Massachusetts............       68       33,318,956.39         4.69    
Michigan.................       13        6,760,751.49         0.95    
Minnesota................        5        2,217,921.73         0.31    
Missouri.................        5        3,101,239.87         0.44    
Nevada...................       11        6,290,943.44         0.88    
New Jersey...............       27       13,658,156.86         1.92    
New York.................       11        6,922,139.14         0.97    
North Carolina...........        8        4,776,216.67         0.67    
Ohio.....................       14        6,788,434.89         0.95    
Oregon...................        9        3,809,908.12         0.54    
Pennsylvania.............       11        5,874,492.35         0.83    
Rhode Island.............        2        1,094,573.82         0.15    
Texas....................       10        4,379,771.82         0.62    
Utah.....................       13        5,720,477.09         0.80    
Virginia.................        7        3,051,436.16         0.43    
Washington...............       80       39,409,810.16         5.54    
Wisconsin................        1          359,000.00         0.05    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

No more than approximately 2.0% of the mortgage loans will be secured by
mortgaged properties in any one California zip code area, and no more than      
approximately 1.9% of the mortgage loans will be secured by mortgaged properties
in any single zip code area outside of California.                              

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                                                                [Download Table]

               INTEREST RATE FLOOR OF THE MORTGAGE LOANS               
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
 INTEREST RATE FLOOR (%)    LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
2.600....................        4     $  2,779,966.67         0.39%   
2.750....................    1,244      705,611,506.29        99.25    
2.890....................        1        1,284,375.00         0.18    
3.250....................        1          385,948.68         0.05    
3.450....................        1          599,993.75         0.08    
3.500....................        1          316,720.31         0.04    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

                                                                [Download Table]

            SCHEDULED MATURITY YEARS OF THE MORTGAGE LOANS             
-----------------------------------------------------------------------
                                          AGGREGATE        PERCENTAGE  
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
    YEAR OF MATURITY        LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
2030.....................        1     $    279,949.09         0.04%   
2031.....................    1,251      710,698,561.61        99.96    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

The weighted average remaining term (adjusted for Curtailments) of the  
mortgage loans as of the Cut-Off Date is approximately 358.9 months.            

    The latest scheduled maturity of any of the mortgage loans is November 2031.

                                                                [Download Table]

           DOCUMENTATION PROGRAM TYPES OF THE MORTGAGE LOANS           
-----------------------------------------------------------------------
                                          AGGREGATE        PERCENTAGE  
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
   LOAN DOCUMENTATION      MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
      PROGRAM TYPE          LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
Full Documentation.......      948     $494,785,636.22        69.59%   
Reduced Documentation....      304      216,192,874.48        30.41    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

As of the Cut-Off Date, the weighted average loan-to-value ratio of the 
mortgage loans originated under a reduced documentation program was             
approximately 60.6%.                                                            

                                                                [Download Table]

                     PURPOSE OF THE MORTGAGE LOANS                     
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
     PURPOSE OF LOAN        LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
Purchase Loans...........      310     $155,012,227.31        21.80%   
Rate/Term Refinances.....      601      352,963,422.33        49.64    
Cash Out Refinances......      341      203,002,861.06        28.55    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

                                                                [Download Table]

        YEARS OF INITIAL MONTHLY PAYMENTS OF THE MORTGAGE LOANS         
------------------------------------------------------------------------
                                           AGGREGATE       PERCENTAGE   
                                           PRINCIPAL         OF THE     
                                        BALANCE OF THE      AGGREGATE   
                            NUMBER OF      MORTGAGE         PRINCIPAL   
       YEAR INITIAL         MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
     MONTHLY PAYMENT         LOANS       CUT-OFF DATE     MORTGAGE LOANS
------------------------------------------------------------------------
                                                                        
2000......................        1     $    279,949.09         0.04%   
2001......................    1,251      710,698,561.61        99.96    
                              -----     ---------------       ------    
  Total...................    1,252     $710,978,510.70       100.00%   
                              -----     ---------------       ------    
                              -----     ---------------       ------    

                                                                [Download Table]

                OCCUPANCY STATUS OF THE MORTGAGE LOANS                 
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
    OCCUPANCY STATUS        LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
Owner Occupied...........    1,198     $680,151,090.53        95.66%   
Owner Occupied -- 2nd                                                  
 Home....................       49       28,808,472.88         4.05    
Non-Owner Occupied.......        5        2,018,947.29         0.28    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

                                                                [Download Table]

           CREDIT SCORES DISTRIBUTION OF THE MORTGAGE LOANS            
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE        PRINCIPAL    
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
      CREDIT SCORE          LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
620 - 639................       30     $ 15,146,050.74         2.13%   
640 - 659................       39       19,493,802.16         2.74    
660 - 679................       87       43,278,656.14         6.09    
680 - 699................      122       63,903,391.75         8.99    
700 - 719................      160       87,345,900.26        12.29    
720 - 739................      245      139,420,123.77        19.61    
740 - 759................      246      150,271,005.57        21.14    
760 - 779................      211      131,906,593.30        18.55    
780 - 799................       97       53,390,100.59         7.51    
800 or greater...........       12        5,599,843.05         0.79    
No Credit Score                                                        
 Available*..............        3        1,223,043.37         0.17    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

* May include foreign nationals and borrowers with insufficient credit history. 

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                                                                [Download Table]

                     MARGINS OF THE MORTGAGE LOANS                     
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
       MARGIN (%)           LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
2.600....................        4     $  2,779,966.67         0.39%   
2.750....................    1,244      705,611,506.29        99.25    
2.890....................        1        1,284,375.00         0.18    
3.250....................        1          385,948.68         0.05    
3.450....................        1          599,993.75         0.08    
3.500....................        1          316,720.31         0.04    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

                                                                [Download Table]

       FIRST INTEREST RATE ADJUSTMENT DATE OF THE MORTGAGE LOANS       
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
       MONTH/YEAR           LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
03/2005..................        1     $    279,949.09         0.04%   
07/2006..................        2          859,941.60         0.12    
08/2006..................       21       11,834,422.99         1.66    
09/2006..................       36       20,182,968.98         2.84    
10/2006..................    1,015      569,846,429.04        80.15    
11/2006..................      177      107,974,799.00        15.19    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

                                                                [Download Table]

                 ORIGINAL TERMS OF THE MORTGAGE LOANS                  
-----------------------------------------------------------------------
                                          AGGREGATE        PERCENTAGE  
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
        LOAN TERM          MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
       (IN MONTHS)          LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
360......................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

                                                                [Download Table]

           NUMBER OF THE MORTGAGE LOANS TO THE SAME MORTGAGOR           
------------------------------------------------------------------------
                           NUMBER OF                                    
                           MORTGAGORS      AGGREGATE       PERCENTAGE   
                           OBLIGATED       PRINCIPAL         OF THE     
                           ON THAT      BALANCE OF THE      AGGREGATE   
        NUMBER OF          NUMBER OF       MORTGAGE         PRINCIPAL   
     MORTGAGE LOANS        MORTGAGE     LOANS AS OF THE   BALANCE OF ALL
      PER MORTGAGOR         LOANS        CUT-OFF DATE     MORTGAGE LOANS
------------------------------------------------------------------------
                                                                        
1........................    1,244      $705,328,402.21        99.21%   
2........................        4         5,650,108.49         0.79    
                             -----      ---------------       ------    
  Total..................    1,248      $710,978,510.70       100.00%   
                             -----      ---------------       ------    
                             -----      ---------------       ------    

The maximum aggregate principal balance of multiple mortgage loans as to
which any single mortgagor is obligated is approximately $1,892,000 as of the   
Cut-Off Date.                                                                   

                                                                [Download Table]

              INTEREST RATE CEILING OF THE MORTGAGE LOANS              
-----------------------------------------------------------------------
                                          AGGREGATE       PERCENTAGE   
                                          PRINCIPAL         OF THE     
                                       BALANCE OF THE      AGGREGATE   
                           NUMBER OF      MORTGAGE         PRINCIPAL   
                           MORTGAGE    LOANS AS OF THE   BALANCE OF ALL
     CEILING RATE(%)        LOANS       CUT-OFF DATE     MORTGAGE LOANS
-----------------------------------------------------------------------
                                                                       
10.750...................        3     $  2,692,001.00         0.38%   
10.875...................        2        2,200,000.00         0.31    
11.000...................        7        2,571,194.81         0.36    
11.125...................       12        9,150,124.61         1.29    
11.250...................       23       14,616,931.64         2.06    
11.375...................       92       73,036,252.09        10.27    
11.393...................        1          760,000.00         0.11    
11.500...................      245      163,357,031.95        22.98    
11.625...................      476      252,899,634.31        35.57    
11.630...................        1          356,987.50         0.05    
11.750...................      225      107,753,413.91        15.16    
11.875...................       86       42,798,119.18         6.02    
11.950...................       10        7,135,419.17         1.00    
12.000...................       21        9,674,241.71         1.36    
12.125...................       16        7,166,583.17         1.01    
12.250...................        6        2,812,587.37         0.40    
12.375...................        2        1,148,630.45         0.16    
12.500...................        9        4,027,565.20         0.57    
12.625...................       10        4,973,723.54         0.70    
12.750...................        3        1,100,532.91         0.15    
12.875...................        1          467,587.09         0.07    
13.250...................        1          279,949.09         0.04    
                             -----     ---------------       ------    
  Total..................    1,252     $710,978,510.70       100.00%   
                             -----     ---------------       ------    
                             -----     ---------------       ------    

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INDEX OF TERMS

Below is a list of selected significant terms used in this prospectus   
supplement and the pages on which their definitions can be found.               

                                                                [Download Table]

                                         PAGE
                                         ----
                                             
Adjusted Senior Percentage............   S-26
Adjustment Date.......................   S-17
Auction Administrator.................   S-31
Auction Distribution Date.............   S-31
Auction Price.........................   S-31
Available Distribution Amount.........   S-30
Bankruptcy Coverage...................   S-29
Certificate Principal Balance.........   S-20
Class Principal Balance...............   S-20
Closing Date..........................   S-20
CPR...................................   S-36
Credit Support Depletion Date.........   S-24
Curtailments..........................   S-25
Cut-Off Date..........................   S-16
Distribution Date.....................   S-23
Due Date..............................   S-17
Fraud Coverage........................   S-29
Interest Only Loans...................   S-17
Liquidated Mortgage Loan..............   S-25
Liquidation Principal.................   S-25
Margin................................   S-17
Modeling Assumptions..................   S-37
Par Price.............................   S-31
Pass-Through Rate.....................   S-24
Payoffs...............................   S-25
Periodic Cap..........................   S-17
Prepayment Period.....................   S-25
Principal Payment Amount..............   S-25
Principal Prepayment Amount...........   S-25
Pro Rata Allocation...................   S-28
Rate Ceiling..........................   S-17
Rate Floor............................   S-17
Relief Act............................   S-15
Senior Percentage.....................   S-26
Senior Prepayment Percentage..........   S-27
Senior Principal Distribution                
  Amount..............................   S-26
Special Hazard Coverage...............   S-29
Stated Principal Balance..............   S-25
Subordinate Percentage................   S-26
Subordinate Principal Distribution           
  Amount..............................   S-26
Subordinate Principal Prepayments            
  Distribution Amount.................   S-26
Subordination Level...................   S-23
Swap Counterparty.....................   S-31
Trust.................................   S-16
Weighted Average Pass-Through Rate....    S-4

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PROSPECTUS                                                                      
WASHINGTON MUTUAL MORTGAGE
SECURITIES CORP.
DEPOSITOR AND MASTER SERVICER 

MORTGAGE PASS-THROUGH CERTIFICATES

CONSIDER CAREFULLY THE RISK FACTORS BEGINNING                               
ON PAGE 5 IN THIS PROSPECTUS.                                               

A certificate will represent an interest only in the trust created for that 
series of certificates. A certificate will not represent an interest in or  
an obligation of Washington Mutual Mortgage Securities Corp., Washington    
Mutual, Inc. or any of their affiliates.                                    

This prospectus may be used to offer and sell a series of certificates only 
if accompanied by the prospectus supplement for that series.                

                 WASHINGTON MUTUAL MORTGAGE SECURITIES CORP. MAY
                        PERIODICALLY ISSUE CERTIFICATES REPRESENTING INTERESTS
                       IN A TRUST THAT CONSISTS PRIMARILY OF MORTGAGE LOANS.
                     THE CERTIFICATES WILL BE ISSUED IN SERIES, AND EACH
                      SERIES OF CERTIFICATES WILL REPRESENT INTERESTS IN A
                  DIFFERENT TRUST ESTABLISHED BY WASHINGTON MUTUAL
MORTGAGE SECURITIES CORP.     

EACH TRUST WILL CONSIST OF:   

                   a pool of mortgage loans secured by residential
                         properties, which may include cooperative apartments,
                      described in detail in the accompanying prospectus
supplement.                 

       related property and interests; and

                   other property as described in the accompanying
prospectus supplement.      

THE CERTIFICATES IN A SERIES: 

                       will represent interest in a trust and will be paid
           only from the assets of that trust; and

                         may be divided into multiple classes of certificates,
and, if so, each class may: 

                     receive a different fixed or variable rate of
interest;               

                           be subordinated to other classes of certificates in
that series;            

                            represent interests in only certain of the assets of
the trust;              

                 receive principal at different times; and

                   have different forms of credit enhancement.

The certificates may be offered to the public through different methods as      
described in 'Methods of Distribution' in this prospectus.                      

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED 
OF THESE CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR         
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.             

October 5, 2001 

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IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT 

We provide information to you about the certificates in two separate    
documents that progressively provide more detail: (a) this prospectus, which    
provides general information, some of which may not apply to your series of     
certificates and (b) the accompanying prospectus supplement, which describes the
specific terms of your series of certificates.                                  

IF THE TERMS OF A PARTICULAR SERIES OF CERTIFICATES VARY BETWEEN THIS   
PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE   
INFORMATION IN THE PROSPECTUS SUPPLEMENT.                                       

   You should rely only on the information provided in this prospectus and the
accompanying prospectus supplement, including the information incorporated by   
reference. We have not authorized anyone to provide you with different          
information. We are not offering the certificates in any state where the offer  
is not permitted. We do not claim the accuracy of the information in this       
prospectus or the accompanying prospectus supplement as of any date other than  
the dates stated on their respective covers.                                    

We include cross-references in this prospectus and the accompanying     
prospectus supplement to captions in these materials where you can find further 
related discussions. The following Table of Contents and the Table of Contents  
included in the accompanying prospectus supplement provide the pages on which   
these captions are located.                                                     

You can find a listing of the pages where capitalized terms used in this
prospectus are defined under the caption 'Index of Terms' beginning on page 86. 

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TABLE OF CONTENTS 

                                                                [Download Table]

                                         PAGE
                                         ----
                                             
RISK FACTORS...........................    5 
THE MORTGAGE POOLS.....................    8 
    General............................    8 
    Conversion of Mortgage Loans.......   12 
USE OF PROCEEDS........................   12 
YIELD CONSIDERATIONS...................   13 
    General............................   13 
    Effective Interest Rate............   13 
MATURITY, AVERAGE LIFE AND PREPAYMENT        
  ASSUMPTIONS..........................   15 
    Redemption of Certificates or            
      Underlying Mortgage Loans........   16 
THE COMPANY............................   16 
    Mortgage Purchase Program..........   16 
    Loan Standards.....................   17 
    Credit, Appraisal and Underwriting       
      Standards........................   17 
    Seller Warranties and                    
      Indemnification of the Company...   18 
    Relationships with Affiliates......   19 
DESCRIPTION OF CERTIFICATES............   19 
    General............................   19 
    Assignment of Mortgage Loans.......   20 
    Substitution of Mortgage Loans.....   22 
    Representations and Warranties.....   22 
    Servicing..........................   23 
    Retained Yield.....................   25 
    Payments on Mortgage Loans;              
      Custodial Accounts for P&I,            
      Investment Account, Certificate        
      Account and Reserve Account......   25 
    Distributions on Certificates......   29 
    Reports to Certificateholders......   31 
    Advances...........................   32 
    Collection and Other Servicing           
      Procedures.......................   33 
    Servicing Compensation and Payment       
      of Expenses......................   34 
    Evidence as to Compliance..........   36 
    Certain Matters Regarding the            
      Master Servicer, the Servicer,         
      the Certificate Administrator and      
      the Company......................   36 
    Events of Default..................   37 
    Rights Upon Event of Default.......   38 
    Amendment..........................   38 
    List of Certificateholders.........   39 
    Termination........................   39 
    Redemption Agreement...............   40 
    Put Option.........................   40 
    The Trustee........................   40 
PRIMARY INSURANCE, FHA MORTGAGE              
  INSURANCE, VA MORTGAGE GUARANTY,           
  HAZARD INSURANCE; CLAIMS                   
  THEREUNDER...........................   41 
    Primary Insurance..................   41 
    FHA Mortgage Insurance.............   42 
    VA Mortgage Guaranty...............   43 
    Hazard Insurance...................   43 
DESCRIPTION OF CREDIT ENHANCEMENTS.....   45 
    Mortgage Pool Insurance............   46 
    Subordination......................   47 
    The Fraud Bond.....................   48 
    The Bankruptcy Bond................   49 
    Special Hazard Insurance...........   49 
    Letter of Credit...................   50 
    Reserve Fund.......................   50 
    Certificate Insurance Policies.....   51 
    Maintenance of Credit Enhancements;      
      Claims Thereunder and Other            
      Realization Upon Defaulted             
      Mortgage Loans...................   51 
CERTAIN LEGAL ASPECTS OF THE MORTGAGE        
  LOANS................................   54 
    Cooperative Loans..................   54 
    Tax Aspects of Cooperative               
      Ownership........................   55 
    Foreclosure........................   55 
    Foreclosure on Shares of                 
      Cooperatives.....................   56 
    Rights of Redemption...............   58 
    Anti-Deficiency Legislation and          
      Other Limitations on Lenders.....   58 
    Enforceability of Certain                
      Provisions.......................   59 
    Applicability of Usury Laws........   60 
    Alternative Mortgage Instruments...   60 
    Environmental Risks................   61 
ERISA CONSIDERATIONS...................   62 
    Plan Asset Regulation..............   62 
    Underwriter's Exemption............   63 
    Other Exemptions...................   65 
    Insurance Company General                
      Accounts.........................   65 
    Representations from Investing           
      Plans............................   65 
    Tax-Exempt Plan Investors..........   66 
    Consultation with Counsel..........   66 
CERTAIN FEDERAL INCOME TAX                   
  CONSEQUENCES.........................   67 
    Classification of REMIC Trust            
      Funds............................   67 
    Characterization of Investments in       
      REMIC Certificates...............   67 
    Taxation of Owners of REMIC Regular      
      Certificates.....................   68 
        Original Issue Discount........   68 

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                                                                [Download Table]

                                         PAGE
                                         ----
                                             
        Market Discount and Premium....   72 
        Realized Losses................   73 
        Callable Class Certificates....   74 
    Taxation of Owners of REMIC              
      Residual Certificates............   75 
        General........................   75 
        Taxable Income or Net Loss of        
          the REMIC Trust Fund.........   76 
        Basis Rules and                      
          Distributions................   76 
        Excess Inclusions..............   77 
        Noneconomic REMIC Residual           
          Certificates.................   78 
        Tax-Exempt Investors...........   78 
        Real Estate Investment               
          Trusts.......................   79 
        Mark-to-Market Rules...........   79 
    Sales of REMIC Certificates........   79 
    Pass-Through of Servicing Fees.....   80 
    Prohibited Transactions and Other        
      Possible REMIC Taxes.............   81 
    Termination of a REMIC Trust             
      Fund.............................   81 
    Reporting and Other Administrative       
      Matters of REMICs................   81 
    Backup Withholding with Respect to       
      REMIC Certificates...............   82 
    Foreign Investors in REMIC               
      Certificates.....................   82 
        REMIC Regular Certificates.....   82 
        REMIC Residual Certificates....   83 
    New Withholding Regulations........   83 
    State and Local Taxation...........   83 
    Call Right.........................   84 
METHODS OF DISTRIBUTION................   84 
TRANSFERABILITY OF CERTIFICATES........   84 
LEGAL MATTERS..........................   85 
FINANCIAL INFORMATION..................   85 
ADDITIONAL INFORMATION.................   85 
INDEX OF TERMS.........................   86 

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RISK FACTORS

YOU SHOULD CONSIDER THE FOLLOWING RISK FACTORS (IN ADDITION TO THE RISK 
FACTORS IN THE PROSPECTUS SUPPLEMENT) IN DECIDING WHETHER TO PURCHASE ANY OF THE
CERTIFICATES.                                                                   

                                                        [Enlarge/Download Table]
                                                                                                               
LACK OF SECONDARY MARKETS MAY LIMIT               A secondary market for the certificates of any series may    
YOUR ABILITY TO RESELL YOUR CERTIFICATES          not develop. If a secondary market does develop, it might    
                                                  not continue or it might not be sufficiently liquid to allow 
                                                  you to resell any of your certificates. An underwriter may   
                                                  decide to establish a secondary market for a particular      
                                                  series of certificates. If so, the prospectus supplement for 
                                                  that series of certificates will indicate this intention.    
                                                  However, no underwriter will be obligated to do so. The      
                                                  certificates will not be listed on any securities exchange.  

THERE IS NO SOURCE OF PAYMENTS FOR YOUR           When you buy a certificate, you will not own an interest in  
CERTIFICATES OTHER THAN PAYMENTS ON THE MORTGAGE  Washingtjon Mutual Mortgage Securities Corp., Washington     
LOANS IN THE TRUST                                Mutual, Inc. or any of their affiliates. You will own an     
                                                  interest in the Trust established for that series of         
                                                  certificates. Your payments come only from assets in the     
                                                  Trust. Therefore, the mortgagors' payments on the mortgage   
                                                  loans included in the Trust (and any credit enhancements)    
                                                  will be the sole source of payments to you. If those amounts 
                                                  are insufficient to make required payments of interest or    
                                                  principal to you, there is no other source of payments.      

                                                  Moreover, no governmental agency either guarantees or        
                                                  insures payments on the Certificates or any of the mortgage  
                                                  loans.                                                       

                                                  Washington Mutual Mortgage Securities Corp. and/or the       
                                                  Servicers will have limited obligations. These will usually  
                                                  include:                                                     

                                                   the obligation under certain circumstances to repurchase the
                                                   mortgage loans if there has been a breach of                
                                                   representations and warranties;                             

                                                   advancing payments on the mortgage loans when the mortgagor 
                                                   is delinquent if the applicable Master Servicer believes    
                                                   the advance is recoverable; and                             

                                                   various servicing and/or administrative obligations made in 
                                                   the Pooling Agreement and/or servicing contracts.           

YOU BEAR THE RISK OF CERTAIN MORTGAGOR DEFAULTS;  Because your certificates represent an interest in the       
CERTAIN OF THE MORTGAGE LOANS MAY BE ESPECIALLY   mortgage loans, your investment may be affected by a decline 
PRONE TO DEFAULTS                                 in real estate values and changes in individual mortgagor's  
                                                  financial conditions. Investors should be aware that value   
                                                  of the mortgaged properties may decline. If the outstanding  
                                                  balance of a mortgage loan and any secondary financing on    
                                                  the underlying property is greater than the value of the     
                                                  property, there is an increased risk of delinquency,         
                                                  foreclosure and losses. If the residential real estate       
                                                  market experiences an overall decline in property values,    
                                                  the rates of delinquencies, foreclosures and losses could be 
                                                  higher than those now generally experienced in the mortgage  
                                                  lending industry. To the extent your certificates are not    
                                                  covered by credit enhancements, you will bear all of the     
                                                  risks resulting from defaults by                             

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                                                        [Enlarge/Download Table]
                                                                                                   
                                               mortgagors. In addition, certain types of mortgage  
                                               loans which have higher than average rates of       
                                               default may be included in the Trust that issues    
                                               your certificate. The following types of loans may  
                                               be included:                                        

                                                mortgage loans that are subject to 'negative       
                                                amortization'. The principal balances of such      
                                                loans may be increased to amounts greater than the 
                                                value of the underlying property. This increases   
                                                the likelihood of default;                         

                                                mortgage loans that do not fully amortize over     
                                                their terms to maturity which are sometimes        
                                                referred to as balloon loans. Such loans require a 
                                                large payment at their stated maturity. These      
                                                loans involve a greater degree of risk because the 
                                                ability of a mortgagor to make this final payment  
                                                typically depends on the ability to refinance the  
                                                loan or sell the related mortgaged property;       

                                                mortgage loans that provide for escalating or      
                                                variable payments by the mortgagor. The mortgagor  
                                                may have qualified for such loans based on an      
                                                income level sufficient to make the initial        
                                                payments only. As the payments increase, the       
                                                likelihood of default will increase; and           

                                                mortgage loans that are concentrated in certain    
                                                regions, states or zip code areas of the United    
                                                States. Such geographic units may experience weak  
                                                economic conditions and housing markets. This may  
                                                cause higher rates of loss and delinquency.        

                                               See 'Description of the Mortgage Pools' in the      
                                               prospectus supplement to see if any of these or     
                                               other types of special risk loans are present in    
                                               the mortgage pool applicable to your certificates.  

CREDIT ENHANCEMENTS MAY BE LIMITED OR REDUCED  The prospectus supplement related to your           
AND THIS MAY CAUSE YOUR CERTIFICATES TO BEAR   certificates may specify that credit enhancements   
MORE RISK OF MORTGAGOR DEFAULTS                will provide some protection to cover certain       
                                               losses on the underlying mortgage loans. The forms  
                                               of credit enhancement include (but are not limited  
                                               to) the following: subordination of one or more     
                                               classes of certificates to other classes of         
                                               certificates in the same series; an insurance       
                                               policy on a particular class of certificates; a     
                                               letter of credit; a mortgage pool insurance policy; 
                                               a special hazard insurance policy; a fraud bond; a  
                                               bankruptcy bond; a reserve fund; or any combination 
                                               thereof. See 'Description of the Credit             
                                               Enhancements' herein. See also 'Credit              
                                               Enhancements' in the prospectus supplement in order 
                                               to see what forms of credit enhancements apply to   
                                               your certificates.                                  

                                               Regardless of the form of credit enhancement, an    
                                               investor should be aware that:                      
                                                The amount of coverage is usually limited;         
                                                The amount of coverage will usually be reduced over
                                                time according to a schedule or formula;           

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                                                   The particular form of credit enhancements may     
                                                   provide coverage only to certain types of losses on
                                                   the mortgage loans, and not to other types of      
                                                   losses;                                            

                                                   The particular form of credit enhancements may     
                                                   provide coverage only to certain certificates and  
                                                   not other certificates of the same series; and     

                                                   If the applicable rating agencies believe that the 
                                                   rating on the certificates will not be adversely   
                                                   affected, certain types of credit enhancements may 
                                                   be reduced or terminated.                          

IF THE RATE OF PREPAYMENTS ON THE MORTGAGE LOANS  The yield to maturity of your certificates will     
IS DIFFERENT THAN EXPECTED, YOUR YIELD MAY BE     depend primarily on the price you paid for your     
CONSIDERABLY LOWER THAN ANTICIPATED               certificates and the rate of principal payments on  
                                                  the mortgage loans in the applicable Trust. The     
                                                  rate of principal payments includes scheduled       
                                                  payments of interest and principal, prepayments,    
                                                  liquidations due to defaults and repurchases. If    
                                                  the rate of prepayments on the mortgage loans       
                                                  related to your certificates is higher or lower     
                                                  than anticipated, the yield to maturity may be      
                                                  adversely affected. The yield on some types of      
                                                  certificates are more sensitive to variations in    
                                                  prepayments than others. For example, certificates  
                                                  that receive only payments of interest are          
                                                  especially sensitive to variations in the rate of   
                                                  prepayments. If the rate of prepayments is high or  
                                                  if a redemption or call feature of the certificates 
                                                  or the underlying mortgage loans occurs, the        
                                                  holders of such certificates may not fully recoup   
                                                  their initial investment. See 'Yield                
                                                  Considerations' and 'Maturity, Average Life and     
                                                  Prepayment Assumptions' in this prospectus. See     
                                                  also 'Risk Factors' and 'Yield and Prepayment       
                                                  Considerations' in the prospectus supplement for    
                                                  more information concerning the prepayment risks    
                                                  pertaining to your certificates.                    

THE REDEMPTION OF THE CERTIFICATES OR THE         Your certificates may be subject to redemption or   
UNDERLYING MORTGAGE LOANS WILL AFFECT YOUR YIELD  other call features. Likewise, the underlying       
                                                  mortgage loans may be subject to a call feature     
                                                  which would result in the retirement of the         
                                                  certificates. Such an event would affect the        
                                                  average life and yield of each class of             
                                                  certificates in such series. See 'Yield             
                                                  Considerations' and 'Maturity, Average Life and     
                                                  Prepayment Assumptions' in this prospectus.         

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THE MORTGAGE POOLS* 

GENERAL                                                                         

Unless otherwise indicated in the applicable Prospectus Supplement, each
Mortgage Pool will consist entirely of either fixed- or adjustable-rate mortgage
loans (the 'Mortgage Loans') evidenced by promissory notes (the 'Mortgage       
Notes') secured by first mortgages, deeds of trust or security deeds (the       
'Mortgages') on one- to four-family residential properties or multi-family      
residential properties (the 'Mortgaged Properties'). The types of Mortgaged     
Properties securing the Mortgage Loans in each Mortgage Pool may include (a)    
owner occupied, (i) attached or detached single-family residences, including    
residences in planned unit developments, (ii) two- to four-family primary       
residences and (iii) condominiums or other attached dwelling units, (b)         
second/vacation homes and nonowner occupied residences, and (c) leasehold in the
underlying Mortgaged Property and such other types of homes or dwellings as are 
set forth in the related Prospectus Supplement. In the case of leasehold        
interests, the term of the leasehold will exceed the scheduled maturity of the  
Mortgage Loan by at least five years, unless otherwise specified in the related 
Prospectus Supplement. If specified in the applicable Prospectus Supplement, a  
Mortgage Pool may contain Mortgage Loans that, in addition to being secured by  
liens on real estate, are secured by other collateral, such as securities or    
insurance policies, owned by the related Mortgagors or are supported by         
third-party guarantees secured by collateral owned by the related guarantors. If
specified in the applicable Prospectus Supplement, a Mortgage Pool may contain  
cooperative apartment loans ('Cooperative Loans') evidenced by promissory notes 
('Cooperative Notes') secured by security interests in shares issued by private 
cooperative housing corporations (each, a 'Cooperative') and in the related     
proprietary leases or occupancy agreements granting exclusive rights to occupy  
specific dwelling units in the related buildings. As used herein, unless the    
context indicates otherwise, 'Mortgage Loans' includes Cooperative Loans,       
'Mortgaged Properties' includes shares in the related Cooperative and the       
related proprietary leases or occupancy agreements securing Cooperative Notes,  
'Mortgage Notes' includes Cooperative Notes and 'Mortgages' includes a security 
agreement with respect to a Cooperative Note.                                   

   The Mortgage Loans to be purchased by Washington Mutual Mortgage Securities
Corp. (the 'Company') for inclusion in a Mortgage Pool will be screened and     
underwritten in accordance with the standards set forth herein under 'The       
Company -- Mortgage Purchase Program' and ' -- Credit, Appraisal and            
Underwriting Standards'. The Mortgage Loans in each Mortgage Pool will be       
originated by or purchased from lending institutions which meet the requirements
set forth under 'The Company -- Mortgage Purchase Program' (such institutions,  
'Sellers'). Generally, with respect to each Series, the Company, another entity 
set forth in the related Prospectus Supplement (who will generally be a Seller) 
(a 'Servicing Entity') or the Company together with such Servicing Entity will  
be responsible for the servicing and administration of the Mortgage Loans (in   
such capacity, each of the Company and/or such Servicing Entity, a 'Master      
Servicer') and the Sellers will perform certain servicing functions with respect
to the Mortgage Loans (in such capacity, 'Seller/Servicers'), which term        
includes related servicing corporations, agents and replacement servicers       
designated by the Company. In the event that both the Company and a Servicing   
Entity are acting as Master Servicers with respect to a single Series, (i) each 
of the Company and such Servicing Entity will act as Master Servicer only for a 
specific group or groups of Mortgage Loans in the related Mortgage Pool (a      
'Mortgage Loan Servicing Group') as set forth in the related Prospectus         
Supplement, (ii) the duties, obligations and liabilities of each the Company and
such Servicing Entity shall relate only to its respective Mortgage Loan         
Servicing Group, and (iii) the Company, unless otherwise specified in the       
related Prospectus Supplement, will calculate amounts distributable to the      
Certificateholders, prepare tax returns on behalf of the Trust Fund and provide 
certain other services specified in the Pooling Agreement (in such capacity, the
'Certificate Administrator'). Unless otherwise specified in the related         
Prospectus Supplement, in the event that a Servicing Entity is the only Master  

---------                                                                       
* Whenever in this Prospectus the terms 'Mortgage Pool', 'Certificates' and     
'Trust Fund' are used, those terms apply, unless the context indicates          
otherwise, to one specific Mortgage Pool, to the Series of Certificates         
representing undivided interests in the related Trust Fund and to the related   
Trust Fund, respectively. Similarly, the term 'Certificate Interest Rate' will  
refer to the rate of interest borne by the Certificates of one specific Series  
(or borne by one Class of Certificates of one specific Series).                 

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Servicer with respect to any Series, such Servicing Entity will be the          
Certificate Administrator with respect to such Series. If so specified in the   
applicable Prospectus Supplement, however, (i) the servicing of the Mortgage    
Loans will be performed by the Seller which sold the Mortgage Loans to the      
Company for inclusion in the Trust Fund, or by a qualified servicer selected by 
the Company (either entity acting in such capacity, the 'Servicer'), (ii) there 
will not be a Master Servicer and (iii) the Company will act as the Certificate 
Administrator. The Servicer and the Certificate Administrator may perform their 
respective servicing and administrative responsibilities through agents or      
independent contractors, but shall not thereby be released from any of their    
obligations under the Pooling Agreement. See 'Description of                    
Certificates -- Servicing'. The applicable Prospectus Supplement will set forth 
information respecting the number and principal amount of Mortgage Loans which  
were originated for the purpose of (a) purchasing and (b) refinancing the       
related Mortgaged Properties.                                                   

 To the extent specified in the applicable Prospectus Supplement, Mortgage
Loans with loan-to-value ratios and/or principal balances exceeding certain     
limits will be covered partially by Primary Insurance Policies. A Mortgage Pool 
may include Mortgage Loans insured by the Federal Housing Administration ('FHA')
or guaranteed by the Department of Veterans Affairs ('VA'), which loans will be 
covered by FHA insurance policies ('FHA Insurance Policies') and VA guaranties  
('VA Guaranties'), respectively. Mortgage Loans guaranteed by the VA ('VA       
Loans') may also be covered by supplemental Primary Insurance Policies. In      
addition, if specified in the applicable Prospectus Supplement, the Company or a
Servicing Entity, as applicable, as Master Servicer, the Seller or the Servicer,
as applicable, may obtain or establish one or more credit enhancements for a    
Mortgage Pool. Any such credit enhancement will be described in the applicable  
Prospectus Supplement. Such credit enhancements may be limited to one or more   
Classes of Certificates and may include, but will not necessarily be limited to,
any of the following: a Mortgage Pool Insurance Policy, a Special Hazard        
Insurance Policy, a Fraud Bond, a Bankruptcy Bond, a Letter of Credit, a Reserve
Fund, a certificate insurance policy, or any combination of the foregoing.      
Coverage of certain risks of default or loss may also be provided to a          
particular Class or Classes of Certificates by the subordination in right of    
payment of one or more Classes of Certificates of the same Series to the right  
of holders of such Class or Classes of Certificates to receive payments. See    
'Description of Credit Enhancements'.                                           

Unless otherwise specified in the related Prospectus Supplement for any 
Series of Certificates, all Mortgage Loans will be of one or more of the        
following types of Mortgage Loans of varying terms at origination:              

     (1) fully amortizing Mortgage Loans, each providing for interest (the
'Mortgage Interest Rate') at a fixed rate and level monthly payments of 
principal and interest over the term of such Mortgage Loan;             

   (2) Mortgage Loans, each with an adjustable Mortgage Interest Rate,
   which may include graduated payment Mortgage Loans and other Mortgage Loans
providing for negative amortization;                                    

    (3) Mortgage Loans with either fixed or adjustable Mortgage Interest
Rates, that do not provide for level monthly payments of principal and  
 interest and/or do not provide for amortization in full by their maturity
dates;                                                                  

     (4) fixed-rate Mortgage Loans that do not provide for amortization in
full by their maturity dates and which may at the end of their terms be 
converted by the Mortgagors to fully amortizing adjustable-rate Mortgage
Loans, provided that certain conditions are met; and                    

(5) any other type of Mortgage Loan described in the applicable 
Prospectus Supplement.                                                  

If so specified in the related Prospectus Supplement for any Series of  
Certificates, a Mortgage Pool may contain Mortgage Loans which include          
provisions whereby the Seller or a third party partially subsidizes the monthly 
payments of the Mortgagor during the initial portion of the term of the Mortgage
Loan, the difference to be made up from a fund (the 'Buydown Fund') contributed 
by the Seller or a third party at the time of origination of the Mortgage Loan  
(a 'Buydown Loan'). A Buydown Fund will be in an amount equal either to the     
discounted value or full aggregate amount of future payment subsidies. The      
applicable Prospectus Supplement or Current Report on Form 8-K will contain     
information with respect to any Buydown Loans, including information on the     
interest rate initially payable by the Mortgagor, annual increases in the       
interest rate, the length of the buydown period and the Buydown Fund.           

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The underlying assumption of buydown plans is that the income of the Mortgagor  
will increase during the buydown period as a result of normal increases in      
compensation and inflation, so that the Mortgagor will be able to meet the full 
mortgage payments at the end of the buydown period. To the extent that this     
assumption as to increased income is not correct, the possibility of defaults on
Buydown Loans is increased.                                                     

  If so specified in the related Prospectus Supplement, a Mortgage Pool will
contain Mortgage Loans (the 'Additional Collateral Loans') that are secured by  
both the related Mortgaged Property and certain additional collateral which will
consist of (i) a security interest in financial assets owned by the Mortgagor   
(which will consist of securities, insurance policies, annuities, certificates  
of deposit, cash, accounts or similar assets) and/or (ii) a third party         
guarantee (usually by a relative of the Mortgagor), which in turn is secured by 
a security interest in financial assets (as described in (i) above) or          
residential property owned by the guarantor. The collateral described in clauses
(i) and (ii) above is referred to as 'Additional Collateral'. The amount of     
Additional Collateral for any Mortgage Loan generally will not exceed 30% of the
principal amount of such Mortgage Loan (the 'Additional Collateral              
Requirement'), and the requirement to maintain Additional Collateral will       
generally terminate when the Loan-to-Value Ratio of the Mortgage Loan is reduced
to a predetermined level (which generally shall not be more than 75%) as a      
result of a reduction in the loan amount caused by principal payments by the    
Mortgagor or an increase in the appraised value of the related Mortgaged        
Property. The Servicer of the Additional Collateral Loan will be required, in   
accordance with the Master Servicer's servicing guidelines or its normal        
servicing procedures, to attempt to realize on any such Additional Collateral,  
in addition to the related Mortgaged Property, if such Additional Collateral    
Loan is liquidated upon default. The right to receive proceeds from the         
realization of Additional Collateral upon any such liquidation will be assigned 
to the related Trustee. No assurance can be given as to the amount of proceeds, 
if any, that might be realized on the Additional Collateral Loan from such      
Additional Collateral and thereafter remitted to the Trustee. If so specified in
the related Prospectus Supplement, Ambac Assurance Corporation or another       
insurance company will have issued a limited purpose surety bond insuring any   
deficiency in the amounts realized from the liquidation of Additional           
Collateral, up to the amount of the Additional Collateral Requirement. For      
additional considerations concerning the Additional Collateral Loans, see       
'Certain Legal Aspects of Mortgage Loans and Contracts -- The Mortgage          
Loans -- Anti-Deficiency Legislation and Other Limitations on Lenders' herein.  

    The aggregate principal balances of the Mortgage Loans in each Mortgage Pool
on the date specified in the related Prospectus Supplement as the Cut-Off Date  
will be at least $5,000,000. Unless otherwise specified in the Prospectus       
Supplement of a particular Series, each Mortgage Loan will have an outstanding  
principal balance of not less than $30,000 nor more than $1,000,000. With       
respect to each Mortgage Pool, unless otherwise specified in the related        
Prospectus Supplement, all principal and interest payments on the Mortgage Loans
due prior to the Cut-Off Date will have been made.                              

For each Mortgage Pool, the related Prospectus Supplement will generally
contain specific information as of the Cut-Off Date regarding (i) the aggregate 
principal balance of the Mortgage Loans; (ii) the range of Mortgage Interest    
Rates or initial Mortgage Interest Rates borne by the Mortgage Loans; (iii) the 
year in which the first monthly payments occur, and the latest maturity of the  
Mortgage Loans; (iv) the range of principal balances of the Mortgage Loans at   
origination; (v) the aggregate principal balance of all Mortgage Loans having   
loan-to-value ratios at origination exceeding 80%; (vi) the types of dwellings  
constituting the Mortgaged Properties securing the Mortgage Loans; (vii) the    
percentage of the Mortgage Loans (by principal balance) of nonowner occupied and
of second or vacation properties; (viii) the geographic distribution of the     
Mortgage Loans, prepared on a state-by-state basis for states containing 5% or  
more of the Mortgage Pool; and (ix) the number and aggregate principal balance  
of Buydown Loans.                                                               

Specific information with respect to the Mortgage Loans in a particular 
Mortgage Pool and the applicable credit enhancements which is not included in   
the related Prospectus Supplement will generally be included in a Current Report
on Form 8-K which will be available to purchasers of the Certificates at or     
before the time of initial issuance of the related Series of Certificates, and  
which will be filed with the Securities and Exchange Commission (the            
'Commission') within 15 days thereafter.                                        

 The Company and/or a Servicing Entity, as applicable, as Master Servicer,
has entered or will enter into a contract with each related Seller/Servicer to  
perform, as an independent contractor, certain servicing functions for such     
Master Servicer subject to its supervision and may enter into a contract with an

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independent entity to perform administration functions for the Mortgage Pools   
(or, if applicable, the Mortgage Loan Servicing Group), subject to such Master  
Servicer's supervision. Unless otherwise specified in the applicable Prospectus 
Supplement, such Master Servicer will reserve the right to remove any related   
Seller/Servicer of any Mortgage Loan at any time if such Master Servicer        
considers such removal to be in the best interests of Certificateholders. In    
such event, such Master Servicer would continue to be responsible for servicing 
such Mortgage Loan and may designate a replacement Seller/Servicer (which may   
include the Company or the related Servicing Entity, as applicable, or an       
affiliate of the Company or Servicing Entity, as applicable). Each Master       
Servicer may perform its administrative and servicing responsibilities through  
agents or independent contractors, but shall not thereby be released from any of
its responsibilities under the Pooling Agreement. Each Master Servicer will     
receive a fee (the 'Master Servicing Fee') for its services. In the event that  
both the Company and a Servicing Entity are acting as Master Servicers for a    
Series, unless otherwise specified in the related Prospectus Supplement, the    
Master Servicing Fee for each of the Company and such Servicing Entity will only
relate to its respective Mortgage Loan Servicing Group. The Seller/Servicers    
will perform certain servicing functions for the Company pursuant to servicing  
contracts (the 'Servicing Contracts') with a Master Servicer and will receive a 
fee for acting as the primary servicer of the related Mortgage Loans (the       
'Servicing Fee'). The fees to a Master Servicer and the Seller/Servicers will be
paid from the difference between the Mortgage Interest Rates on each Mortgage   
Loan (or Mortgage Loan Servicing Group, if applicable) and the Pass-Through Rate
with respect to such Mortgage Loan.                                             

 If so specified in the applicable Prospectus Supplement, there will be no
Master Servicer for a particular Series of Certificates. In such event, (i) the 
servicing of the Mortgage Loans will be performed by the Servicer specified in  
the applicable Prospectus Supplement, (ii) there will not be a Master Servicer, 
and (iii) the Certificate Administrator will calculate amounts distributable to 
the Certificateholders, prepare tax returns on behalf of the Trust Fund and     
provide certain other administrative services specified in the Pooling          
Agreement. The Servicer and the Certificate Administrator may perform their     
respective servicing and administrative responsibilities through agents or      
independent contractors, but shall not thereby be released from any of their    
respective responsibilities under the Pooling Agreement. With respect to such   
Series of Certificates, the Servicer will receive the Servicing Fee and, with   
respect to each such Series and each Series in which both the Company and a     
Servicing Entity are acting as Master Servicers, the Certificate Administrator  
will receive a fee for its services (the 'Certificate Administrator Fee'), each 
of which will be paid from the difference between the Mortgage Interest Rate on 
each Mortgage Loan and the Pass-Through Rate with respect to such Mortgage Loan.

Unless otherwise specified in the applicable Prospectus Supplement, the 
Certificates of each Series will represent undivided interests in a trust (the  
'Trust Fund') consisting of the Mortgage Loans included in the Mortgage Pool for
that Series and related property. Certain Series will be enhanced by mortgage   
loan insurance or other forms of credit enhancement, in each case as more fully 
described herein under the captions 'Description of Certificates' and           
'Description of Credit Enhancements' and/or in the related Prospectus           
Supplement. When each Series of Certificates is issued, the Company will cause  
the Mortgage Loans in the Mortgage Pool for that Series to be assigned to an    
independent bank or trust company as trustee (the 'Trustee') for the benefit of 
the holders of Certificates of that Series, and the Master Servicer or the      
Servicer will be responsible for servicing the Mortgage Loans pursuant to a     
separate pooling and servicing agreement ('Pooling Agreement') for the Series.  

The Company's assignment of the Mortgage Loans to the Trustee will be   
without recourse, and the Company's obligations with respect to the Mortgage    
Loans will, unless otherwise indicated in the Prospectus Supplement for a Series
of Certificates, be limited to any representations and warranties made by it in,
as well as its contractual obligations under, the Pooling Agreement for each    
Series. These obligations consist primarily of the obligation to administer and,
if applicable, service the Mortgage Loans. With respect to Series of            
Certificates as to which the Company and/or a Servicing Entity will act as      
Master Servicer and unless otherwise stated in the Prospectus Supplement for    
such Series, in the event of delinquencies in payments on the Mortgage Loans in 
any Mortgage Pool (or the related Mortgage Loan Servicing Group for such Series 
if both the Company and a Servicing Entity are acting as Master Servicers), to  
advance cash ('Advances') in the amounts described herein under 'Description of 
Certificates -- Advances', to the extent such Advances are not made by the      
Seller/Servicers and, if the Company and a Servicing Entity are acting as Master
Servicers for such Series, to the extent that such                              

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Advances relate to a Mortgage Loan in their respective Mortgage Loan Servicing  
Group. Any such Advances by a Master Servicer will be limited to amounts which, 
in the judgment of such Master Servicer, ultimately will be reimbursable with   
respect to such Mortgage Pool (or the related Mortgage Loan Servicing Group for 
such Series if both the Company and a Servicing Entity are acting as Master     
Servicers) from Mortgagor payments or under any applicable Mortgage Pool        
Insurance Policy, any applicable Special Hazard Insurance Policy, any Primary   
Insurance Policy, FHA Insurance Policy or VA Guaranty issued with respect to a  
Mortgage Loan, any applicable Letter of Credit, Reserve Fund or any other       
applicable policy of insurance, any subordination feature described herein or   
the proceeds of liquidation of a Mortgage Loan. See 'Description of Credit      
Enhancements'. Unless otherwise specified in the applicable Prospectus          
Supplement, each Seller/Servicer will be obligated, in the event of             
delinquencies on the Mortgage Loans serviced by it in any Mortgage Pool, to make
Advances limited to amounts which, in its judgment, after consultation with the 
Master Servicer (or the related Master Servicer if both the Company and a       
Servicing Entity are acting as Master Servicers), ultimately will be            
reimbursable from the sources stated above. If so specified in the applicable   
Prospectus Supplement, neither a Master Servicer nor any Seller/Servicers will  
be obligated to make Advances with respect to Mortgage Loans delinquent longer  
than the time period specified in such Prospectus Supplement. See 'Description  
of Certificates -- Advances' and 'Description of Credit Enhancements'. A Master 
Servicer is obligated to remit to Certificateholders of a Series all amounts    
relating to the Mortgage Loans (or the related Mortgage Loan Servicing Group for
such Series if both the Company and a Servicing Entity are acting as Master     
Servicers) to the extent such amounts have been collected or advanced by the    
Seller/Servicers or advanced by such Master Servicer and are due                
Certificateholders pursuant to the terms of the Pooling Agreement for such      
Series. With respect to Series of Certificates as to which there will be no     
Master Servicer and the servicing of the Mortgage Loans will be performed by the
Servicer, unless otherwise stated in the applicable Prospectus Supplement, the  
Servicer will be obligated to make Advances in the amounts described herein     
under 'Description of Certificates -- Advances', limited to amounts which, in   
the judgment of the Servicer, ultimately will be reimbursable with respect to   
such Mortgage Pool from any of the sources stated above.                        

CONVERSION OF MORTGAGE LOANS                                                    

 The Prospectus Supplement for certain Series of Certificates representing
undivided interests in a Trust Fund consisting of adjustable-rate Mortgage Loans
may provide that some or all of the Mortgage Loans in the related Mortgage Pool 
may have a conversion feature. Unless otherwise specified in the related        
Prospectus Supplement, each such Mortgage Loan may be converted at the          
Mortgagor's option at any time during a specified initial period to a fixed-rate
Mortgage Loan, subject to the Seller/Servicer's or the Servicer's determination 
that the Mortgagor has met certain payment history requirements and the payment 
of a conversion fee ('Conversion Fee') to the Seller/Servicer or the Servicer,  
as applicable. Unless otherwise specified in the applicable Prospectus          
Supplement, upon any such conversion, the Company or the Servicing Entity, as   
applicable, as Master Servicer, or the Seller with respect to Series of         
Certificates as to which there will be no Master Servicer, will repurchase the  
Mortgage Loan from the Mortgage Pool at its then outstanding principal balance, 
plus interest at the Mortgage Interest Rate on such Mortgage Loan to the date of
repurchase. The amounts distributable to Certificateholders of different        
Classes, if applicable, upon such repurchase, and the portion of the Conversion 
Fee to be passed through to Certificateholders, if any, will be set forth in the
Prospectus Supplement for each such Series of Certificates.                     

USE OF PROCEEDS 

  All of the net proceeds to be received from the sale of each Series of the
Certificates will be used by the Company to purchase the Mortgage Loans related 
to that Series or to return to the Company the amounts previously used to effect
such purchases, the costs of carrying the Mortgage Loans until sale of the      
Certificates and other expenses connected with pooling the Mortgage Loans and   
issuing the Certificates, or for general corporate purposes. The Company expects
to issue Certificates in Series from time to time as part of its continuing     
program of acquiring Mortgage Loans and selling Certificates. See 'The          
Company -- Mortgage Purchase Program'.                                          

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YIELD CONSIDERATIONS

GENERAL                                                                         

  The yield to maturity on any Certificate will depend on the purchase price
paid by the Certificateholder, the effective interest rate of the Certificate   
and the weighted average life of the Mortgage Loans underlying the Certificate. 
See 'Maturity, Average Life and Prepayment Assumptions' for a discussion of     
weighted average life. Any prepayment of a Mortgage Loan, liquidation of a      
Mortgage Loan (by foreclosure proceedings or by virtue of the purchase of a     
Mortgage Loan in advance of its stated maturity or otherwise) or, if applicable,
the occurrence of a redemption or other call feature of the Certificates of a   
Series or the underlying Mortgage Loans will have the effect of passing through 
to Certificateholders amounts of principal which would otherwise be passed      
through in amortized increments over the remaining term of such Mortgage Loan.  
The effect of such prepayments on the yield to maturity to Certificateholders   
depends on several factors. For example, if the Certificates are purchased above
par (i.e., for more than 100% of the outstanding principal balance of the       
Mortgage Loans they represent), such prepayments will tend to decrease the yield
to maturity. If the Certificates were purchased at a discount (i.e., for less   
than 100% of such outstanding principal balance), such prepayments will tend to 
increase the yield to maturity. See 'Certain Legal Aspects of the Mortgage      
Loans -- Enforceability of Certain Provisions' for a description of certain     
provisions of each Mortgage Loan and statutory, regulatory and judicial         
developments that may affect the prepayment experience and maturity assumptions 
on the Mortgage Loans. See also 'Description of Certificates -- Termination' for
a description of the repurchase of the Mortgage Loans in any Mortgage Pool when 
the aggregate outstanding principal balance thereof is less than a specified    
percentage of the aggregate outstanding principal balance of the Mortgage Loans 
in such Mortgage Pool on the related Cut-Off Date.                              

    The timing of changes in the rate of principal payments on or repurchases of
the Mortgage Loans (including, if applicable, the occurrence of a redemption or 
other call feature of the Certificates of a Series or the underlying Mortgage   
Loans) may significantly affect an investor's actual yield to maturity, even if 
the average rate of principal payments experienced over time is consistent with 
an investor's expectation. In general, the earlier a prepayment of principal on 
the underlying Mortgage Loans or a repurchase thereof (including, if applicable,
the occurrence of a redemption or other call feature of the Certificates of a   
Series or the underlying Mortgage Loans), the greater will be the effect on an  
investor's yield to maturity. As a result, the effect on an investor's yield to 
maturity of principal payments and repurchases occurring at a rate higher (or   
lower) than the rate anticipated by the investor during the period immediately  
following the issuance of a Series of Certificates would not be fully offset by 
a subsequent like reduction (or increase) in the rate of principal payments.    

EFFECTIVE INTEREST RATE                                                         

Unless otherwise specified in the applicable Prospectus Supplement, each
monthly interest payment on a Mortgage Loan is calculated as 1/12 of the        
applicable Mortgage Interest Rate multiplied by the unpaid principal balance    
outstanding on the first day of the month after application of principal        
payments made on such date. Unless otherwise specified in the applicable        
Prospectus Supplement, the Certificate Interest Rate for each Class of          
Certificates will be calculated on the basis of the 'Pass-Through Rate' for the 
related Mortgage Loans. With respect to a Series of Certificates as to which the
Company will act as Master Servicer, the 'Pass-Through Rate' for any Mortgage   
Loan will equal the related Mortgage Interest Rate less the sum of the Servicing
Fee and the Master Servicing Fee for such Mortgage Loan. With respect to a      
Series of Certificates as to which the Company will not act as Master Servicer, 
the 'Pass-Through Rate' for any Mortgage Loan will equal the related Mortgage   
Interest Rate less the sum of the Servicing Fee and the Certificate             
Administrator Fee for such Mortgage Loan.                                       

   As described in the applicable Prospectus Supplement, in certain events, if
the amounts available for distribution in respect of interest are not sufficient
to cover the total of all accrued and unpaid interest at the Pass-Through Rate, 
the available amount will be distributed to the Certificateholders pro rata in  
accordance with their respective interests or in an order of priority described 
in the applicable Prospectus Supplement.                                        

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For the sale of Certificates under this Prospectus, the Company may     
establish one or more Mortgage Pools having a variable, as opposed to a fixed,  
Pass-Through Rate. A Mortgage Pool with a variable Pass-Through Rate may be     
composed of Mortgage Loans that have adjustable Mortgage Interest Rates, or of  
Mortgage Loans with fixed Mortgage Interest Rates if the amount to be passed    
through is determined on a Mortgage Loan-by-Mortgage Loan basis as the Mortgage 
Interest Rate minus specified fees for servicing and administrative             
compensation, which may include any of the Servicing Fee, the Master Servicing  
Fee and the Certificate Administrator Fee, for each such Mortgage Loan, as set  
forth in the Prospectus Supplement, or as otherwise determined as described in  
the applicable Prospectus Supplement. Because the Mortgage Interest Rates may   
vary in such a Mortgage Pool, and the servicing and administrative compensation 
generally will be fixed, the Pass-Through Rate will be affected by              
disproportionate principal prepayments among Mortgage Loans bearing different   
Mortgage Interest Rates and, consequently, the yield to maturity                
Certificateholders will be affected. The characteristics of any such            
variable-rate Mortgage Pools will be described in the applicable Prospectus     
Supplement. Although Mortgage Interest Rates in a fixed Pass-Through Rate       
Mortgage Pool may vary from Mortgage Loan to Mortgage Loan, disproportionate    
principal prepayments among the Mortgage Loans bearing different Mortgage       
Interest Rates will not affect the return to Certificateholders.                

For any Series of Certificates, the effective yield to maturity to      
Certificateholders generally will be slightly lower than the yield to maturity  
otherwise produced by the applicable Pass-Through Rate because, while interest  
will accrue on each Mortgage Loan from the first day of each month, the         
distribution of such interest to Certificateholders at the applicable           
Pass-Through Rate generally will be made on a later day, which, unless otherwise
specified in the applicable Prospectus Supplement, will be the 25th day (or, if 
such day is not a business day, the next succeeding business day) of the month  
following the month of accrual.                                                 

   When a prepayment in full (a 'Payoff') is made by a Mortgagor on a Mortgage
Loan during a month, the Mortgagor is charged interest on the days in the month 
actually elapsed up to the date of the Payoff at the daily interest rate        
(determined by dividing the Mortgage Interest Rate by 365, or 360 in the case of
Payoffs received on a date on which the monthly payment for such Mortgage Loan  
is due (a 'Due Date')) which is applied to the principal amount of the Mortgage 
Loan so prepaid. Similarly, when a Mortgage Loan is liquidated under a Mortgage 
Pool Insurance Policy during a month, the pool insurer will pay interest on the 
Mortgage Loan only to the date the claim is paid. Also, when a partial principal
prepayment (a 'Curtailment') is made on a Mortgage Loan together with the       
scheduled Monthly Payment for a month on or after the related Due Date, the     
Mortgagor does not pay interest on the prepaid amount, and therefore            
Certificateholders will not receive any interest on such prepaid amount.        

  Unless otherwise specified in the applicable Prospectus Supplement, to the
extent that Compensating Interest (as defined below) is not paid, the effect of 
a Payoff or such a liquidation will be to reduce slightly the amount of interest
passed through on the next Distribution Date, because interest on the principal 
amount of the Mortgage Loan so prepaid was paid only to the date of such Payoff 
or liquidation and not to the end of the month of prepayment. Unless otherwise  
specified in the applicable Prospectus Supplement, the following will apply:    
Payoffs received during the period from the first day of a calendar month       
through the 14th day of such month will be passed through, without Compensating 
Interest and without interest accrued from the first day of such month to the   
date of the Payoff, on the Distribution Date in such month, and Payoffs received
during the period from the 15th day of a calendar month through the last day of 
such month will be passed through, with Compensating Interest and with interest 
at the applicable Pass-Through Rate attributable to interest paid through the   
date of the Payoff by the Mortgagors on the Distribution Date in the following  
month. Proceeds of Mortgage Loans liquidated under a Mortgage Pool Insurance    
Policy during a month will be passed through, with Compensating Interest and    
interest at the applicable Pass-Through Rate attributable to interest paid by   
the pool insurer under an applicable Mortgage Pool Insurance Policy, on the     
Distribution Date in the following month.                                       

Unless otherwise specified in the applicable Prospectus Supplement, the 
following will apply: 'Compensating Interest' will consist of a full month's    
payment of interest at the applicable Pass-Through Rate on a Mortgage Loan for  
which a Payoff is made or which is liquidated, less the interest at the         
applicable Pass-Through Rate attributable to interest paid by the Mortgagor or  
by the pool insurer under an applicable Mortgage Pool Insurance Policy through  
the date of Payoff. Compensating Interest on                                    

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liquidated Mortgage Loans will be passed through to Certificateholders, together
with any interest at the applicable Pass-Through Rate attributable to interest  
paid by the pool insurer under any applicable Mortgage Pool Insurance Policy to 
the date of liquidation on the Distribution Date of the month following         
liquidation. Compensating Interest on Payoffs will be paid on a Distribution    
Date only with respect to Payoffs received during the period from the 15th day  
of the preceding calendar month through the last day of such preceding month.   
The applicable Pooling and Servicing Agreement will specify any limitations on  
the extent of or source of funds available for payments of Compensating         
Interest.                                                                       

MATURITY, AVERAGE LIFE AND PREPAYMENT ASSUMPTIONS 

    The Mortgage Loans at origination will have varying maturities as more fully
described in the applicable Prospectus Supplement. The Company expects that most
such Mortgage Loans will have maturities at origination of either 10 to 15 years
or 20 to 30 years and that such Mortgage Loans may be prepaid in full or in part
at any time, generally without penalty. The prepayment experience or, if        
applicable, the occurrence of a redemption or other call feature of the         
Certificates of a Series or the underlying Mortgage Loans will affect the lives 
of the Certificates. The Company anticipates that a substantial number of       
Mortgage Loans will be paid in full prior to their scheduled maturity.          

A number of factors, including homeowner mobility, economic conditions, 
enforceability of 'due-on-sale' clauses, assumability of the Mortgage Loans,    
mortgage market interest rates and the general availability of mortgage funds   
affect prepayment experience. Generally, each Mortgage executed in connection   
with a fixed-rate Mortgage Loan, except for FHA-insured or VA-guaranteed        
Mortgage Loans, will contain 'due-on-sale' provisions permitting the holder of  
the Mortgage Note to accelerate the maturity of the Mortgage Loan upon          
conveyance by the Mortgagor of the underlying Mortgaged Property. With respect  
to Series of Certificates as to which the Company will act as Master Servicer,  
the Master Servicer will agree that it or the applicable Seller/Servicer will   
enforce any 'due-on-sale' clause contained in any such Mortgage to the extent it
has knowledge of the conveyance or proposed conveyance of the underlying        
Mortgaged Property and reasonably believes that it is entitled to do so under   
applicable law; provided, however, that neither the Master Servicer nor the     
Seller/Servicer will take any action in relation to the enforcement of any      
'due-on-sale' provision which would impair or threaten to impair any recovery   
under any related Primary Insurance Policy or Mortgage Pool Insurance Policy.   
With respect to Series of Certificates as to which the Company will not act as  
Master Servicer, the Servicer will agree to enforce any 'due-on-sale' clause in 
the instances and to the extent described in the preceding sentence. However, a 
Mortgage Pool may contain fixed-rate Mortgage Loans which will allow a          
subsequent owner of a Mortgaged Property, if credit underwriting standards are  
met, to assume such fixed-rate Mortgage Loan without enforcement of any         
'due-on-sale' clause. With respect to Mortgage Loans bearing adjustable Mortgage
Interest Rates, unless otherwise specified in the related Prospectus Supplement,
the related Mortgages will generally provide that such Mortgage Loans are       
assumable by creditworthy subsequent owners without enforcement of any          
'due-on-sale' clause. An assumption of a Mortgage Loan may have the effect of   
increasing the life of such Mortgage Loan.                                      

'Weighted average life' refers to the average amount of time that will  
elapse from the date of issuance of a Certificate until each dollar of principal
will be repaid to the Certificateholders. The weighted average life of the      
Certificates will be influenced by the rate at which principal on the Mortgage  
Loans in the Mortgage Pool is paid, which may be in the form of (i) scheduled   
amortization or (ii) Curtailments and Payoffs (collectively 'Principal          
Prepayments'). Based upon published information, the rate of prepayments on     
fixed- and adjustable-rate conventional one- to four-family mortgage loans has  
fluctuated significantly in recent years. The Company believes such fluctuation 
is due to a number of factors, including those discussed above, and that such   
factors will also affect the prepayment experience on the Mortgage Loans in any 
Mortgage Pool. Accordingly, the Company cannot predict what future prepayment   
experience will be or what the resulting weighted average life might be.        
However, principal prepayments on mortgage loans are commonly measured relative 
to a prepayment standard or model. The model used in this Prospectus and in each
Prospectus Supplement, unless otherwise indicated therein (the 'Basic Prepayment
Assumption' or 'BPA'), represents an assumed rate of prepayment each month      
relative to the then outstanding principal balance of a pool of new Mortgage    
Loans. The BPA assumes prepayment rates of 0.2% per annum of the then           
outstanding principal balance of such Mortgage Loans in the first               

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month of the life of the Mortgage Loans and an additional 0.2% per annum in each
month thereafter until the 30th month. Beginning in the 30th month and in each  
month thereafter during the life of the Mortgage Loans, such prepayment model   
assumes a constant prepayment rate of 6.0% per annum. Varying prepayment        
assumptions are often expressed as percentages of the BPA (e.g., at 150% of the 
BPA, assumed prepayments during the first month of a pool would be 0.3% per     
annum, each month thereafter the rate of prepayments would increase by 0.3% per 
annum, and in the 30th and succeeding months the rate would be 9% per annum).   
The Prospectus Supplement or Current Report on Form 8-K for each Series of      
Certificates may contain a table setting forth the projected weighted average   
life of each Class of Certificates of such Series and the percentage of the     
original principal amounts or notional principal amounts of each such Class that
would be outstanding on specified Distribution Dates for such Series, based on  
the assumptions set forth with respect to the BPA deemed appropriate by the     
Company and specified therein.                                                  

REDEMPTION OF CERTIFICATES OR UNDERLYING MORTGAGE LOANS                         

   If so specified in the Prospectus Supplement for a Series, the Certificates
of such Series or the underlying Mortgage Loans may be subject to redemption at 
the direction of the holder of certain redemption rights, beginning on the      
Distribution Date and subject to payment of the redemption price and other      
conditions specified in the related Prospectus Supplement. A redemption would   
result in the concurrent retirement of all outstanding Certificates of the      
Series and would decrease the average lives of such Certificates, perhaps       
significantly. The earlier after the Closing Date that a redemption occurs, the 
greater would be such effect. In general, a redemption is most likely to occur  
if prevailing interest rates have declined. The holder of the redemption right  
may also be a Holder of one or more Classes of the related Series, which may    
affect such holder's decision whether to direct a redemption. The effect of a   
redemption of the Certificates or underlying Mortgage Loans on interest payments
on the Classes of Certificates of a Series will be described in the related     
Prospectus Supplement. See 'Description of the Certificates -- Redemption       
Agreement' and 'The Mortgage Pools -- General'.                                 

THE COMPANY 

  The Company, a Delaware corporation, is a wholly-owned indirect subsidiary
of Washington Mutual, Inc., a savings and loan holding company. The Company was 
organized for the purpose of providing mortgage lending institutions, including 
affiliated institutions, with greater financing and lending flexibility by      
purchasing mortgage loans from such institutions and issuing mortgage-backed    
securities. The Company's principal executive offices are located at 75 North   
Fairway Drive, Vernon Hills, Illinois 60061, telephone (847) 549-6500.          

MORTGAGE PURCHASE PROGRAM                                                       

  Set forth below is a description of the principal aspects of the Company's
purchase program for Mortgage Loans eligible for inclusion in a Mortgage Pool.  
The Company will represent and warrant to the Trustee that each Mortgage Pool   
will consist of Mortgage Loans purchased from one or more institutions          
('Sellers') which are (i) state-chartered or federally-chartered savings and    
loan associations, banks or similar financial institutions whose deposits or    
accounts are insured by the Federal Deposit Insurance Corporation ('FDIC') or,  
if specified in the applicable Prospectus Supplement or Current Report on Form  
8-K, substantially similar deposit insurance approved by any applicable rating  
agency, (ii) approved as mortgagees by the FHA ('FHA-Approved Mortgagees'),     
(iii) approved by Fannie Mae as mortgagees ('Fannie Mae Approved Mortgagees') or
by Freddie Mac as mortgagees ('Freddie Mac Approved Mortgagees'), or any        
successor entity to either, (iv) assignees of FHA-Approved Mortgagees, Fannie   
Mae Approved Mortgagees or Freddie Mac Approved Mortgagees, (v) the FDIC,       
(vi) entities which have purchased Mortgage Loans from institutions described in
clauses (i)-(v) above or (vii) such other entities as may be described in the   
applicable Prospectus Supplement. The institutions described in clauses (i)-(v) 
of the preceding sentence will collectively be referred to herein as 'Lenders'. 
The Company has approved (or will approve) individual institutions as eligible  
Lenders by applying certain criteria, including the Lender's depth of mortgage  
origination experience, servicing experience and financial stability. In        
general, each Lender must have experience in originating and servicing          
conventional residential mortgages and must have a net worth acceptable to the  
Company. Each Lender is required to use the services of qualified               

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underwriters, appraisers and attorneys. Other factors evaluated by the Company  
in approving Lenders include delinquency and foreclosure ratio performances.    

LOAN STANDARDS                                                                  

  The Mortgage Loans to be included in each Mortgage Pool will be loans with
fixed or adjustable rates of interest secured by first mortgages, deeds of trust
or security deeds on residential properties with original principal balances    
which generally did not exceed 95% of the value of the Mortgaged Properties,    
unless such loans are FHA-insured or VA-guaranteed. Generally, each Mortgage    
Loan having a loan-to-value ratio at origination and as of the Cut-Off Date in  
excess of 80% or which is secured by a second or vacation home will be covered  
by a Primary Insurance Policy, FHA Insurance Policy or VA Guaranty insuring     
against default all or a specified portion of the principal amount thereof. See 
'Primary Insurance, FHA Mortgage Insurance, VA Mortgage Guaranty, Hazard        
Insurance; Claims Thereunder'. Each mortgage insurer must be a Qualified Insurer
(defined herein to mean a mortgage guaranty insurance company which is duly     
qualified as such under the laws of each state in which the Mortgaged Properties
are located, duly authorized and licensed in such states to transact a mortgage 
guaranty insurance business and to write the insurance provided by the Primary  
Insurance Policy or the Mortgage Pool Insurance Policy, as the case may be, and 
which is approved as an insurer by Freddie Mac, Fannie Mae or any successor     
entity to either, and by the Company).                                          

The Mortgage Loans to be included in each Mortgage Pool will be 'one- to
four-family' mortgage loans, which means permanent loans (as opposed to         
construction or land development loans) secured by Mortgages on non-farm        
properties, including attached or detached single-family or second/vacation     
homes, two- to four-family primary residences and condominiums or other attached
dwelling units, including individual condominiums, row houses, townhouses and   
other separate dwelling units even when located in buildings containing five or 
more such units. Each Mortgage Loan must be secured by an owner occupied primary
residence or second/vacation home, or by a nonowner occupied residence. The     
Mortgaged Property may not be a mobile home.                                    

CREDIT, APPRAISAL AND UNDERWRITING STANDARDS                                    

  The Mortgage Loans to be included in each Mortgage Pool will be subject to
the various credit, appraisal and underwriting standards described herein. The  
Company's credit, appraisal and underwriting standards with respect to certain  
Mortgage Loans will generally conform to those published in the Company's       
Selling Guide (together with the Company's Servicing Guide, the 'Guide', as     
modified from time to time). The credit, appraisal and underwriting standards as
set forth in the Guide are continuously revised based on opportunities and      
prevailing conditions in the residential mortgage market and the market for the 
Company's mortgage pass-through certificates. The Mortgage Loans may be         
underwritten by the Company or by designated third parties.                     

    In addition, the Company may purchase Mortgage Loans which do not conform to
the underwriting standards set forth in the Guide. Such Mortgage Loans may be   
purchased in negotiated transactions from Sellers who will represent that the   
Mortgage Loans have been originated in accordance with credit, appraisal and    
underwriting standards agreed to by the Company. The Company will generally     
review only a limited portion of the Mortgage Loans in any delivery of such     
Mortgage Loans for conformity with the applicable credit, appraisal and         
underwriting standards. Certain other Mortgage Loans will be purchased from     
Sellers who will represent that the Mortgage Loans were originated pursuant to  
credit, appraisal and underwriting standards determined by a mortgage insurance 
company acceptable to the Company. The Company will accept a certification from 
such insurance company as to a Mortgage Loan's insurability in a mortgage pool  
as of the date of certification as evidence that such Mortgage Loan conforms to 
applicable underwriting standards. Such certifications will likely have been    
issued before the purchase of the Mortgage Loans by the Company. The Company    
will perform only random quality assurance reviews on Mortgage Loans delivered  
with such certifications.                                                       

The credit, appraisal and underwriting standards utilized in negotiated 
transactions and the credit, appraisal and underwriting standards of insurance  
companies issuing certificates may vary substantially from the credit, appraisal
and underwriting standards set forth in the Guide. All of the credit, appraisal 

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and underwriting standards will provide an underwriter with sufficient          
information to evaluate the borrower's repayment ability and the adequacy of the
Mortgaged Property as collateral. Due to the variety of underwriting standards  
and review procedures that may be applicable to the Mortgage Loans included in  
any Mortgage Pool, the related Prospectus Supplement will not distinguish among 
the various credit, appraisal and underwriting standards applicable to the      
Mortgage Loans nor describe any review for compliance with applicable credit,   
appraisal and underwriting standards performed by the Company. Moreover, there  
can be no assurance that every Mortgage Loan was originated in conformity with  
the applicable credit, appraisal and underwriting standards in all material     
respects, or that the quality or performance of Mortgage Loans underwritten     
pursuant to varying standards as described above will be equivalent under all   
circumstances.                                                                  

The Company's underwriting standards are intended to evaluate the       
prospective Mortgagor's credit standing and repayment ability, and the value and
adequacy of the proposed Mortgaged Property as collateral. In the loan          
application process, prospective Mortgagors will be required to provide         
information regarding such factors as their assets, liabilities, income, credit 
history, employment history and other related items. Each prospective Mortgagor 
will also provide an authorization to apply for a credit report which summarizes
the Mortgagor's credit history. With respect to establishing the prospective    
Mortgagor's ability to make timely payments, the Company will require evidence  
regarding the Mortgagor's employment and income, and of the amount of deposits  
made to financial institutions where the Mortgagor maintains demand or savings  
accounts. In some instances, Mortgage Loans which were originated under a       
Limited Documentation Origination Program may be sold to the Company. For a     
mortgage loan originated under a Limited Documentation Origination Program to   
qualify for purchase by the Company, the prospective mortgagor must have a good 
credit history and be financially capable of making a larger cash down payment, 
in a purchase, or be willing to finance less of the appraised value, in a       
refinancing, than would otherwise be required by the Company. Currently, the    
Company's underwriting standards provide that only mortgage loans with certain  
loan-to-value ratios will qualify for purchase. If the mortgage loan qualifies, 
the Company waives some of its documentation requirements and eliminates        
verification of income and employment for the prospective mortgagor.            

   The Company's underwriting standards generally follow guidelines acceptable
to Fannie Mae and Freddie Mac. In determining the adequacy of the property as   
collateral, an independent appraisal is made of each property considered for    
financing. The appraiser is required to inspect the property and verify that it 
is in good condition and that construction, if new, has been completed. The     
appraisal is based on the appraiser's judgment of values, giving appropriate    
weight to both the market value of comparable homes and the cost of replacing   
the property.                                                                   

Certain states where the Mortgaged Properties may be located are        
'anti-deficiency' states where, in general, lenders providing credit on one- to 
four-family properties must look solely to the property for repayment in the    
event of foreclosure. See 'Certain Legal Aspects of the Mortgage Loans -- Anti- 
Deficiency Legislation and Other Limitations on Lenders'. The Company's         
underwriting standards in all states (including anti-deficiency states) require 
that the underwriting officers be satisfied that the value of the property being
financed, as indicated by the independent appraisal, currently supports and is  
anticipated to support in the future the outstanding loan balance, and provides 
sufficient value to mitigate the effects of adverse shifts in real estate       
values.                                                                         

SELLER WARRANTIES AND INDEMNIFICATION OF THE COMPANY                            

  With respect to Series of Certificates as to which the Company will be the
only Master Servicer or with respect to each Series as to which the Company and 
a Servicing Entity will act as Master Servicers, each Seller generally will make
representations and warranties with respect to Mortgage Loans or the Mortgage   
Loans in the Company's Mortgage Loan Servicing Group, respectively, sold by it  
to the Company for inclusion in the Trust Fund which the Company deems          
sufficient to permit it to make its representations and warranties in respect of
such Mortgage Loans to the Trustee and the Certificateholders under the Pooling 
Agreement. See 'Description of Certificates -- Representations and Warranties'  
below. Each Seller will also make certain other representations and warranties  
regarding Mortgage Loans sold by it. Upon the breach of any representation or   
warranty made by a Seller that materially and adversely affects the interests of
the Certificateholder in a Mortgage Loan (other than those breaches which have  

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been cured), the Company may require the Seller to repurchase the related       
Mortgage Loan. In addition, each Seller will agree to indemnify the Company     
against any loss or liability incurred by the Company on account of any breach  
of any representation or warranty made by the Seller, any failure to disclose   
any matter that makes any such representation and warranty misleading, or any   
inaccuracy in information furnished by the Seller to the Company, including any 
information set forth in this Prospectus or in any Prospectus Supplement. See   
'Description of Certificates -- Assignment of Mortgage Loans' and               
' -- Representations and Warranties'.                                           

  With respect to Series of Certificates as to which there will be no Master
Servicer, the Seller which sold the Mortgage Loans to the Company for inclusion 
in the Trust Fund will make representations and warranties to the Company with  
respect to such Mortgage Loans, and the Company will assign such representations
and warranties to the Trustee and the Certificateholders under the Pooling      
Agreement. With respect to each Series of Certificates as to which a Servicing  
Entity will be a Master Servicer, such Servicing Entity which sold the Mortgage 
Loans or the Mortgage Loan Servicing Group, as applicable, to the Company for   
inclusion in the Trust Fund will make representations and warranties to the     
Company with respect to such Mortgage Loans or Mortgage Loans in the related    
Mortgage Loan Servicing Group, as applicable, and the Company will assign such  
representations and warranties to the Trustee and the Certificateholders under  
the Pooling Agreement. Upon the breach of any representation or warranty made by
such Seller or Servicing Entity that materially and adversely affects the       
interests of the Certificateholder in a Mortgage Loan (other than those breaches
which have been cured), the Seller or Servicing Entity will be required to      
repurchase the related Mortgage Loan. See 'Description of                       
Certificates -- Assignment of Mortgage Loans' and ' -- Representations and      
Warranties'.                                                                    

RELATIONSHIPS WITH AFFILIATES                                                   

Either Washington Mutual Bank, FA or Washington Mutual Home Loans, Inc.,
affiliates of the Company, may be a Seller, a Seller/Servicer or a Servicer. One
of the Company's directors is also a director of Washington Mutual Home Loans,  
Inc.                                                                            

DESCRIPTION OF CERTIFICATES 

 Each Series of Certificates will be issued pursuant to a separate Pooling
Agreement. With respect to Series of Certificates as to which there will be a   
Master Servicer, the Pooling Agreement will be between the Company, as Depositor
and, if applicable, as Master Servicer, the Servicing Entity, if applicable, as 
Master Servicer, and the Trustee named in the Prospectus Supplement, and the    
Mortgage Loans will be serviced by Seller/Servicers pursuant to selling and     
servicing contracts ('Selling and Servicing Contracts') between the Company or  
the Servicing Entity, as applicable, and such Seller/Servicers, or will be      
serviced by servicers pursuant to servicing arrangements approved by the Company
or the Servicing Entity, as applicable. With respect to Series of Certificates  
as to which there will be no Master Servicer, the Pooling Agreement will be     
among the Company, as Depositor and Certificate Administrator, the Servicer and 
the Trustee named in the Prospectus Supplement. A form of Pooling Agreement and 
a form of the Selling and Servicing Contract are filed as exhibits to the       
Registration Statement of which this Prospectus is a part. The following        
discussion summarizes certain provisions expected to be contained in each       
Pooling Agreement which governs the Trust Funds consisting principally of one-  
to four-family residential properties. The applicable Prospectus Supplement will
describe material features of the related Pooling Agreement, which may differ   
from the features described below. The following summary and the summary        
contained in a Prospectus Supplement do not purport to be complete and are      
subject to, and are qualified in their entirety by reference to, all of the     
provisions of the Pooling Agreement for each particular Series and of the       
applicable Selling and Servicing Contracts or similar contracts.                

GENERAL                                                                         

 The Certificates of each Series will represent undivided interests in the
Trust Fund created pursuant to the Pooling Agreement for such Series. The Trust 
Fund for each Series will consist, to the extent provided in the Pooling        
Agreement, of (i) such Mortgage Loans as from time to time are subject to the   
Pooling Agreement (exclusive of any related Retained Yield (described below),   
except as otherwise specified in the related Prospectus Supplement), (ii) such  
assets as from time to time are held in the Certificate Account (described      
below) and the Custodial Accounts for P&I (described below) related to          

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such Mortgage Loans (exclusive of any Retained Yield, except as otherwise       
specified in the related Prospectus Supplement), (iii) property acquired by     
foreclosure of Mortgage Loans or deed in lieu of foreclosure, (iv) any          
combination, as specified in the related Prospectus Supplement, of a Letter of  
Credit, Mortgage Pool Insurance Policy, Special Hazard Insurance Policy,        
Bankruptcy Bond, Fraud Bond, Reserve Fund or other type of credit enhancement as
described under 'Description of Credit Enhancements', (v) any private mortgage  
pass-through certificates or any certificates issued by the Freddie Mac, Fannie 
Mae or the Government National Mortgage Association described in the applicable 
Prospectus Supplement, and (vi) such other assets or rights as are described in 
the applicable Prospectus Supplement. If so specified in the applicable         
Prospectus Supplement, Certificates of a given Series may be issued in several  
Classes, which may pay interest at different rates, may represent different     
allocations of the right to receive principal and interest, and certain of which
may be subordinated to others. Any such Class of Certificates may also provide  
for payments of principal only or interest only or for disproportionate payments
of principal and interest. Subordinated Classes of a given Series of            
Certificates may or may not be offered by the same Prospectus Supplement as the 
senior Classes of such Series.                                                  

The Certificates will be freely transferable and exchangeable for       
Certificates of the same Series and Class at the office set forth in such       
Certificates, provided, however, that certain Classes of Certificates may be    
subject to transfer restrictions set forth in such Certificates and described in
the applicable Prospectus Supplement. A reasonable service charge may be imposed
for any registration of exchange or transfer of Certificates, and the Company   
may require payment of a sum sufficient to cover any tax or other governmental  
charge. If specified in the applicable Prospectus Supplement, one or more       
Classes of Certificates for any Series may be transferable only on the books of 
The Depository Trust Company or another depository identified in such Prospectus
Supplement.                                                                     

Unless otherwise indicated in the applicable Prospectus Supplement,     
beginning with the month following the month in which the Cut-Off Date occurs   
for a Series of Certificates, distributions of principal and interest (or, where
applicable, principal only or interest only) on each Class of Certificates will 
be made either by the Trustee, the Master Servicer or the Certificate           
Administrator, as applicable, acting on behalf of the Trustee or a paying agent 
appointed by the Trustee (the 'Paying Agent') on the 25th day (or if such 25th  
day is not a business day, the business day immediately following such 25th day)
of each calendar month (the 'Distribution Date') to the persons in whose names  
the Certificates are registered at the close of business on the last business   
day of the month preceding the month in which the Distribution Date occurs (the 
'Record Date'). Distributions for each Series will be made by wire transfer in  
immediately available funds for the account of, or by check mailed to, each     
Certificateholder of record; provided, however, that, unless otherwise specified
in the related Prospectus Supplement, the final distribution in retirement of   
the Certificates for each Class of a Series will be made only upon presentation 
and surrender of the Certificates at the office or agency of the Company or the 
Trustee specified in the notice to Certificateholders of such final             
distribution.                                                                   

ASSIGNMENT OF MORTGAGE LOANS                                                    

The Company will cause the Mortgage Loans to be assigned to the Trustee,
together with all principal and interest on the Mortgage Loans other than       
principal and interest due on or before the Cut-Off Date. The Company or a      
Servicing Entity, as applicable, will expressly reserve its or a Seller's rights
in and to any Retained Yield, which accordingly will not constitute part of the 
Trust Fund. In addition, the applicable Prospectus Supplement may specify that  
the Seller will retain the right to a specified portion of either principal or  
interest, or both. The Trustee will, concurrently with such assignment,         
authenticate and deliver the Certificates or cause the Certificates to be       
authenticated and delivered to the Company or its designated agent in exchange  
for the Trust Fund. Each Mortgage Loan will be identified in a schedule         
appearing as an exhibit to the Pooling Agreement for the related Series. Unless 
otherwise specified in the related Prospectus Supplement, such schedule will    
include information as of the close of business on the Cut-Off Date as to the   
principal balance of each Mortgage Loan, the Mortgage Interest Rate and the     
maturity of each Mortgage Note, the Seller/Servicer's or the Servicer's         
Servicing Fee and whether a Primary Insurance Policy has been obtained for each 
Mortgage Loan.                                                                  

   The Company, a Servicing Entity or a Servicer, as the case may be, will, as
to each Mortgage Loan, deliver or cause to be delivered to the Trustee the      
Mortgage Note, an assignment (except as to any                                  

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Mortgage Loan registered on the MERS'r' System (as defined below) and unless    
otherwise indicated in the applicable Prospectus Supplement) to the Trustee or  
in blank of the Mortgage in a form for recording or filing as may be appropriate
in the state where the Mortgaged Property is located, the original recorded     
Mortgage with evidence of recording or filing indicated thereon and evidence of 
any FHA Insurance Policy or VA Guaranty for such Mortgage Loan, if applicable;  
or, in the case of each Cooperative Loan, the related Cooperative Note, the     
original security agreement, the proprietary lease or occupancy agreement, the  
assignment of proprietary lease, the recognition agreement, the related stock   
certificate and related blank stock powers, and a copy of the original filed    
financing statement together with (unless otherwise indicated in the applicable 
Prospectus Supplement) assignments thereof from the applicable Seller to the    
Trustee in a form sufficient for filing. In certain instances where original    
documents respecting a Mortgage Loan may not be available prior to execution of 
the Pooling Agreement, the Company, such Servicing Entity or such Servicer will 
deliver such documents to the Trustee within 270 days thereafter unless, as set 
forth in the Pooling Agreement, the county recorder has not yet returned such   
Mortgage Loan. Notwithstanding the foregoing, a Trust Fund may include Mortgage 
Loans where the original Mortgage Note is not delivered to the Trustee if the   
Company delivers to the Trustee or the custodian a copy or a duplicate original 
of the Mortgage Note, together with an affidavit certifying that the original   
thereof has been lost or destroyed. With respect to such Mortgage Loans, the    
Trustee (or its nominee) may not be able to enforce the Mortgage Note against   
the related borrower. The Company, such Servicing Entity or such Servicer will  
agree to repurchase or substitute for such a Mortgage Loan in certain           
circumstances (see 'Description of Certificates -- Representations and          
Warranties').                                                                   

With respect to any Mortgage Loan registered on the mortgage electronic 
registration system (the 'MERS'r' System') maintained by MERSCORP, Inc. and/or  
Mortgage Electronic Registration Systems, Inc. or any successor thereto         
('MERS'), an assignment of Mortgage will not be delivered to the Trustee as     
described above, but instead the change in beneficial ownership to the Trustee  
of the Mortgage will be registered electronically through the MERS'r' System in 
accordance with the rules of membership of MERS. MERS will serve as mortgagee of
record with respect to these Mortgage Loans solely as a nominee of the Trustee, 
in an administrative capacity, and will not have any interest in these Mortgage 
Loans.                                                                          

The Trustee will review the mortgage documents within 45 days of receipt
thereof to ascertain that all required documents have been properly executed and
received. The Trustee will hold such documents for each Series in trust for the 
benefit of Certificateholders of such Series. With respect to Series of         
Certificates as to which the Company and/or a Servicing Entity will act as      
Master Servicer, if any document is found by the Trustee not to have been       
properly executed or received or to be unrelated to the Mortgage Loans (or the  
related Mortgage Loan Servicing Group for such Series if both the Company and a 
Servicing Entity are acting as Master Servicers) identified in the Pooling      
Agreement, the Trustee will notify the Company or such Servicing Entity, as     
applicable. If the Company or such Servicing Entity, as applicable, cannot cure 
such defect, the Company or such Servicing Entity, as applicable, will          
substitute a new mortgage loan meeting the conditions set forth in the Pooling  
Agreement (see ' -- Substitution of Mortgage Loans' below) or repurchase the    
related Mortgage Loan from the Trustee at a price equal to 100% of the          
outstanding principal balance of such Mortgage Loan, plus accrued interest      
thereon at the applicable Pass-Through Rate through the last day of the month of
such repurchase. With respect to Series of Certificates as to which there will  
be no Master Servicer, if a defect of the type described in the preceding       
sentence is discovered by the Trustee and cannot be cured by the Seller, the    
Seller will substitute a new mortgage loan or repurchase the related Mortgage   
Loan from the Trustee upon the terms described in the preceding sentence. The   
purchase price of any Mortgage Loan so repurchased will be passed through to    
Certificateholders as liquidation proceeds in accordance with the procedures    
specified under ' -- Distributions on Certificates'. This substitution or       
repurchase obligation constitutes the sole remedy available to the              
Certificateholders or the Trustee for such a defect in a constituent document.  

    Buydown Funds provided by the Sellers or other parties for any Buydown Loans
included in a Mortgage Pool may be deposited on the date of settlement of the   
sale of the Certificates to the original purchasers thereof (the 'Closing Date')
into either (a) a separate account (the 'Buydown Fund Account') maintained (i)  
with the Trustee or another financial institution approved by the Company or    
Servicing Entity, as applicable, as Master Servicer, (ii) within FDIC insured   
accounts (or other insured accounts acceptable to the rating agency or agencies)
held and monitored by a Servicer or (iii) in a separate non-trust account       
without FDIC or other insurance in an institution having the highest unsecured  
long-term debt rating by the rating agency or agencies (or such other           
institution acceptable to the rating agency or                                  

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agencies) or (b) held in a Custodial Account for P&I or a Custodial Account for 
Reserves and monitored by a Servicer. Since Buydown Funds may be funded at      
either the par values of future payment subsidies or funded in an amount less   
than the par values of future payment subsidies and determined by discounting   
such par values in accordance with interest accruing on such values, Buydown    
Fund Accounts may be non-interest-bearing or may bear interest. In no event will
the amount held in any Buydown Fund Account exceed the level of deposit         
insurance covering such account. Accordingly, more than one such account may be 
established.                                                                    

SUBSTITUTION OF MORTGAGE LOANS                                                  

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, the Company or the Servicing      
Entity, as applicable, may substitute an eligible mortgage loan for a defective 
Mortgage Loan (or, if applicable, a Mortgage Loan in its related Mortgage Loan  
Servicing Group) in lieu of repurchasing such defective Mortgage Loan or the    
related Mortgaged Property (a) within three months after the Closing Date for   
the related Series of Certificates, and (b) within two years after such Closing 
Date, if the related Mortgage Loan is a 'defective obligation' within the       
meaning of Section 860G(a)(4)(A)(ii) of the Code. Any mortgage loan, to be      
eligible for substitution, must fit within the general description of the       
Mortgage Loans set forth herein and in the related Prospectus Supplement. With  
respect to Series of Certificates as to which there will be no Master Servicer, 
the Seller or the Servicer, as specified in the related Prospectus Supplement,  
may substitute an eligible mortgage loan for a defective Mortgage Loan in lieu  
of repurchasing such defective Mortgage Loan or the related Mortgaged Property  
in the circumstances and to the extent described in the two preceding sentences.
See 'The Mortgage Pools'.                                                       

REPRESENTATIONS AND WARRANTIES                                                  

Unless otherwise stated in the applicable Prospectus Supplement, in the 
Pooling Agreement for each Series of Certificates as to which the Company will  
act as a Master Servicer, the Company will represent and warrant to the Trustee 
with respect to (a) all Mortgage Loans if it is the only Master Servicer and (b)
the Mortgage Loans in its Mortgage Loan Servicing Group if both the Company and 
a Servicing Entity are acting as Master Servicers, among other things, that (i) 
the information set forth in the schedule of Mortgage Loans is true and correct 
in all material respects; (ii) except in the case of Cooperative Loans, a       
lender's title policy (or other satisfactory evidence of title) was issued on   
the date of the origination of each Mortgage Loan and each such policy or other 
evidence of title is valid and remains in full force and effect; (iii) if a     
Primary Insurance Policy, FHA Insurance Policy or VA Guaranty is required with  
respect to such Mortgage Loan, such policy or guaranty is valid and remains in  
full force and effect as of the Closing Date; (iv) immediately upon the transfer
and assignment of the Mortgage Loans to the Trust, the Trustee will have good   
title to the Mortgage Loans; (v) as of the Closing Date, the Mortgage Notes are 
subject to no offsets, defenses or counterclaims, except to the extent that the 
buydown agreement for a Buydown Loan forgives certain indebtedness of a         
Mortgagor; (vi) except in the case of Cooperative Loans, as of the Closing Date,
each Mortgage is a valid first lien on an unencumbered estate in fee simple or  
leasehold interest in the Mortgaged Property (subject only to (a) liens for     
current real property taxes and special assessments, (b) covenants, conditions  
and restrictions, rights of way, easements and other matters of public record as
of the date of recording of such Mortgage, such exceptions appearing of record  
being acceptable to mortgage lending institutions generally or specifically     
reflected in the mortgage originator's appraisal, (c) exceptions set forth in   
the title insurance policy covering such Mortgaged Property and (d) 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); (vii) as of the Closing Date, each Mortgaged Property is free of     
damage and is in good repair, except for ordinary wear and tear; (viii) as of   
the time each Mortgage Loan was originated, the Mortgage Loan complies with all 
applicable state and federal laws, including usury, equal credit opportunity,   
disclosure and recording laws; (ix) as of the Closing Date, there are no        
delinquent tax or assessment liens against any Mortgaged Property; and (x)      
unless otherwise specified in the related Prospectus Supplement, each Mortgage  
Loan was originated and will be serviced by (a) an institution which is a member
of the Federal Reserve System or the deposits of which are insured by the FDIC, 
(b) an institution which is a member of the                                     

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Federal Home Loan Bank System, (c) an institution which is a FHA-Approved       
Mortgagee, (d) an institution which is a Fannie Mae Approved Mortgagee, or (e)  
an institution which is a Freddie Mac Approved Mortgagee. The applicable        
Prospectus Supplement and Pooling Agreement may set forth additional            
representations and warranties of the Company. In addition, with respect to any 
Mortgage Loan as to which the Company delivers to the Trustee or the custodian  
an affidavit certifying that the original Mortgage Note has been lost or        
destroyed, if such Mortgage Loan subsequently is in default and the enforcement 
thereof or of the related Mortgage is materially adversely affected by the      
absence of the original Mortgage Note, the Company will be obligated to         
repurchase or substitute for such Mortgage Loan in the manner described below.  
However, the Company will not be required to repurchase or substitute for any   
Mortgage Loan as described above if the circumstances giving rise to such       
requirement also constitute fraud in the origination of the related Mortgage    
Loan.                                                                           

If the Mortgage Loans include Cooperative Loans, representations and    
warranties with respect to title insurance or hazard insurance will not be      
given. Generally, a Cooperative itself is responsible for the maintenance of    
hazard insurance for property owned by such Cooperative, and the borrowers      
(tenant-stockholders) of such Cooperative do not maintain hazard insurance on   
their individual dwelling units. Title insurance is not obtained for Cooperative
Loans because such loans are not secured by real property. See 'Certain Legal   
Aspects of the Mortgage Loans -- Cooperative Loans'.                            

   With respect to Series of Certificates as to which the Company will not act
as a Master Servicer, the Seller or the Servicing Entity, as applicable, which  
sold the Mortgage Loans to the Company for inclusion in the Trust Fund will make
representations and warranties to the Company with respect to such Mortgage     
Loans substantially similar to those indicated in the second preceding          
paragraph, and the Company will assign such representations and warranties to   
the Trustee and the Certificateholders under the Pooling Agreement. The         
applicable Prospectus Supplement and Pooling Agreement may set forth additional 
representations and warranties of the Seller, the Servicing Entity and/or the   
Company.                                                                        

 In the event of the discovery by the Company, the Servicing Entity or the
Servicer of a breach of any representation or warranty which materially and     
adversely affects the interest of the Certificateholders in the related Mortgage
Loan, or the receipt of notice of such a breach from the Trustee, the Company,  
the Servicing Entity or the Seller, as the case may be, will cure the breach,   
substitute a new mortgage loan for such Mortgage Loan or repurchase such        
Mortgage Loan, or any Mortgaged Property acquired with respect thereto, on the  
terms set forth above under ' -- Assignment of Mortgage Loans'. The proceeds of 
any such repurchase will be passed through to Certificateholders as liquidation 
proceeds. This substitution or repurchase obligation constitutes the sole remedy
available to the Certificateholders or the Trustee for any such breach.         

 Under the Pooling Agreement, the Company or a Servicing Entity, as Master
Servicer, or the Servicer with respect to Series of Certificates for which there
will be no Master Servicer, will have the right, but not the obligation, to     
purchase any Mortgage Loan (or, if applicable, Mortgage Loan in the Company's or
Servicing Entity's Mortgage Loan Servicing Group), subject to the limitations   
set forth in the Pooling Agreement, from the applicable Mortgage Pool in the    
event that such Mortgage Loan becomes 90 days or more delinquent; provided, that
the aggregate purchase price of the Mortgage Loans so repurchased (as set forth 
in the Pooling Agreement) shall not exceed one-half of one percent (0.50%) of   
the aggregate Principal Balance of all Mortgage Loans as of the Cut-Off Date.   

SERVICING                                                                       

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, pursuant to the Pooling Agreement 
the Company or Servicing Entity, as applicable, as Master Servicer, will be     
responsible for servicing and administering the Mortgage Loans, or the Mortgage 
Loans in its respective Mortgage Loan Servicing Group, as applicable, but will  
be permitted to contract with the Seller/Servicer from whom each Mortgage Loan  
was purchased, or another eligible servicing institution, to perform such       
functions under the supervision of the Master Servicer as more fully described  
below.                                                                          

In the contract pursuant to which each Seller/Servicer will perform its 
servicing duties, which contract will generally be the Selling and Servicing    
Contract, each Seller/Servicer will agree, subject to the general supervision of
the Company or Servicing Entity, as applicable, as Master Servicer, or its      
respective agent,                                                               

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to perform diligently all services and duties customary to the servicing of     
mortgage loans. Such Master Servicer or its agent will monitor each             
Seller/Servicer's performance and, unless otherwise specified in the applicable 
Prospectus Supplement, such Master Servicer will have the right to remove and   
substitute a replacement Seller/Servicer at any time if it considers such       
removal to be in the best interest of Certificateholders. The duties performed  
by the Seller/Servicers include collection and remittance of principal and      
interest payments, administration of mortgage escrow accounts, collection of    
insurance claims and, if necessary, foreclosure. In the event a Selling and     
Servicing Contract is terminated by the Company or Servicing Entity, as         
applicable, as Master Servicer, for any reason, such Master Servicer may procure
a substitute Seller/Servicer, which may be an affiliate of such Master Servicer.
During the period necessary to effect the execution and implementation of a     
contract with such substitute Seller/Servicer, all duties and responsibilities  
of the Seller/Servicer under the terminated Selling and Servicing Contract will 
be performed by such Master Servicer. In such event, such Master Servicer will  
be entitled to retain the same Servicing Fee as was paid to the Seller/Servicer 
under such terminated Selling and Servicing Contract.                           

  With respect to Series of Certificates as to which there will be no Master
Servicer, pursuant to the Pooling Agreement the servicing of the Mortgage Loans 
will be performed by the Servicer, and the Company (as Certificate              
Administrator) will calculate amounts distributable to the Certificateholders,  
prepare tax returns on behalf of the Trust Fund and provide certain other       
administrative services specified in the Pooling Agreement. With respect to a   
Series as to which the Company and the Servicing Entity will act as Master      
Servicers, unless otherwise specified in the applicable Prospectus Supplement,  
the Company will also act as the Certificate Administrator. Unless otherwise    
specified in the related Prospectus Supplement, with respect to a Series as to  
which a Servicing Entity is the only Master Servicer, such Servicing Entity     
shall act as the Certificate Administrator. The Servicer will generally perform 
the same services and duties as a Seller/Servicer under a Selling and Servicing 
Agreement, as well as certain services of a Master Servicer described herein.   
The Trustee or its agent will monitor the Servicer's performance and, unless    
otherwise specified in the applicable Prospectus Supplement, the Trustee will   
have the right to remove and substitute a replacement servicer, which may be the
Company or an affiliate of the Company, to assume the servicing obligations of  
the Servicer at any time if it considers such removal to be in the best         
interests of Certificateholders. During the period necessary to effect the      
execution and implementation of a contract with such substitute servicer,       
certain duties and responsibilities of the Servicer under the Pooling Agreement 
will be performed by the Trustee. In such event, the Trustee will be entitled to
retain the same Servicing Fee as was to be paid the Servicer under the Pooling  
Agreement. The obligation of the Trustee or a replacement servicer to perform   
the servicing duties of the Servicer will not, however, require such party to   
cure any defect with respect to any Mortgage Loan, or substitute a new mortgage 
loan for or repurchase a Mortgage Loan as to which there has been a breach of a 
representation or warranty made by the Seller or to cure any breach of a        
servicing covenant made by the former Servicer.                                 

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, each Seller/Servicer will retain  
as its Servicing Fee a portion of the interest payable on each Mortgage Loan    
serviced by it. The Servicing Fee will be established by the Company or a       
Servicing Entity, as applicable, either as a fixed rate or as a rate calculated 
as the difference between interest at the Mortgage Interest Rate and interest at
the rate required to be passed through to the Company or Servicing Entity, as   
applicable, as Master Servicer (the 'Net Rate'). Unless otherwise set forth in  
the applicable Prospectus Supplement, the Servicing Fee will be no less than    
0.25% per annum for each individual Mortgage Loan serviced. In addition, unless 
otherwise set forth in the Prospectus Supplement, the Seller/Servicer will      
retain late charges, assumption fees and similar charges to the extent collected
from Mortgagors. The Company expects that such fees and charges will be         
negligible in amount. Unless otherwise provided in the applicable Prospectus    
Supplement, each of the Company and Servicing Entity, as applicable, as Master  
Servicer, will retain as its Master Servicing Fee an amount which will be       
calculated as a per annum percentage for each Mortgage Loan plus an amount      
calculated to reimburse the Company or Servicing Entity, as applicable, as      
Master Servicer, for the expenses required to be borne by it, which, unless     
otherwise set forth in the applicable Prospectus Supplement, will include the   
Trustee's fees and premiums on or other expenses relating to any Mortgage Pool  
Insurance Policy and/or other credit enhancements.                              

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  With respect to Series of Certificates as to which there will be no Master
Servicer, the Servicer will receive a Servicing Fee, as established in the      
applicable Pooling Agreement, which, unless otherwise indicated in the          
applicable Prospectus Supplement, will be no less than 0.25% per annum for each 
individual Mortgage Loan serviced and with respect to each such Series and each 
Series as to which both the Company and a Servicing Entity are acting as Master 
Servicers, the Certificate Administrator will retain as its Certificate         
Administrator Fee an amount which will be calculated as a per annum percentage  
for each Mortgage Loan plus an amount calculated to reimburse the Certificate   
Administrator for payment by it of the Trustee's fees.                          

RETAINED YIELD                                                                  

    For certain Series, the Company, a Servicing Entity or a Seller may retain a
portion of the interest payable on each Mortgage Loan (the 'Retained Yield').   
The Retained Yield will either be set as a fixed rate or will be calculated by  
subtracting the Master Servicing Fee and the Certificate Interest Rate from the 
Net Rate or, if applicable, by subtracting the Servicing Fee, the Certificate   
Administrator Fee and the Certificate Interest Rate from interest at the        
Mortgage Interest Rate. Unless otherwise specified in the applicable Prospectus 
Supplement, any such Retained Yield and any earnings from reinvestments thereof 
will not be part of the Trust Fund. The Company, the Servicing Entity or the    
Seller, as the case may be, may at its option transfer to a third party all or a
portion of the Retained Yield for a Series of Certificates.                     

PAYMENTS ON MORTGAGE LOANS; CUSTODIAL ACCOUNTS FOR P&I,                         
INVESTMENT ACCOUNT, CERTIFICATE ACCOUNT AND RESERVE ACCOUNT                     

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, pursuant to the Servicing Contract
each Seller/Servicer will agree to establish and maintain for the Master        
Servicer (or for the related Master Servicer if both the Company and a Servicing
Entity are acting as Master Servicers for such Series) a special custodial      
account for principal and interest (the 'Custodial Account for P&I'), into which
it will deposit on a daily basis (unless otherwise specified in the applicable  
Prospectus Supplement) the following payments and collections received          
subsequent to the Cut-Off Date (other than payments due on or before the Cut-Off
Date) with respect to the Mortgage Loans serviced by it:                        

(i) All payments on account of principal and interest, including
Principal Prepayments;                                                  

    (ii) All net proceeds received in connection with the liquidation of
   defaulted Mortgage Loans, by foreclosure or otherwise (hereinafter referred
  to as 'Liquidation Proceeds'), or under any applicable credit enhancements
    or title, hazard or other insurance policy covering any Mortgage Loan, other
than proceeds to be applied to the restoration or repair of the related 
Mortgaged Property (hereinafter referred to as 'Insurance Proceeds');   

       (iii) Any Advances of such Seller/Servicer's funds (such Advances to be
deposited prior to the Withdrawal Date, as defined below); and          

       (iv) All proceeds of any Mortgage Loans or property acquired in respect
thereof repurchased as required for defects in documentation, breach of 
representations or warranties, or otherwise.                            

   Each Seller/Servicer has the option of either (i) depositing gross interest
collections in the Custodial Account for P&I, subject to withdrawal of its      
related Servicing Fees, or (ii) deducting its Servicing Fees from gross interest
collections prior to deposit in such account.                                   

On the Withdrawal Date or, with the Master Servicer's approval (or the  
related Master Servicer if both the Company and a Servicing Entity are acting as
Master Servicers), on a daily basis, each Seller/Servicer may withdraw the      
following amounts from its Custodial Account for P&I:                           

     (i) Amounts received on particular Mortgage Loans as late payments of
  principal or interest and respecting which the Seller/Servicer has made an
unreimbursed Advance;                                                   

     (ii) Amounts to reimburse the Seller/Servicer for Advances the Master
    Servicer (or the related Master Servicer if both the Company and a Servicing
Entity are acting as Master Servicers) has determined to be otherwise   
nonrecoverable; and                                                     

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(iii) Amounts in respect of Servicing Fees previously deposited.

 The Company and/or the Servicing Entity, as applicable, will require that
deposits in each Custodial Account for P&I be held (a) in a trust account in the
corporate trust department of the Trustee or another financial institution      
approved by the Company or Servicing Entity, as applicable, as Master Servicer, 
such that the rights of the Company or Servicing Entity, as applicable, as      
Master Servicer, the Trustee and the Certificateholders will be fully protected 
against the claims of any creditors of the Servicer and of any creditors or     
depositors of the institution in which such account is maintained, (b) in FDIC  
insured accounts (or other accounts with comparable insurance coverage          
acceptable to the rating agency or agencies) created maintained and monitored by
a Servicer or (c) in a separate non-trust account without FDIC or other         
insurance in an institution having an unsecured long-term debt rating of at     
least one of the two highest unsecured long-term debt ratings of the rating     
agency or agencies (or such other institution acceptable to the rating agency or
agencies). If a Custodial Account for P&I is insured by the FDIC and at any time
the amount in such account exceeds the limits of insurance on such account, the 
Seller/Servicer shall be required to withdraw such excess from such account and 
remit it to the Company or Servicing Entity, as applicable, for deposit in the  
Investment Account described below.                                             

 With respect to Series of Certificates as to which the Company and/or the
Servicing Entity, as applicable, will act as Master Servicer and unless         
otherwise specified in the related Prospectus Supplement, not later than the    
20th day of each month (or the preceding business day if such 20th day is not a 
business day) (the 'Withdrawal Date'), the Company or Servicing Entity, as      
applicable, will withdraw or direct the withdrawal from any funds in the        
Custodial Account for P&I maintained by each related Seller/Servicer an amount  
representing:                                                                   

    (i) Scheduled installments of principal and interest on the Mortgage
Loans received or advanced by such Seller/Servicer which were due on the
first day of the current month, net of Servicing Fees due the           
    Seller/Servicer and less any amounts to be withdrawn later by the Company or
  Servicing Entity, as applicable, from any applicable Buydown Fund Account;

(ii) Proceeds of liquidations of Mortgage Loans received by the 
  Seller/Servicer in the immediately preceding calendar month, with interest
  to the date of liquidation, net of Servicing Fees due such Seller/Servicer
and less any amounts to be withdrawn later by the Company or Servicing  
Entity, as applicable, from any applicable Buydown Fund Account;        

       (iii) Principal due to Payoffs received during the period from the 15th
of the immediately preceding calendar month through the 14th of such    
 calendar month; in each case with interest at the applicable Pass-Through
   Rate attributable to interest paid by the Mortgagor through the date of the
   Payoff (provided, however, that in the case of Payoffs received between the
    first day and the 14th day of any month, interest accrued from the first day
of such month to the date of such Payoff will not be paid to the        
  Certificateholders), less any amounts to be withdrawn later by the Company
or Servicing Entity, as applicable, from any applicable Buydown Fund    
Account; and                                                            

   (iv) Curtailments received by such Seller/Servicer on such Mortgage
Loans in the immediately preceding calendar month.                      

    All amounts withdrawn from the Custodial Accounts for P&I, together with any
Insurance Proceeds or Liquidation Proceeds (including any amounts paid in       
respect of repurchase obligations on defective Mortgage Loans or otherwise) not 
otherwise applied by Seller/Servicers and amounts withdrawn from any Buydown    
Fund Account, if applicable, shall be immediately deposited into the Investment 
Account (or if both the Company and a Servicing Entity are acting as Master     
Servicers, the related Investment Account).                                     

   Under the Pooling Agreement for each Series of Certificates as to which the
Company will act as Master Servicer, the Master Servicer or the related         
Seller/Servicer is permitted to make the following withdrawals from the Buydown 
Fund Account or Custodial Account for P&I, as applicable:                       

      (i) To deposit in the Investment Account the amount necessary in order
to supplement payments received on Buydown Loans;                       

(ii) In the event of a Payoff of any Buydown Loan, to apply the 
    remaining related Buydown Funds to reduce the required amount of such Payoff
(or, if the Mortgagor has made a Payoff equal                           

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 in amount to the total unpaid principal balance, to refund such remaining
Buydown Funds to the person entitled to receive such Buydown Funds);    

        (iii) In the event of foreclosure or liquidation of any Buydown Loan, to
  deposit the remaining related Buydown Funds in the Investment Account; and

   (iv) To clear and terminate the portion of any account representing
Buydown Funds.                                                          

Unless otherwise specified in the applicable Prospectus Supplement, the 
Company or Servicing Entity, as applicable, as Master Servicer, may invest funds
withdrawn from the Custodial Accounts for P&I each month and remitted to the    
related Master Servicer, as well as any Insurance Proceeds, Liquidation Proceeds
and Buydown Funds, for its own account and at its own risk, for the period from 
the Withdrawal Date to the next Distribution Date, or for such longer or shorter
period as may be specified in the applicable Prospectus Supplement (in each     
case, the 'Investment Period'). Notwithstanding the foregoing, in the event that
both the Company and a Servicing Entity are acting as Master Servicers with     
respect to any Series, each of the Company and such Servicing Entity may only   
invest funds described in the preceding sentence to the extent that such funds  
relate to Mortgage Loans in its respective Mortgage Loan Servicing Group.       
Investment of such funds shall be made through an account in the name of the    
Company or Servicing Entity, as applicable, as Master Servicer, and the Trustee 
(an 'Investment Account') (or, if both the Company and a Servicing Entity are   
acting as Master Servicers, to the extent that such funds relate to Mortgage    
Loans in its respective Mortgage Loan Servicing Group), which shall be          
maintained in the trust department of a bank acceptable to any applicable rating
agency or agencies for the Series of Certificates. The Investment Account may be
a commingled account with other similar accounts maintained by the Company or   
Servicing Entity, as applicable, as Master Servicer, and invested for its own   
account; provided, that the maintenance of such a commingled account has been   
approved by any applicable rating agency or agencies for the Series of          
Certificates. Unless otherwise specified in the applicable Prospectus           
Supplement, the investment of funds in the Investment Account shall be limited  
to the investments described below.                                             

  On the last day of the Investment Period, the Company or Servicing Entity,
as applicable, as Master Servicer, will withdraw from the Investment Account    
(or, if both the Company and a Servicing Entity are acting as Master Servicers, 
the related Investment Account) all funds due to be distributed to              
Certificateholders, and shall deposit such funds, together with any Advances    
required to be made by it, in the Certificate Account described below.          

Unless otherwise specified in the applicable Prospectus Supplement, the 
investment of funds in an Investment Account shall be limited to one or more of 
the following investments ('Eligible Investments') which shall in no event      
mature later than the next Distribution Date:                                   

      (i) Obligations of, or guaranteed as to principal and interest by, the
United States or any agency or instrumentality thereof, when such       
 obligations are backed by the full faith and credit of the United States;

 (ii) Repurchase agreements on obligations of, or guaranteed as to
principal and interest by, the United States or any agency or           
   instrumentality thereof, when such obligations are backed by the full faith
   and credit of the United States; provided that the unsecured obligations of
  the party agreeing to repurchase such obligations are at the time assigned
   such ratings as may be required by the applicable rating agency or agencies
for the Series of Certificates at the date of acquisition thereof;      

        (iii) Federal funds, certificates of deposit, time deposits and bankers'
   acceptances of any bank or trust company incorporated under the laws of the
 United States or any state thereof; provided that the debt obligations of
   such bank or trust company (or, in the case of the principal bank in a bank
  holding company system, debt obligations of the bank holding company) have
been assigned such ratings as may be required by the applicable rating  
agency or rating agencies for the Series of Certificates at the date of 
acquisition thereof;                                                    

        (iv) Obligations of, or guaranteed by, any state of the United States or
the District of Columbia receiving the highest long-term debt ratings   
available for such securities by the applicable rating agency or rating 
agencies for the Series of Certificates;                                

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      (v) Commercial paper of any corporation incorporated under the laws of
   the United States or any state thereof which on the date of acquisition has
been assigned such ratings as may be required by the applicable rating  
agency or rating agencies for the Series of Certificates; or            

       (vi) Securities (other than stripped bonds or stripped coupons) bearing
interest or sold at a discount that are issued by any corporation       
 incorporated under the laws of the United States or any state thereof and
   rated by each applicable rating agency or rating agencies for the Series of
  Certificates in its highest long-term unsecured rating category; provided,
however, that securities issued by any such corporation will not be     
investments to the extent that investment therein would cause the       
  outstanding principal amount of securities issued by such corporation that
  are then held as part of the Investment Account or the Certificate Account
   to exceed 20% of the aggregate principal amount of all Eligible Investments
then held in the Investment Account and the Certificate Account;        

       (vii) Units of taxable money market funds or mutual funds (which may be
  12b-1 funds, as contemplated under the rules promulgated by the Commission
 under the Investment Company Act of 1940), which funds have been rated by
each applicable rating agency or rating agencies for the Series of      
    Certificates in its highest rating category or which have been designated in
writing by each such rating agency or rating agencies as Eligible       
Investments with respect to this definition; or                         

  (viii) such other investments the investment in which will not, as
   evidenced by a letter from each applicable rating agency or rating agencies
  for the Series of Certificates, result in the downgrading or withdrawal of
   the rating or ratings assigned to the Certificates by such rating agency or
rating agencies.                                                        

Not later than the Distribution Date for a Series of Certificates as to 
which the Company and/or a Servicing Entity will act as Master Servicer, the    
Company or Servicing Entity, as applicable, will withdraw from the Investment   
Account (or, if both the Company and a Servicing Entity are acting as Master    
Servicers, the related Investment Account) all amounts required to be           
distributed on such Distribution Date and deposit such amounts into a separate  
non-interest-bearing trust account (the 'Certificate Account') in the corporate 
trust department of the Trustee or another depository institution acceptable to 
the applicable rating agency or rating agencies.                                

   Under the Pooling Agreement for each Series of Certificates as to which the
Company and/or a Servicing Entity will act as Master Servicer, the Company or   
Servicing Entity, as applicable, will be authorized to make the following       
withdrawals from the Certificate Account (provided, however, that if both the   
Company and a Servicing Entity are acting as Master Servicers, each of the      
Company's and Servicing Entity's right to any such withdrawals will be limited  
to proceeds received in respect of Mortgage Loans in its respective Mortgage    
Loan Servicing Group):                                                          

   (i) To reimburse the Company or Servicing Entity, as applicable, as
 Master Servicer, or the applicable Servicer for Advances made pursuant to
   the Pooling Agreement or a Selling and Servicing Contract, the Company's or
 Servicing Entity's right to reimburse itself or such Servicer pursuant to
   this paragraph (i) being limited to amounts received on particular Mortgage
Loans (including, for this purpose, Insurance Proceeds and Liquidation  
Proceeds) which represent late recoveries of principal and/or interest  
respecting which any such Advance was made;                             

    (ii) To reimburse the Company or Servicing Entity, as applicable, as
  Master Servicer, or the applicable Servicer for amounts expended by or for
the account of the Company or Servicing Entity, as applicable, as Master
Servicer, pursuant to the Pooling Agreement or amounts expended by such 
   Servicer pursuant to the Selling and Servicing Contracts in connection with
    the restoration of property damaged by an Uninsured Cause (as defined in the
    Pooling Agreement) or in connection with the liquidation of a Mortgage Loan;

  (iii) To pay to the Company or Servicing Entity, as applicable, as
Master Servicer, the Master Servicing Fee, net of Compensating Interest 
    reduced by Payoff Earnings and Payoff Interest (each as defined herein or in
the Pooling Agreement), as to which no prior withdrawals from funds     
deposited by the Master Servicer have been made;                        

    (iv) To reimburse the Company or Servicing Entity, as applicable, as
  Master Servicer, or the applicable Servicer for advances which the Company
or Servicing Entity, as applicable, has determined to be Nonrecoverable 
Advances;                                                               

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       (v) To pay to the Company or Servicing Entity, as applicable, as Master
Servicer, reinvestment earnings deposited or earned in the Certificate  
Account (net of reinvestment losses) to which the Company or Servicing  
    Entity, as applicable, is entitled and to reimburse the Company or Servicing
Entity, as applicable, for expenses incurred by and reimbursable to the 
Company or Servicing Entity, as applicable, pursuant to the Pooling     
Agreement;                                                              

      (vi) To deposit amounts in the Investment Account representing amounts
    in the Certificate Account not required to be on deposit therein at the time
of such withdrawal; and,                                                

after making or providing for the above withdrawals,                    

        (vii) To clear and terminate the Certificate Account upon liquidation of
all Mortgage Loans or other termination of the Trust Fund.              

   Each of the Company and Servicing Entity, as applicable, may also establish
with the Trustee for a Series of Certificates as to which it is acting as a     
Master Servicer a Reserve Account if required to assure timely distributions of 
principal and interest, as a condition to obtaining a specified rating for such 
Certificates or to provide for the expenses of the Trust Fund. Any such Reserve 
Account so established will be described in the applicable Prospectus           
Supplement.                                                                     

  With respect to Series of Certificates as to which there will be no Master
Servicer, unless otherwise specified in the applicable Prospectus Supplement,   
the Custodial Account for P&I, the Buydown Fund Account and the Reserve Account 
will be established by the Servicer, and the required and permitted deposits    
into and withdrawals from such accounts set forth above will be made by the     
Servicer. The Servicer shall deposit any required Advances in the Custodial     
Account for P&I on the Withdrawal Date. The withdrawal of funds and their       
deposit into the Investment Account on the Withdrawal Date, as described above, 
will also be effected by the Servicer. The Investment Account described above   
will be established by the Certificate Administrator and the Trustee, and       
investments of amounts therein in Eligible Investments will be directed by the  
Certificate Administrator for its own account and at its own risk. The          
Certificate Administrator will make the required withdrawal from the Investment 
Account on the last day of the Investment Period for deposit in the Certificate 
Account, as described above. Authorized withdrawals from the Certificate Account
for the purposes described above will be made by the Certificate Administrator. 
Other than as set forth in this paragraph, unless the context otherwise         
requires, references above to 'Master Servicer' or 'Seller/Servicer', and to    
'Master Servicing Fee' shall refer instead to 'Servicer' and 'Servicing Fee',   
respectively.                                                                   

DISTRIBUTIONS ON CERTIFICATES                                                   

    For each Series, on each Distribution Date commencing in the month following
the month in which the Cut-Off Date occurs (or such other time as may be set    
forth in the applicable Prospectus Supplement), the Trustee, the Master Servicer
(if there will be only one Master Servicer) or the Certificate Administrator, as
applicable, acting on behalf of the Trustee or the Paying Agent will withdraw   
from the Certificate Account and distribute to Certificateholders of record on  
the applicable Record Date, and to holders of residual interests, if any, who   
are entitled to receive such distributions pursuant to the terms of the         
applicable Pooling Agreement, to the extent of their entitlement thereto, an    
amount in the aggregate equal to the sum of:                                    

        (i) All scheduled payments of principal and interest at the Pass-Through
    Rate either collected from the Mortgagors on the Mortgage Loans prior to the
   related Determination Date (as defined below) or advanced by the Company or
Servicing Entity, as applicable, the Servicer or the Seller/Servicers;  

     (ii) Scheduled amounts of Buydown Funds respecting Buydown Loans (not
 withdrawn and remitted by the Servicer or the related Seller/Servicer, as
applicable);                                                            

        (iii) All Curtailments received on the Mortgage Loans in the month prior
to the month in which the Distribution Date occurs (the 'Distribution   
Period');                                                               

       (iv) All Insurance Proceeds or Liquidation Proceeds received during the
  Distribution Period, together with interest at the applicable Pass-Through
    Rate to the extent described herein under 'Yield Considerations -- Effective
Interest Rate'; and                                                     

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   (v) All Payoffs received during the period from the 15th day of the
  immediately preceding calendar month through the 14th day of such calendar
 month; in each case together with interest at the applicable Pass-Through
Rate to the extent described under 'Yield Considerations -- Effective   
Interest Rate' herein;                                                  

less the sum of:                                                        

     (a) Previously unreimbursed Advances made by the Company or Servicing
Entity, as applicable, as Master Servicer, the Seller/Servicers or the  
 Servicer on Mortgage Loans which are considered by the Master Servicer or
the Servicer, as the case may be, as of the Distribution Date to be     
nonrecoverable;                                                         

      (b) Amounts expended by the Seller/Servicers, the Company or Servicing
    Entity, as applicable, as Master Servicer or the Servicer in connection with
 the preservation or restoration of property securing Mortgage Loans which
have been liquidated and related liquidation expenses; and              

   (c) Amounts representing other expenses of the Master Servicer, the
Seller/Servicers or the Servicer, reimbursable pursuant to the Pooling  
Agreement;                                                              

provided, however, that in the event that both the Company and a Servicing      
Entity are acting as Master Servicers for any Series, any amounts retained on   
behalf of any of the Company, such Servicing Entity or a related Seller/Servicer
pursuant to clauses (a), (b) and (c) above shall be limited to amounts received 
in respect of any Mortgage Loans in its related Mortgage Loan Servicing Group.  

  In addition, if the Master Servicer with respect to Series of Certificates
as to which the Company and/or a Servicing Entity will act as Master Servicer,  
or the Servicer with respect to Series of Certificates as to which there will be
no Master Servicer, is obligated to do so under the applicable Pooling          
Agreement, such Master Servicer or the Servicer, as the case may be, shall      
include with any such distribution an Advance equal to principal payments and   
interest payments (adjusted to the applicable Pass-Through Rate or Rates) due on
the first day of the month in which the Distribution Date occurs and not        
received as of the close of business on the Withdrawal Date, subject to such    
Master Servicer's or Servicer's determination that such payments are recoverable
from future payments or collections on the Mortgage Loans, any subordination    
feature or Insurance Proceeds or Liquidation Proceeds. See ' -- Advances' below.

  The method of allocating the amount withdrawn from the Certificate Account
on each Distribution Date to principal and interest (or, where applicable, to   
principal only or interest only) on a particular Series of Certificates will be 
described in the applicable Prospectus Supplement. Distributions of interest on 
each Class of Certificates will be made prior to distributions of principal     
thereon. Each Class of Certificates may have a different Certificate Interest   
Rate, and each Certificate Interest Rate may be fixed, variable or adjustable.  
The applicable Prospectus Supplement will specify the Certificate Interest Rate 
for each Class, or in the case of a variable or adjustable Certificate Interest 
Rate, the initial Certificate Interest Rate and the method for determining the  
Certificate Interest Rate.                                                      

On each Distribution Date for a Series of Certificates, the Trustee, the
Master Servicer (if there will be only one Master Servicer) or the Certificate  
Administrator, as applicable, on behalf of the Trustee or the Paying Agent, as  
the case may be, will distribute to each holder of record on the Record Date, an
amount equal to the Percentage Interest (as defined below) represented by the   
Certificate held by such holder multiplied by the sum of the Class Principal    
Distribution Amount (as defined below) for such Class and, if such Class is     
entitled to payments of interest on such Distribution Date, one month's interest
at the applicable Certificate Interest Rate on the principal balance or notional
principal balance of such Class specified in the applicable Prospectus          
Supplement, less (unless otherwise specified in the related Prospectus          
Supplement) such Class's pro rata share of the sum of (i) the shortfalls in     
collections of interest on Payoffs with respect to which distribution is to be  
made on such Distribution Date, if any, (ii) the amount of any deferred interest
added to the principal balance of the Mortgage Loans and/or the outstanding     
balance of the Certificates on the related Due Date, (iii) one month's interest 
at the applicable Pass-Through Rate on the amount of any Curtailments received  
on the Mortgage Loans in the month preceding the month of the distribution and  
(iv) any other interest shortfalls (including, without limitation, shortfalls   
arising out of application of the Soldiers' and Sailors' Relief Act or similar  
legislation or regulations as in effect from time to time) allocable to         
Certificateholders which are not covered by advances or applicable              

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credit enhancements, in each case in such amount as is allocated to such Class  
on the basis set forth in the related Prospectus Supplement. The 'Percentage    
Interest' represented by a Certificate of a particular Class will be equal to   
the percentage obtained by dividing the initial principal balance or notional   
amount of such Certificate by the aggregate initial amount or notional amount of
all the Certificates of such Class. The 'Class Principal Distribution Amount'   
for a Class of Certificates for any Distribution Date will be the portion, if   
any, of the Principal Distribution Amount (as defined in the related Prospectus 
Supplement) allocable to such Class for such Distribution Date, as described in 
the related Prospectus Supplement.                                              

  In the case of a Series of Certificates which includes two or more Classes
of Certificates, the timing, sequential order, priority of payment or amount of 
distributions in respect of principal, and any schedule or formula or other     
provisions applicable to the determination thereof with respect to each such    
Class shall be as provided in the related Prospectus Supplement. Distributions  
in respect of principal of any Class of Certificates will be made on a pro rata 
basis among all of the Certificates of such Class.                              

 With respect to Series of Certificates as to which there will be only one
Master Servicer and except as otherwise provided in the applicable Pooling      
Agreement, not later than the tenth day preceding each Distribution Date (the   
'Determination Date'), such Master Servicer will furnish to the Trustee (and to 
any Certificateholder upon request) a statement setting forth the aggregate     
amount to be distributed on such Distribution Date to each Class of             
Certificates, on account of principal and/or interest, stated separately. With  
respect to Series of Certificates as to which there will be no Master Servicer, 
or as to which both the Company and a Servicing Entity will act as Master       
Servicers, the Certificate Administrator will provide the statements described  
in the preceding sentence.                                                      

REPORTS TO CERTIFICATEHOLDERS                                                   

For each Series of Certificates, with each distribution to              
Certificateholders from the Certificate Account, the Trustee, or the Master     
Servicer (if there will be only one Master Servicer) or Certificate             
Administrator, as applicable, on behalf of the Trustee, will forward to each    
Certificateholder or publish electronically a statement or statements with      
respect to the related Trust Funds setting forth the information specifically   
described in the related Pooling Agreement, which generally will include the    
following with respect to such Series of Certificates:                          

 (i) the beginning principal balance or notional principal balance
representing the ending balance from the prior statement;               

(ii) the amount, if any, of such distribution principal;        

       (iii) the amount, if any, of such distribution allocable to interest on
the Mortgage Loans accrued at the applicable Pass-Through Rate on the   
    beginning principal balance or notional principal balance, and, with respect
to a Series of Certificates where one or more Classes of such Series are
subordinated in right of payment to one or more other Classes of such   
  Series, the amount, if any, of any shortfall in the amount of interest and
principal distributed;                                                  

(iv) the total amount distributed;                              

        (v) the ending principal balance or notional principal balance after the
application in (ii) above; and                                          

(vi) the then applicable Pass-Through Rate or weighted average  
Pass-Through Rate, calculated as of the close of business on the related
Determination Date.                                                     

 Upon request, a Certificateholder may receive a monthly report which sets
forth (i) the amount of the distribution for such month allocable to Principal  
Prepayments, miscellaneous post-liquidation collections and Conversion Fees,    
(ii) Mortgage Loan delinquencies, indicating the number and aggregate principal 
amount of Mortgage Loans delinquent one, two and three months, as well as the   
book value of any Mortgaged Property acquired through foreclosure, deed in lieu 
of foreclosure or other exercise of rights respecting the Trustee's security    
interest in the Mortgage Loans, (iii) the amount of remaining coverage under any
applicable credit enhancements, stated separately, as of the close of business  
on the applicable Determination Date and (iv) the sum of the Master Servicing   
Fee and the aggregate Servicing Fees for the month.                             

 In addition, by the date required by applicable tax law of each year, the
Master Servicer with respect to Series of Certificates as to which there will be
only one Master Servicer, or the Certificate                                    

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Administrator with respect to Series of Certificates as to which there will be  
no Master Servicer or as to which both the Company and a Servicing Entity will  
act as Master Servicers, will furnish a report to each Certificateholder of     
record at any time during the preceding calendar year as to the aggregate of    
amounts reported pursuant to (ii) in the second preceding paragraph above, plus 
information with respect to the amount of servicing compensation for the related
Mortgage Pool, the value of any property acquired by the Trustee through        
abandonment or foreclosure, deferred interest added to the principal balance or 
the notional principal balance of each Class of Certificates, as applicable, and
such other customary information as the Master Servicer or Certificate          
Administrator, as applicable, determines to be necessary to enable              
Certificateholders to prepare their tax returns for such calendar year or, in   
the event such person was a Certificateholder of record during a portion of such
calendar year, for the applicable portion of such a year.                       

ADVANCES                                                                        

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer and unless otherwise stated in the 
applicable Prospectus Supplement, the Company or Servicing Entity, as           
applicable, will be obligated under the Pooling Agreement to make Advances (to  
the extent not previously advanced by the Seller/Servicers as described below). 
In the event that both the Company and a Servicing Entity are acting as Master  
Servicers for any Series, unless otherwise specified in the applicable          
Prospectus Supplement, each of the Company's and such Servicing Entity's        
obligation to make Advances shall be limited to Mortgage Loans in its respective
Mortgage Loans Servicing Group. Such Advances shall be in amounts sufficient to 
cover any deficiency between the funds scheduled to be received on the Mortgage 
Loans during the Distribution Period, and amounts withdrawn from the Custodial  
Accounts for P&I on each Withdrawal Date during the Distribution Period and from
any Buydown Fund Account; provided, however, that the Company or Servicing      
Entity, as applicable, will be obligated to make such Advances only to the      
extent any such Advance, in the judgment of the Company or Servicing Entity, as 
applicable, made on the Determination Date, will be reimbursable from any       
applicable credit enhancements, from Mortgagor payments or from Liquidation     
Proceeds or Insurance Proceeds of the related Mortgage Loans. In connection with
certain credit enhancements, the Company or Servicing Entity, as applicable, may
make other advances, such as to pay insurance premiums, real estate property    
taxes, protection and preservation taxes, sales expenses and foreclosure costs  
including court costs and reasonable attorneys' fees in connection with a       
Mortgage Pool Insurance Policy, which shall also constitute 'Advances'. If an   
Advance made by a Master Servicer later proves unrecoverable, such Master       
Servicer will be reimbursed from funds in the Certificate Account.              
Notwithstanding the foregoing, if both the Company and a Servicing Entity are   
acting as Master Servicers for any Series, such right of reimbursement shall be 
limited to amounts received in respect of Mortgage Loans in its respective      
Mortgage Loan Servicing Group.                                                  

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer and unless otherwise stated in the 
applicable Prospectus Supplement, each Seller/Servicer will be obligated to     
advance on the Withdrawal Date its own funds or funds from the Custodial Account
for P&I maintained by it equal to the amount of any deficiency between the      
amount in such Custodial Account for P&I on the Withdrawal Date and the amount  
due to be remitted to the Company or Servicing Entity, as applicable, on such   
date. Each Seller/Servicer will advance only funds which the Master Servicer    
anticipates will be ultimately reimbursable from the sources discussed above. To
the extent the Seller/Servicers make such Advances, the Company or Servicing    
Entity, as applicable, will be relieved of its obligation, if any, to make      
Advances with respect to the Mortgage Loans respecting which such amounts were  
advanced. If an Advance made by any Seller/Servicer later proves to be          
unrecoverable, the Company or Servicing Entity, as applicable, will cause such  
Seller/Servicer to be reimbursed from funds in the Certificate Account.         
Notwithstanding the foregoing, if both the Company and a Servicing Entity are   
acting as Master Servicers, such right of reimbursement shall be limited to     
amounts received in respect of Mortgage Loans in its respective Mortgage Loan   
Servicing Group.                                                                

  With respect to Series of Certificates as to which there will be no Master
Servicer and unless otherwise stated in the applicable Prospectus Supplement,   
the Servicer will be obligated under the Pooling Agreement to advance on the    
Withdrawal Date its own funds or funds from the Custodial Account for           

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P&I equal to the amount of any deficiency between the amount in such Custodial  
Account for P&I on the Withdrawal Date and the amount due to be remitted to the 
Certificate Administrator on such date. The Servicer will be obligated to make  
such Advances only to the extent any such Advance, in the judgment of the       
Servicer made on the related Determination Date, will be reimbursable from any  
applicable credit enhancements, from Mortgagor payments or from Liquidation     
Proceeds or Insurance Proceeds of the related Mortgage Loans. In connection with
certain credit enhancements, the Servicer may make other advances, such as to   
pay insurance premiums, real estate property taxes, protection and preservation 
taxes, sales expenses and foreclosure costs including court costs and reasonable
attorneys' fees in connection with a Mortgage Pool Insurance Policy, which shall
also constitute 'Advances'. If an Advance made by the Servicer later proves to  
be unrecoverable, the Servicer will be reimbursed from funds in the Certificate 
Account.                                                                        

COLLECTION AND OTHER SERVICING PROCEDURES                                       

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, under the Selling and Servicing   
Contract each Seller/Servicer agrees to make reasonable efforts to collect all  
payments called for under the Mortgage Notes and will, consistent with the      
Selling and Servicing Contract, the Pooling Agreement for any Series and any    
applicable credit enhancements, follow such collection procedures as it follows 
or would follow with respect to mortgage loans held for its own account which   
are comparable to the Mortgage Loans. With respect to Series of Certificates as 
to which there will be no Master Servicer and the servicing of the Mortgage     
Loans will be performed by the Servicer, the Pooling Agreement will require the 
Servicer to make the same efforts to collect payments on the Mortgage Notes and 
follow the same collection procedures as would be required of the Servicer if it
were a Seller/Servicer under a Selling and Servicing Contract. Consistent with  
the above, each Seller/Servicer with respect to Series of Certificates as to    
which the Company and/or a Servicing Entity will act as Master Servicer, or the 
Servicer with respect to Series of Certificates as to which there will be no    
Master Servicer, may, in its discretion, (i) waive any prepayment charge,       
assumption fee, late payment charge or any other charge in connection with a    
Principal Prepayment on a Mortgage Loan and (ii) only upon receiving            
authorization from the insurer on any applicable Mortgage Pool Insurance Policy 
or Primary Insurance Policy, and with respect to each Seller/Servicer, from the 
Master Servicer, arrange with a Mortgagor a schedule for the liquidation of     
delinquencies running for no more than 180 days after the first delinquent due  
date for payment on any Mortgage Note. Such authorization shall be given by the 
Company or Servicing Entity, as applicable, as Master Servicer, or the Servicer 
only upon determining that the coverage of such Mortgage Loan by any applicable 
credit enhancement will not be affected. In the event of any such arrangement,  
the Company's or Servicing Entity's, as applicable, obligation to make Advances 
on the related Mortgage Loan, if any, shall continue during the scheduled period
to the extent such Advances are not made by the Seller/Servicers.               

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, the Selling and Servicing Contract
with each Seller/Servicer requires that such Seller/Servicer enforce            
'due-on-sale' clauses, where applicable, with respect to the Mortgage Loans on  
the same basis as with loans in its own portfolio, provided that such clause is 
not to be enforced if it is unenforceable under applicable law or the terms of  
the related Mortgage Note or if the coverage of any related credit enhancement  
would be adversely affected by such enforcement. Subject to the above, if a     
Mortgaged Property has been or is about to be conveyed by the Mortgagor, the    
Seller/Servicer or the Company or Servicing Entity, as applicable, will be      
authorized to take or enter into an assumption agreement, pursuant to which the 
Mortgagor remains liable under the Mortgage Note, from or with the person to    
whom such Mortgaged Property has been or is about to be conveyed. Any fees      
collected by a Seller/Servicer for entering into an assumption agreement will be
retained by it as additional servicing compensation. With respect to Series of  
Certificates as to which there will be no Master Servicer and the servicing of  
the Mortgage Loans will be performed by the Servicer, the Pooling Agreement will
require the Servicer to enforce any 'due-on-sale' clause in the instances and to
the extent described in the first sentence of this paragraph, and the Servicer  
will be authorized to take or enter into an assumption agreement and retain any 
fees collected for entering into an assumption agreement as additional servicing
compensation to the same extent as a Seller/Servicer will be so authorized under
a Selling and Servicing Contract.                                               

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With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, the Company or Servicing Entity,  
as applicable, may, or upon receiving authorization from the Company or         
Servicing Entity, as applicable, as Master Servicer, a Seller/Servicer may, in  
connection with any such conveyance and only upon assurance that the related    
Mortgage Loan will continue to be covered by any applicable credit enhancement, 
release the original Mortgagor from liability upon the Mortgage Note and        
substitute the new Mortgagor as liable thereon. If required by law or the terms 
of the related Mortgage Note, the Company or Servicing Entity, as applicable,   
may allow such release and substitution without the consent of the provider of  
any applicable credit enhancement. In connection with any such assumption or    
substitution, the Mortgage Interest Rate borne by the related Mortgage Note may 
not be changed. With respect to Series of Certificates as to which there will be
no Master Servicer and the servicing of the Mortgage Loans will be performed by 
the Servicer, the Servicer may in connection with any such conveyance release   
the original Mortgager from liability upon the Mortgage Note and substitute a   
new Mortgagor as liable thereon in the instances and to the extent described    
above in this paragraph with respect to the Company or Servicing Entity, as     
applicable, as Master Servicer.                                                 

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, under each Selling and Servicing  
Contract the Seller/Servicer is required to establish and maintain a Custodial  
Account for Reserves into which Mortgagors deposit amounts sufficient to pay    
taxes, assessments, hazard insurance premiums or comparable items to the extent 
it is consistent with such Seller/Servicer's normal practices to collect        
payments from Mortgagors to cover tax and insurance expenses. Withdrawals from  
the Custodial Account for Reserves maintained for Mortgagors may be made to     
effect timely payment of taxes, assessments and hazard insurance premiums or    
comparable items, to reimburse the Seller/Servicer out of related assessments   
for maintaining hazard insurance, to refund to Mortgagors amounts determined to 
be overages, to pay interest to Mortgagors on balances in the Custodial Account 
for Reserves, if required, to repair or otherwise protect the Mortgaged Property
and to clear and terminate the Custodial Account for Reserves. Each             
Seller/Servicer is solely responsible for administration of the Custodial       
Account for Reserves and is expected to make Advances to such account when a    
deficiency exists therein. With respect to Series of Certificates as to which   
there will be no Master Servicer and the servicing of the Mortgage Loans will be
performed by the Servicer, the Servicer will be required to establish and       
maintain a Custodial Account for Reserves and to make Advances to such account, 
and will be authorized to make withdrawals from the Custodial Account for       
Reserves, in the instances and to the extent a Seller/Servicer would be so      
required and authorized under a Selling and Servicing Contract.                 

SERVICING COMPENSATION AND PAYMENT OF EXPENSES                                  

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, the Seller/Servicers' primary     
compensation for their servicing activities will come from the payment to them  
or the retention by them, of an amount equal to the Servicing Fee for each      
Mortgage Loan. The Company's or Servicing Entity's, as applicable, primary      
compensation for supervising the mortgage servicing and advancing certain       
expenses of a Mortgage Pool will come from the payment to it, of an amount equal
to the Master Servicing Fee with respect to each Mortgage Loan (or a Mortgage   
Loan in its respective Mortgage Loan Servicing Group) in such Mortgage Pool. The
Master Servicing Fee and the Servicing Fee with respect to each payment of      
interest received on a Mortgage Loan will equal one-twelfth of the annual Master
Servicing Fee or Servicing Fee annual percentage, as applicable, set forth in   
the Pooling Agreement multiplied by the outstanding principal balance of such   
Mortgage Loan during the month for which such amount is computed. In addition to
the Servicing Fee and Master Servicing Fee, the Company, a Servicing Entity or a
Seller may retain as its Retained Yield the right to a portion of the interest  
payable on each Mortgage Loan calculated by subtracting the applicable          
Pass-Through Rate and related Servicing Fee and Master Servicing Fee from the   
applicable Mortgage Interest Rate.                                              

  With respect to Series of Certificates as to which there will be no Master
Servicer and the servicing of the Mortgage Loans will be performed by the       
Servicer, the Servicer's primary compensation for its servicing activities will 
come from the payment to it or its retention, with respect to each interest     
payment on a Mortgage Loan, of an amount equal to the Servicing Fee for such    
Mortgage Loan. The Servicing                                                    

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Fee with respect to each payment of interest received on a Mortgage Loan will   
equal one-twelfth of the Servicing Fee annual percentage set forth in the       
Pooling Agreement multiplied by the outstanding principal balance of such       
Mortgage Loan during the month for which such amount is computed. In addition to
the Servicing Fee, the Company or a Seller may retain as its Retained Yield the 
right to a portion of the interest payable on each Mortgage Loan calculated by  
subtracting the related Servicing Fee, the Certificate Administrator Fee and the
Certificate Interest Rate from the applicable Mortgage Interest Rate.           

  With respect to Series of Certificates as to which there will be no Master
Servicer and the servicing of the Mortgage Loans will be performed by the       
Servicer or with respect to each Series as to which both the Company and a      
Servicing Entity will act as Master Servicers, the Certificate Administrator's  
compensation for its administrative services will come from the payment to it,  
with respect to each interest payment on a Mortgage Loan, of an amount equal to 
the Certificate Administrator Fee for such Mortgage Loan. The Certificate       
Administrator Fee with respect to each payment of interest received on a        
Mortgage Loan will equal one-twelfth of the annual Certificate Administrator Fee
annual percentage set forth in the Pooling Agreement multiplied by the          
outstanding principal balance of such Mortgage Loan during the month for which  
such amount is computed, subject to any minimum fee as will be set forth in the 
applicable Prospectus Supplement.                                               

As principal payments are made on each Mortgage Loan, the outstanding   
principal balance of the Mortgage Loans will decline, and thus compensation to  
the Seller/Servicers and the related Master Servicer, or to the Servicer and the
Certificate Administrator with respect to Series of Certificates for which there
will be no Master Servicer or both the Company and a Servicing Entity will act  
as Master Servicers, and any Retained Yield will decrease as the Mortgage Loans 
amortize (subject to any minimum levels of such compensation set forth in the   
applicable Prospectus Supplement). Principal Prepayments and liquidations of    
Mortgage Loans prior to maturity will also cause servicing compensation to the  
Seller/Servicers and the Company and/or Servicing Entity, as applicable, as     
Master Servicer, or to the Servicer and the Certificate Administrator, as       
applicable, and any Retained Yield to decrease (subject to any minimum levels of
such compensation set forth in the applicable Prospectus Supplement).           

In addition to their primary compensation, the Seller/Servicers or the  
Servicer, as applicable, will retain all prepayment fees, assumption fees and   
late payment charges, to the extent collected from Mortgagors. The              
Seller/Servicers' or the Servicer's income from such charges will depend upon   
their origination and servicing policies.                                       

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, the Company or Servicing Entity,  
as applicable, will pay all expenses incurred in connection with its activities 
as Master Servicer (subject to limited reimbursement as described below), which,
unless otherwise specified in the applicable Prospectus Supplement, will include
payment of the fees and disbursements of the Trustee, payment of premiums of any
Mortgage Pool Insurance Policy, Special Hazard Insurance Policy, certificate    
insurance policy, Fraud Bond or Bankruptcy Bond or the costs of obtaining or    
maintaining any Letter of Credit or Reserve Fund and payment of expenses        
incurred in connection with distributions and reports to Certificateholders of  
each Series.                                                                    

  With respect to Series of Certificates as to which there will be no Master
Servicer and the servicing of the Mortgage Loans will be performed by the       
Servicer, the Servicer will pay certain expenses incurred in connection with its
activities as Servicer (subject to limited reimbursement as described below),   
which, unless otherwise specified in the applicable Prospectus Supplement, will 
include payment of premiums of any Mortgage Pool Insurance Policy, Special      
Hazard Insurance Policy, certificate insurance policy, Fraud Bond or Bankruptcy 
Bond or the costs of maintaining any Letter of Credit or Reserve Fund. The      
Certificate Administrator will pay the fees and disbursements of the Trustee.   

As set forth in the preceding section, each Master Servicer and the     
Seller/Servicers, or the Servicer, as applicable, are entitled to reimbursement 
for certain expenses incurred by them in connection with the liquidation of     
related defaulted Mortgage Loans. Certificateholders of such Series will suffer 
no loss by reason of such expenses to the extent claims are paid under any      
applicable credit enhancements. In the event, however, that claims are not paid 
under such policies or alternative coverages, or if coverage has been exhausted,
Certificateholders of such Series will suffer a loss to the extent that the     
proceeds of liquidation of a defaulted Mortgage Loan, after reimbursement of    
each such Master Servicer's and the Seller/Servicer's expenses, or the          
Servicer's expenses, as applicable, are less than the principal balance of      

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such Mortgage Loan. In addition, each Master Servicer and the Seller/Servicers, 
or the Servicer, as applicable, are entitled to reimbursement of expenditures   
incurred by them in connection with the restoration of a related damaged        
Mortgaged Property, such right of reimbursement being prior to the rights of    
Certificateholders to receive any related Insurance Proceeds or Liquidation     
Proceeds.                                                                       

EVIDENCE AS TO COMPLIANCE                                                       

Except as may be specified in the applicable Prospectus Supplement, each
Pooling Agreement will provide that on or before April 30 of each year,         
beginning on the first April 30 that is at least six months after the Cut-Off   
Date, one or more firms of independent public accountants will furnish          
statements to the Trustee to the effect that, in connection with such firm's    
examination of the financial statements of the Company and/or Servicing Entity, 
as Master Servicer, or the Servicer, as applicable, as of the previous December 
31, nothing came to such firm's attention that indicated that the Company or    
Servicing Entity, as applicable, as Master Servicer, or the Servicer, as        
applicable, was not in compliance with specified sections of the Pooling        
Agreement, except for (i) such exceptions as such firm believes to be immaterial
and (ii) such other exceptions as are set forth in such statement.              

Except as may be provided in the applicable Prospectus Supplement, each 
Pooling Agreement will also provide for delivery to the Trustee of an annual    
statement signed by an officer of the Company and/or Servicing Entity, as Master
Servicer, or the Servicer, as applicable, to the effect that, based on a review 
of the Company's and/or Servicing Entity's, as Master Servicer, or the          
Servicer's activities during the preceding calendar year, to the best of such   
officer's knowledge the Company and/or Servicing Entity, as Master Servicer, or 
the Servicer, as applicable, has fulfilled its obligations under the Pooling    
Agreement throughout the preceding year or, if there has been a default in the  
fulfillment of any such obligations, specifying each such default and the nature
and status thereof.                                                             

CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE                              
SERVICER, THE CERTIFICATE ADMINISTRATOR AND THE COMPANY                         

Except as may otherwise be specified in the applicable Prospectus       
Supplement, the Pooling Agreement for each Series will provide that neither the 
Company nor a Servicing Entity, as applicable, may resign from its obligations  
and duties thereunder as Master Servicer or, if applicable, Certificate         
Administrator, or that the Servicer, where applicable, may not resign from its  
obligations and duties thereunder, except upon determination that its duties    
thereunder are no longer permissible under applicable law. No such resignation  
will become effective until the Trustee or a successor has assumed the Company's
or Servicing Entity's, as applicable, master servicing obligations and duties,  
or, where applicable, the Servicer's obligations and duties, under such Pooling 
Agreement.                                                                      

   The Pooling Agreement for each Series will provide that neither the Company
nor any Master Servicer, or that, where applicable, neither the Servicer nor the
Certificate Administrator, nor any director, officer, employee or agent of the  
Company, any Master Servicer, the Servicer and the Certificate Administrator    
(where applicable) (the 'Indemnified Parties') will be under any liability to   
the Trust Fund or the Certificateholders or the Trustee, any Seller/Servicer or 
others for any action taken by any Indemnified Party, any Seller/Servicer or the
Trustee in good faith pursuant to the Pooling Agreement, or for errors in       
judgment; provided, however, that neither the Company, the Master Servicer, the 
Servicer nor the Certificate Administrator nor any such person will be protected
against any liability which would otherwise be imposed by reason of willful     
misfeasance, bad faith or gross negligence in the performance of duties or by   
reason of reckless disregard of obligations and duties thereunder. The Pooling  
Agreement relating to each such Series will further provide that any Indemnified
Party is entitled to indemnification by the Trust Fund and will be held harmless
against any loss, liability or expense incurred in connection with any legal    
action relating to the Pooling Agreement or the Certificates, other than any    
loss, liability or expense related to any specific Mortgage Loan or Mortgage    
Loans (except any such loss, liability or expense otherwise reimbursable        
pursuant to the Pooling Agreement) and any loss, liability or expense incurred  
by reason of willful misfeasance, bad faith or gross negligence in the          
performance of duties thereunder or by reason of reckless disregard of          
obligations and duties thereunder. In addition, the Pooling Agreement for each  
such Series will provide that neither the Company nor any Master Servicer or,   
where applicable, neither the Servicer nor the Certificate Administrator, is    
under any obligation to appear in,                                              

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prosecute or defend any legal action which is not incidental to its             
responsibilities under the Pooling Agreement and which in its opinion may       
involve it in any expense or liability. The Company or, where applicable, a     
Master Servicer or the Servicer or the Certificate Administrator, may, however, 
in its discretion, undertake any such action which it may deem necessary or     
desirable with respect to the Pooling Agreement and the rights and duties of the
parties thereto and the interests of the Certificateholders thereunder. In such 
event, the legal expenses and costs of such action and any liability resulting  
therefrom will be expenses, costs and liabilities of the Trust Fund, and the    
Company or, where applicable, a Master Servicer, the Servicer or the Certificate
Administrator, will be entitled to be reimbursed therefor and to charge the     
Certificate Account.                                                            

Any person into which a Master Servicer, the Servicer or the Certificate
Administrator may be merged, converted or consolidated, or any person resulting 
from any merger, conversion or consolidation to which such Master Servicer, the 
Servicer or the Certificate Administrator is a party, or any person succeeding  
to the business of such Master Servicer, the Servicer or the Certificate        
Administrator, will be the successor of such Master Servicer, the Servicer or   
the Certificate Administrator, respectively, under the Pooling Agreement.       

EVENTS OF DEFAULT                                                               

With respect to Series of Certificates as to which the Company and/or a 
Servicing Entity will act as Master Servicer, Events of Default under the       
Pooling Agreement for each such Series (but, in the event that both the Company 
and a Servicing Entity are acting as Master Servicers for a Series, such Event  
of Default shall apply only to the defaulting Master Servicer), unless otherwise
specified in the applicable Prospectus Supplement, will include, without        
limitation, (i) any failure by the Company or Servicing Entity, as applicable,  
as Master Servicer, to make a required deposit to the Certificate Account or, if
the Company or Servicing Entity, as applicable, as Master Servicer, is the      
Paying Agent, to distribute to Certificateholders of any Class any required     
payment which continues unremedied for ten days after the giving of written     
notice of such failure to the Company or Servicing Entity, as applicable, as    
Master Servicer, by the Trustee, or to the Company or Servicing Entity, as      
applicable, as Master Servicer, and the Trustee by the holders of Certificates  
for that Series evidencing interests aggregating not less than 25% of the Trust 
Fund, as determined in the manner set forth in such Pooling Agreement; (ii) any 
failure on the part of the Company or Servicing Entity, as applicable, as Master
Servicer, duly to observe or perform in any material respects any other of the  
covenants or agreements on the part of the Company or Servicing Entity, as      
applicable, as Master Servicer, contained in the Certificates for that Series or
in such Pooling Agreement which continues unremedied for 60 days after the      
giving of written notice of such failure to the Company or Servicing Entity, as 
applicable, as Master Servicer, by the Trustee, or to the Company or Servicing  
Entity, as applicable, as Master Servicer, and the Trustee by the holders of    
Certificates for that Series evidencing interests aggregating not less than 25% 
of the Trust Fund, as determined in the manner set forth in such Pooling        
Agreement; (iii) certain events of insolvency, readjustment of debt, marshalling
of assets and liabilities or similar proceedings and certain actions by the     
Company or Servicing Entity, as applicable, as Master Servicer, indicating      
insolvency, reorganization or inability to pay its obligations and (iv) any     
failure of the Company or Servicing Entity, as applicable, to make any Advance  
(other than a Nonrecoverable Advance) which continues unremedied at the opening 
of business on the Distribution Date in respect of which such Advance was to    
have been made. With respect to Series of Certificates as to which there will be
no Master Servicer, the Events of Default under the Pooling Agreement for each  
such Series, unless otherwise specified in the applicable Prospectus Supplement,
will be the same failures by or conditions of the Servicer as will constitute   
Events of Default by a Master Servicer under the Pooling Agreement for each     
Series of Certificates for which the Company and/or a Servicing Entity will act 
as Master Servicer, except that an Event of Default created by a failure of a   
Master Servicer to make a required deposit to the Certificate Account referred  
to in clause (i) of the immediately prior sentence will instead be the failure  
of the Servicer to make a required deposit to the Investment Account on the     
Withdrawal Date. Notwithstanding the foregoing, if an Event of Default described
in clause (iv) above occurs, the Trustee will, upon written notice to the       
Company or Servicing Entity, as applicable, immediately suspend all of the      
rights and obligations of the Company or Servicing Entity, as applicable,       
thereafter arising under the Pooling Agreement and the Trustee will act to carry
out the duties of the Master Servicer, including the obligation to make any     
Advance the nonpayment of which was an Event of                                 

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Default described in clause (iv) above. The Trustee will permit the Company or  
Servicing Entity, as applicable, to resume its rights and obligations as Master 
Servicer under the Pooling Agreement if the Company or Servicing Entity, as     
applicable, within two Business Days following its suspension, remits to the    
Trustee the amount of any Advance the nonpayment of which was an Event of       
Default described in clause (iv) above. If an Event of Default as described in  
clause (iv) above occurs more than two times in any twelve month period, the    
Trustee will not be obligated to permit the Company or Servicing Entity, as     
applicable, to resume its rights and obligations as Master Servicer under the   
Pooling Agreement.                                                              

RIGHTS UPON EVENT OF DEFAULT                                                    

 As long as an Event of Default under the Pooling Agreement for any Series
remains unremedied, the Trustee or holders of Certificates for that Series      
evidencing interests aggregating not less than 25% of the Trust Fund, as        
determined in the manner set forth in such Pooling Agreement, may terminate all 
of the rights and obligations of the defaulting Master Servicer, the Servicer or
the Certificate Administrator, as applicable, under such Pooling Agreement and  
in and to the Trust Fund, whereupon the Trustee will succeed to all the         
responsibilities, duties and liabilities of the Master Servicer, the Servicer or
the Certificate Administrator, as applicable, under such Pooling Agreement and  
will be entitled to similar compensation arrangements and limitations on        
liability. In the event that the Trustee is unwilling or unable so to act, it   
may appoint or petition a court of competent jurisdiction for the appointment of
a housing and home finance institution with a net worth of at least $10,000,000 
to act as successor to the defaulting Master Servicer, the Servicer or the      
Certificate Administrator, as applicable, under such Pooling Agreement. Pending 
any such appointment, the Trustee is obligated to act in such capacity. In the  
event the Trustee acts as successor to such Master Servicer or the Servicer, the
Trustee will be obligated to make Advances unless it is prohibited by law from  
doing so. The Trustee and such successor may agree upon the compensation to be  
paid, which in no event may be greater than the compensation to the Company or  
Servicing Entity, as applicable, as initial Master Servicer, or with respect to 
a Series of Certificates as to which there will be no Master Servicer, to the   
Servicer named in the applicable Prospectus Supplement or the Certificate       
Administrator, as applicable, under such Pooling Agreement. Subject to certain  
limitations, holders of Certificates for a Series evidencing interests          
aggregating not less than 25% of the Trust Fund, as determined in the manner set
forth in the Pooling Agreement for that Series, may direct the action of the    
Trustee in pursuing remedies and exercising powers under such Pooling Agreement.

   No Certificateholder of any Series will have any right under the applicable
Pooling Agreement to institute any proceeding with respect to such Pooling      
Agreement unless such Certificateholder previously has given to the Trustee     
written notice of default and unless the holders of Certificates for that Series
evidencing interests aggregating not less than 25% of the Trust Fund, as        
determined in the manner set forth in such Pooling Agreement, have made written 
request upon the Trustee to institute such proceeding in its own name as Trustee
thereunder and have offered to the Trustee reasonable indemnity and the Trustee 
for 60 days has neglected or refused to institute any such proceeding. However, 
the Trustee is under no obligation to exercise any of the trusts or powers      
vested in it by the Pooling Agreement for any Series or to make any             
investigation of matters arising thereunder or to institute, conduct or defend  
any litigation thereunder or in relation thereto at the request, order or       
direction of any of the Certificateholders, unless such Certificateholders have 
offered to the Trustee reasonable security or indemnity against the costs,      
expenses and liabilities which may be incurred therein or thereby.              

AMENDMENT                                                                       

    The Pooling Agreement for each Series may be amended by the Company and/or a
Servicing Entity and the Trustee, with respect to Series of Certificates as to  
which the Company and/or a Servicing Entity will act as Master Servicer (and in 
the case where both the Company and a Servicing Entity are acting as Master     
Servicers, the Certificate Administrator), and by the Company, the Servicer, the
Certificate Administrator and the Trustee with respect to Series of Certificates
as to which there will be no Master Servicer, without the consent of any of the 
Certificateholders covered by such Pooling Agreement, (i) to cure any ambiguity,
(ii) to correct or supplement any provision therein which may be inconsistent   
with any other provision therein, (iii) to comply with any requirements imposed 
by the Internal Revenue Code                                                    

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of 1986, as amended (the 'Code') or any regulations thereunder, including       
provisions to such extent as shall be necessary to maintain the qualification of
the Trust Fund as a REMIC or to avoid or minimize the risk of imposition of any 
tax on the related Trust Fund, and (iv) to correct the description of any       
property at any time included in the Trust Fund, or to assure conveyance to the 
Trustee of any property included in the Trust Fund. The Pooling Agreement for   
each Series may also be amended by the Company and the Trustee, with respect to 
Series of Certificates as to which the Company will act as Master Servicer, and 
by the Company, the Servicer, the Certificate Administrator and the Trustee with
respect to Series of Certificates as to which the Company will not act as Master
Servicer, with the consent of the holders of Certificates for that Series       
evidencing interests aggregating not less than 66% of the Trust Fund, as        
determined in the manner set forth in such Pooling Agreement, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the    
provisions of such Pooling Agreement or of modifying in any manner the rights of
the holders of Certificates of that Series; provided, however, that no such     
amendment may (i) reduce in any manner the amount of, or delay the timing of,   
payments received on Mortgage Loans which are required to be distributed in     
respect of any Certificate without the consent of the holder of such            
Certificate, or (ii) reduce the aforesaid percentage of Certificates, the       
holders of which are required to consent to any such amendment without the      
consent of the holders of all Certificates of such Series then outstanding.     

The Prospectus Supplement for a particular Series may describe other or 
different provisions concerning conditions to the amendment of the related      
Pooling Agreement.                                                              

LIST OF CERTIFICATEHOLDERS                                                      

    With respect to Series of Certificates as to which the Company will act as a
Master Servicer or with respect to a Series where a Servicing Entity is the only
Master Servicer, upon written request of the Trustee, the Company or Servicing  
Entity as applicable, will provide to the Trustee within 30 days after the      
receipt of such request a list of the names and addresses of all                
Certificateholders of record of a particular Series or Class as of the most     
recent Record Date for payment of distributions to Certificateholders of that   
Series or Class. Upon written request of three or more Certificateholders of    
record of such a Series of Certificates, for purposes of communicating with     
other Certificateholders with respect to their rights under the Pooling         
Agreement for such Series, the Trustee will afford such Certificateholders      
access during business hours to the most recent list of Certificateholders of   
that Series held by the Trustee. If such list is as of a date more than 90 days 
prior to the date of receipt of such Certificateholders' request, the Trustee   
shall promptly request from the Master Servicer a current list and will afford  
such requesting Certificateholders access to such list promptly upon receipt.   
With respect to Series of Certificates as to which there will be no Master      
Servicer, the Company, as Certificate Administrator, will provide the list of   
names and addresses of the Certificateholders described above in the same manner
as so described.                                                                

TERMINATION                                                                     

The obligations created by the Pooling Agreement for each Series will   
terminate upon the occurrence of both (i) the later of the maturity or other    
liquidation of the last Mortgage Loan subject thereto and the disposition of all
property acquired upon foreclosure of any Mortgage Loan and (ii) the payment to 
Certificateholders of each Class, if any, of that Series of all amounts held on 
behalf of such Certificateholders and required to be paid to them pursuant to   
such Pooling Agreement. The Pooling Agreement for each Series will permit, but  
not require, the Company to repurchase from the Trust Fund for such Series all  
remaining Mortgage Loans at a price equal to the unpaid principal amount thereof
or the Trust Fund's adjusted basis in the Mortgage Loans, as described in the   
related Prospectus Supplement, in either case together with interest at the     
applicable Mortgage Interest Rates (which will generally be passed through to   
Certificateholders at the applicable Pass-Through Rates). The exercise of such  
right will effect early retirement of the Certificates of such Series, but the  
Company's right so to repurchase is subject to the aggregate principal balances 
of the Mortgage Loans at the time of repurchase being less than the percentage  
specified in the related Prospectus Supplement of the aggregate principal amount
of the Mortgage Loans underlying the Certificates of such Series as of the      
Cut-Off Date. In no event, however, will the trust created by any Pooling       
Agreement continue beyond the expiration of 21 years from                       

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the death of the survivor of the issue of the person named in such Pooling      
Agreement. For each Series, the Trustee will give written notice of termination 
of the Pooling Agreement to each Certificateholder, and the final distribution  
will be made only upon surrender and cancellation of the Certificates at an     
office or agency specified in the notice of termination.                        

REDEMPTION AGREEMENT                                                            

    If so specified in the Prospectus Supplement for a Series, the related Trust
Fund will enter into a redemption agreement pursuant to which the counterparty  
to the agreement will have the right to cause a redemption of the outstanding   
Certificates of such Series, beginning on the Distribution Date and subject to  
payment of the redemption price and other conditions specified in the Prospectus
Supplement. In general, the redemption price will equal the aggregate           
outstanding principal balance of all Certificates of such Series (other than    
such Certificates with a notional principal balance), plus any interest         
described in the Prospectus Supplement. Payment of the redemption price will be 
in lieu of any distribution of principal and interest that would otherwise be   
made on that Distribution Date. Upon a redemption, the holder of the redemption 
right will receive the assets of the Trust Fund and each Certificateholder will 
receive the outstanding principal balance of its Certificate (other than a      
holder of Certificates with a notional principal balance), plus any interest    
specified in the Prospectus Supplement. See 'Yield, Prepayment and Maturity     
Considerations' for a discussion of the effects of such a redemption of an      
investor's yield to maturity. In the case of a Trust Fund for which a REMIC     
election or elections have been made, the transaction by which the Certificates 
are retired and the related redemption is conducted will constitute a 'qualified
liquidation' under Section 860F of the Code.                                    

PUT OPTION                                                                      

If so specified in the Prospectus Supplement for a Series, each         
Certificateholder of such Series, of a Class of such Series or of a group for   
such Series will have the option to require the entity named in such Prospectus 
Supplement to purchase such Certificates in full on the date, at the purchase   
price and on the terms specified in such Prospectus Supplement.                 

THE TRUSTEE                                                                     

The Trustee under each Pooling Agreement will be named in the related   
Prospectus Supplement. The bank or trust company serving as Trustee may have    
normal banking relationships with the Company and/or its affiliates. The Trustee
will have combined capital and surplus of not less than $50 million.            

 The Trustee under each Pooling Agreement may resign at any time, in which
event the Company will be obligated to appoint a successor Trustee. The Company 
may also remove the Trustee if the Trustee ceases to be eligible to continue as 
such under the applicable Pooling Agreement or if the capital and surplus of the
Trustee is reduced below $50 million. Upon becoming aware of such circumstances,
the Company will be obligated to appoint a successor Trustee for the related    
Series. The Trustee may also be removed at any time by holders of Certificates  
of a Series evidencing more than 50% of the aggregate undivided interests in the
related Trust Fund. Any resignation or removal of the Trustee and appointment of
a successor Trustee will not become effective until acceptance of the           
appointment by the successor Trustee.                                           

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PRIMARY INSURANCE, FHA MORTGAGE INSURANCE, VA MORTGAGE GUARANTY, HAZARD 
INSURANCE; CLAIMS THEREUNDER

As set forth below, a Mortgage Loan may be required to be covered by a  
hazard insurance policy and either an FHA Insurance Policy, a VA Guaranty or a  
Primary Insurance Policy. The following is only a brief description of such     
coverage and does not purport to describe all of the characteristics of each    
type of insurance. Such insurance is subject to underwriting and approval of    
individual Mortgage Loans by the respective insurers and guarantors. In some    
cases, however, the issuer of the insurance or guaranty may delegate            
underwriting authority to the originator of the Mortgage Loan. The descriptions 
of any insurance coverage in this Prospectus or any Prospectus Supplement do not
purport to be complete and are qualified in their entirety by reference to such 
forms of policies, and to such statutes or regulations as may be applicable.    

PRIMARY INSURANCE                                                               

Unless otherwise specified in the applicable Prospectus Supplement, each
Mortgage Loan with a loan-to-value ratio at origination and at the Cut-Off Date 
greater than 80% will be covered by a primary mortgage insurance policy (a      
'Primary Insurance Policy') providing insurance coverage against default on such
Mortgage Loan, in general, of up to 25% of the principal balance of such        
Mortgage Loan with maintenance requirements in certain cases for the remaining  
term of such Mortgage Loan, but at least until the loan-to-value ratio drops to 
80%. Conversely, Mortgage Loans with lower loan-to-value ratios (up to          
approximately 80%) may not be covered by any Primary Insurance Policies.        
Applicable state laws may in some instances limit the maximum coverage which may
be obtained with respect to certain Mortgage Loans. Any such policy will be     
issued by a Qualified Insurer.                                                  

While the terms and conditions of the Primary Insurance Policies will   
differ, each Primary Insurance Policy will in general provide substantially the 
following coverage. The amount of the loss as calculated under a Primary        
Insurance Policy covering a Mortgage Loan (herein referred to as the 'Loss')    
will generally consist of the unpaid principal balance of such Mortgage Loan and
accrued and unpaid interest thereon and reimbursement of certain expenses, less 
(i) rents or other payments collected or received by the insured (other than the
proceeds of hazard insurance) that are derived from the related Mortgaged       
Property, (ii) hazard insurance proceeds in excess of the amount required to    
restore such Mortgaged Property and which have not been applied to the payment  
of the Mortgage Loan, (iii) certain amounts expended by the insured but not     
approved by the insurer, (iv) claim payments previously made on such Mortgage   
Loan and (v) unpaid premiums and certain other amounts.                         

  The issuer of a Primary Insurance Policy will generally be required to pay
either: (i) the insured percentage of the Loss; (ii) the entire amount of the   
Loss, after receipt by the insurer of good and merchantable title to, and       
possession of, the Mortgaged Property; or (iii) at the option of the insurer    
under certain Primary Insurance Policies, the sum of the delinquent monthly     
payments plus any advances made by the insured, both to the date of the claim   
payment and, thereafter, monthly payments in the amount that would have become  
due under the Mortgage Loan if it had not been discharged plus any advances made
by the insured until the earlier of (a) the date the Mortgage Loan would have   
been discharged in full if the default had not occurred or (b) an approved sale.

   As conditions precedent to the filing or payment of a claim under a Primary
Insurance Policy, in the event of default by the Mortgagor, the insured will    
typically be required, among other things, to: (i) advance or discharge (a)     
hazard insurance premiums and (b) as necessary and approved in advance by the   
insurer, real estate taxes, protection and preservation expenses and foreclosure
and related costs; (ii) in the event of any physical loss or damage to the      
Mortgaged Property, have the Mortgaged Property restored to at least its        
condition at the effective date of the Primary Insurance Policy (ordinary wear  
and tear excepted); and (iii) tender to the insurer good and merchantable title 
to, and possession of, the Mortgaged Property. If any Advance to be made        
(including expenses to be paid) by the Master Servicer as a condition for       
coverage of a loss by a Primary Insurance Policy is not so made by the Master   
Servicer because the such Advance has been determined to be nonrecoverable, then
such loss will be allocated to the Certificateholders. See 'Description of      
Certificates -- Advances'.                                                      

For any Certificates offered hereunder as to which the Company and/or a 
Servicing Entity will act as Master Servicer, the Company or Servicing Entity,  
as applicable, will cause each Servicer to maintain, or                         

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with respect to a Series of Certificates as to which there will be no Master    
Servicer, the Servicer will maintain, in full force and effect and to the extent
coverage is available a Primary Insurance Policy with regard to each Mortgage   
Loan for which such coverage is required under the standard described above,    
provided that such Primary Insurance Policy was in place as of the Cut-Off Date 
and the Company or Servicing Entity, as applicable, had knowledge of such       
Primary Insurance Policy. With respect to Series of Certificates as to which the
Company and/or a Servicing Entity will act as Master Servicer, in the event that
the Company or Servicing Entity, as applicable learns that a Mortgage Loan had a
loan-to-value ratio at origination and as of the Cut-Off Date in excess of 80%  
and was not the subject of a Primary Insurance Policy (and was not included in  
any exception to such standard disclosed in the related Prospectus Supplement), 
then the Company or Servicing Entity, as applicable is required to use its      
reasonable efforts to obtain and maintain a Primary Insurance Policy to the     
extent that such a policy is obtainable at a reasonable price. With respect to  
Series of Certificates as to which there will be no Master Servicer, in the     
event the Servicer learns of the lack of a Primary Insurance Policy described in
the preceding sentence, the Servicer shall notify the Trustee who shall require 
the Seller to obtain a Primary Insurance Policy, repurchase the Mortgage Loan or
substitute a mortgage loan for the applicable Mortgage Loan. The Company or     
Servicing Entity, as Master Servicer, or the Servicer, as applicable, will not  
cancel or refuse to renew any such Primary Insurance Policy in effect at the    
time of the initial issuance of a Series of Certificates that is required to be 
kept in force under the applicable Pooling Agreement unless, in the event that  
such Series of Certificates was rated at the time of issuance, the replacement  
Primary Insurance Policy from such cancelled or non-renewed policy is maintained
with an insurer whose claims-paying ability is acceptable to the rating agency  
or agencies that rated such Series of Certificates for mortgage pass-through    
certificates having a rating equal to or better than the then-current ratings of
such Series of Certificates.                                                    

 Evidence of each Primary Insurance Policy will be provided to the Trustee
simultaneously with the transfer to the Trustee of the related Mortgage Loan.   
With respect to Series of Certificates as to which the Company and/or a         
Servicing Entity will act as Master Servicer, under the Selling and Servicing   
Contract each Seller/Servicer, on behalf of itself, the Company, the related    
Master Servicer, the Trustee and the Certificateholders, will be required to    
present claims to the insurer under any Primary Insurance Policy and take such  
reasonable steps as are necessary to permit recovery thereunder with respect to 
defaulted Mortgage Loans. Amounts collected by a Seller/Servicer under such     
Primary Insurance Policy shall be deposited in the Custodial Account for P&I    
maintained by such Seller/Servicer on behalf of the Company, the Master         
Servicer, the Trustee and the Certificateholders. The Company or Servicing      
Entity, as applicable, will agree to cause each Seller/Servicer not to cancel or
refuse to renew any Primary Insurance Policy required to be kept in force by the
Pooling Agreement. With respect to Series of Certificates as to which there will
be no Master Servicer, under the Pooling Agreement the Servicer will agree not  
to cancel or refuse to renew any Primary Insurance Policy and will be required  
to present claims to the insurer under any such Primary Insurance Policy, take  
steps to permit recovery under any such Primary Insurance Policy and deposit    
amounts collected thereunder in the Custodial Account for P&I to the same extent
as a Seller/Servicer will be so required under a Selling and Servicing Contract.

The Pooling Agreement will permit the cancellation or non-renewal of a  
Primary Insurance Policy in the event that the loan-to-value ratio of the       
Mortgage Loan based on the original appraisal or a current appraisal is less    
than 80% of the then current outstanding principal balance of such Mortgage     
Loan.                                                                           

   See 'Description of Credit Enhancements -- The Fraud Bond' for a discussion
of the possible effect of fraudulent conduct or negligence by the Seller, the   
Seller/Servicer or the Mortgagor with respect to a Mortgage Loan on the coverage
of a Primary Insurance Policy.                                                  

FHA MORTGAGE INSURANCE                                                          

    The National Housing Act of 1934, as amended (the 'Housing Act'), authorizes
various FHA mortgage insurance programs. Some of the Mortgage Loans may be      
insured under either Section 203(b), Section 234 or Section 235 of the Housing  
Act. Under Section 203(b), FHA insures mortgage loans of up to 30 years'        
duration for the purchase of one- to four-family dwelling units. Mortgage Loans 
for the purchase of condominium units are insured by FHA under Section 234.     
Loans insured under these programs must bear interest at a rate not exceeding   
the maximum rate in effect at the time the loan is made, as established by the  
United States Department of Housing and Urban Development ('HUD'), and          

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may not exceed specified percentages of the lesser of the appraised value of the
property and the sales price, less seller paid closing costs for the property,  
up to certain specified maximums. In addition, FHA imposes initial investment   
minimums and other requirements on mortgage loans insured under the Section     
203(b) and Section 234 programs.                                                

  Under Section 235, assistance payments are paid by HUD to the mortgagee on
behalf of eligible mortgagors for as long as the mortgagors continue to be      
eligible for the payments. To be eligible, a mortgagor must be part of a family,
must have income within the limits prescribed by HUD at the time of initial     
occupancy, must occupy the property and must meet requirements for              
recertification at least annually.                                              

    The regulations governing these programs provide that insurance benefits are
payable either (i) upon foreclosure (or other acquisition of possession) and    
conveyance of the mortgaged premises to HUD or (ii) upon assignment of the      
defaulted mortgage loan to HUD. The FHA insurance that may be provided under    
these programs upon conveyance of the home to HUD is equal to 100% of the       
outstanding principal balance of the mortgage loan, plus accrued interest, as   
described below, and certain additional costs and expenses. When entitlement to 
insurance benefits results from assignment of the mortgage loan to HUD, the     
insurance payment is computed as of the date of the assignment and includes the 
unpaid principal amount of the mortgage loan plus mortgage interest accrued and 
unpaid to the assignment date.                                                  

 When entitlement to insurance benefits results from foreclosure (or other
acquisition of possession) and conveyance, the insurance payment is equal to the
unpaid principal amount of the mortgage loan, adjusted to reimburse the         
mortgagee for certain tax, insurance and similar payments made by it and to     
deduct certain amounts received or retained by the mortgagee after default, plus
reimbursement not to exceed two-thirds of the mortgagee's foreclosure costs.    

VA MORTGAGE GUARANTY                                                            

The Servicemen's Readjustment Act of 1944, as amended, permits a veteran
(or, in certain instances, his or her spouse) to obtain a mortgage loan guaranty
by the VA covering mortgage financing of the purchase of a one-to four-family   
dwelling unit to be occupied as the veteran's home at an interest rate not      
exceeding the maximum rate in effect at the time the loan is made, as           
established by HUD. The program has no limit on the amount of a mortgage loan,  
requires no down payment from the purchaser and permits the guaranty of mortgage
loans with terms limited by the estimated economic life of the property, up to  
30 years. The maximum guaranty that may be issued by the VA under this program  
is 50% of the original principal amount of the mortgage loan up to a certain    
dollar limit established by the VA. The loan-to-value ratios allowed for        
VA-guaranteed loans are set forth in the FNMA Seller's Guide. The liability on  
the guaranty is reduced or increased pro rata with any reduction or increase in 
the amount of indebtedness, but in no event will the amount payable on the      
guaranty exceed the amount of the original guaranty. Notwithstanding the dollar 
and percentage limitations of the guaranty, a mortgagee will ordinarily suffer a
monetary loss only where the difference between the unsatisfied indebtedness and
the proceeds of a foreclosure sale of mortgaged premises is greater than the    
original guaranty as adjusted. The VA may, at its option, and without regard to 
the guaranty, make full payment to a mortgagee of the unsatisfied indebtedness  
on a mortgage upon its assignment to the VA.                                    

Since there is no limit imposed by the VA on the principal amount of a  
VA-guaranteed mortgage loan but there is a limit on the amount of the VA        
guaranty, additional coverage under a Primary Insurance Policy may be required  
by the Company for VA loans in excess of certain amounts. The amount of any such
additional coverage will be set forth in the related Prospectus Supplement.     

HAZARD INSURANCE                                                                

Unless otherwise specified in the applicable Prospectus Supplement, each
Seller/Servicer with respect to Series of Certificates as to which the Company  
and/or a Servicing Entity will act as Master Servicer, or the Servicer with     
respect to Series of Certificates as to which there will be no Master Servicer, 
will cause to be maintained for each Mortgage Loan (other than Cooperative Loans
and Mortgage Loans secured by condominium units) that it services a hazard      
insurance policy providing for no less than the coverage of the standard form of
fire insurance policy with extended coverage customary in the state in          

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which the Mortgaged Property is located. Such coverage will be in an amount not 
less than the maximum insurable value of the Mortgaged Property or the original 
principal balance of such Mortgage Loan, whichever is less. As set forth above, 
all amounts collected by the Company or Servicing Entity, as applicable, as     
Master Servicer, or a Seller/Servicer, or the Servicer, as applicable, under any
hazard policy (except for amounts to be applied to the restoration or repair of 
the Mortgaged Property or released to the Mortgagor in accordance with the      
Seller/Servicer's or the Servicer's normal servicing procedures) will be        
deposited in the Custodial Account for P&I. In the event that the Company or    
Servicing Entity, as applicable, as Master Servicer, or the Seller/Servicer, or 
the Servicer, as applicable, maintains a blanket policy insuring against hazard 
losses on all of the Mortgage Loans, it shall conclusively be deemed to have    
satisfied its obligation relating to the maintenance of hazard insurance. Such  
blanket policy may contain a deductible clause, in which case the Company or    
Servicing Entity, as applicable, as Master Servicer, or the Seller/Servicer, or 
the Servicer, as applicable, will deposit in the Custodial Account for P&I or   
the Certificate Account all sums which would have been deposited therein but for
such clause. The Company or Servicing Entity, as applicable, as Master Servicer,
and each of the Seller/Servicers with respect to Series of Certificates as to   
which the Company and/or a Servicing Entity will act as Master Servicer, or the 
Servicer with respect to Series of Certificates as to which there will be no    
Master Servicer, are required to maintain a fidelity bond and errors and        
omissions policy with respect to officers and employees which provide coverage  
against losses which may be sustained as a result of an officer's or employee's 
misappropriation of funds or errors and omissions in failing to maintain        
insurance, subject to certain limitations as to amount of coverage, deductible  
amounts, conditions, exclusions and exceptions in such form and amount as       
specified in the Servicing Contract or the Pooling Agreement, as applicable.    

 In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements on the property by fire,  
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil     
commotion, subject to the conditions and exclusions particularized in each      
policy. Although the policies relating to the Mortgage Loans will be            
underwritten by different insurers under different state laws in accordance with
different applicable state forms and therefore will not contain identical terms 
and conditions, the basic terms thereof are dictated by respective state laws,  
and most such policies typically do not cover any physical damage resulting from
the following: war, revolution, governmental actions, floods and other          
water-related causes, earth movement (including earthquakes, landslides and mud 
flows), nuclear reactions, wet or dry rot, vermin, rodents, insects or domestic 
animals, theft and, in certain cases, vandalism. The foregoing list is merely   
indicative of certain kinds of uninsured risks and is not intended to be        
all-inclusive. The Company or Servicing Entity, as applicable, may require      
Mortgaged Properties in certain locations to be covered by policies of          
earthquake insurance, to the extent it is reasonably available. When any        
improvement to a Mortgaged Property is located in a designated flood area and in
a community which participates in the National Flood Insurance Program at the   
time of origination of the related Mortgage Loan, and flood insurance is        
required and available, the Pooling Agreement requires the Company or Servicing 
Entity, as applicable, as Master Servicer, through the Seller/Servicer          
responsible for servicing such Mortgage Loan, or the Servicer, as applicable, to
cause the Mortgagor to acquire and maintain such insurance.                     

 The hazard insurance policies covering the Mortgaged Properties typically
contain a clause which, in effect, requires the insured at all times to carry   
insurance of a specified percentage (generally 80% to 90%) of the full          
replacement value of the improvements on the property in order to recover the   
full amount of any partial loss. If the insured's coverage falls below this     
specified percentage, such clause provides that the insurer's liability in the  
event of partial loss does not exceed the larger of (i) the replacement cost of 
the improvements less physical depreciation, and (ii) such proportion of the    
loss, without deduction for depreciation, as the amount of insurance carried    
bears to the specified percentage of the full replacement cost of such          
improvements.                                                                   

Neither the Seller/Servicer with respect to Series of Certificates as to
which the Company and/or a Servicing Entity will act as Master Servicer, or the 
Servicer with respect to Series of Certificates as to which there will be no    
Master Servicer, will require that a hazard or flood insurance policy be        
maintained for any Cooperative Loan or Mortgage Loan secured by a condominium   
unit. With respect to a Cooperative Loan, generally the Cooperative itself is   
responsible for maintenance of hazard insurance for the property owned by the   
Cooperative, and the tenant-stockholders of the Cooperative do not maintain     
individual hazard insurance policies. To the extent, however, that a Cooperative
and the related borrower                                                        

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on a Cooperative Note do not maintain such insurance or do not maintain adequate
coverage or any insurance proceeds are not applied to the restoration of the    
damaged property, damage to such borrower's cooperative apartment or such       
Cooperative's building could significantly reduce the value of the collateral   
securing such Cooperative Note. With respect to a Mortgage Loan secured by a    
condominium unit, the condominium owner's association for the related building  
generally is responsible for maintenance of hazard insurance for such building, 
and the condominium owners do not maintain individual hazard insurance policies.
To the extent that the owner of a Mortgage Loan secured by a condominium unit   
and the related condominium owner's association do not maintain such insurance  
or do not maintain adequate coverage or any insurance proceeds are not applied  
to the restoration of the damaged property, damage to such borrower's           
condominium unit or the related building could significantly reduce the value of
the Mortgaged Property.                                                         

Since the amount of hazard insurance a Master Servicer or the           
Seller/Servicers, or the Servicer, as applicable, will cause to be maintained on
the Mortgaged Properties declines as the principal balances owing on the related
Mortgage Loans decrease, and since residential properties have historically     
appreciated in value over time, in the event of partial loss, hazard insurance  
proceeds may be insufficient to restore fully the damaged property. See         
'Description of Credit Enhancements -- Special Hazard Insurance' for a          
description of the limited protection afforded by the Special Hazard Insurance  
Policy, Letter of Credit or Reserve Fund, if any is obtained, against losses    
occasioned by certain hazards which are otherwise uninsured against, as well as 
against losses caused by the application of the clause described in the         
preceding paragraph.                                                            

 Any losses incurred with respect to Mortgage Loans due to uninsured risks
(including earthquakes, mudflows and floods) or insufficient hazard insurance   
proceeds could affect distributions to the Certificateholders.                  

DESCRIPTION OF CREDIT ENHANCEMENTS

To the extent provided in the applicable Prospectus Supplement, credit  
enhancement for each Series of Certificates may be comprised of one or more of  
the following components, each of which will have a dollar limit. Credit        
enhancement components may include coverage with respect to losses that are (i) 
attributable to the Mortgagor's failure to make any payment of principal or     
interest as required under the Mortgage Note, but not including Special Hazard  
Losses, Extraordinary Losses (as defined below) or other losses resulting from  
damage to a Mortgaged Property, Bankruptcy Losses or Fraud Losses (any such     
loss, a 'Defaulted Mortgage Loss'); (ii) of a type generally covered by a       
Special Hazard Insurance Policy (any such loss, a 'Special Hazard Loss');       
(iii) attributable to certain actions which may be taken by a bankruptcy court  
in connection with a Mortgage Loan, including a reduction by a bankruptcy court 
of the principal balance of or the Mortgage Interest Rate on a Mortgage Loan or 
an extension of its maturity (any such loss, a 'Bankruptcy Loss'); (iv) incurred
on defaulted Mortgage Loans as to which there was fraudulent conduct or         
negligence by either the Seller, the Seller/Servicer, the Servicer or the       
Mortgagor in connection with such Mortgage Loans (any such loss, a 'Fraud       
Loss'); and (v) attributable to shortfalls in the payment of amounts due to one 
or more Classes of Certificates. Losses occasioned by war, civil insurrection,  
certain governmental actions, nuclear reaction, chemical contamination, errors  
in design, faulty workmanship or materials or waste by the Mortgagor            
('Extraordinary Losses') will not be covered. To the extent that the credit     
enhancement for any Series of Certificates is exhausted, the Certificateholders 
will bear all further risks of loss not otherwise insured against.              

    As set forth below and in the applicable Prospectus Supplement, (i) coverage
with respect to Defaulted Mortgage Losses may be provided by one or more of a   
Letter of Credit, Reserve Fund or a Mortgage Pool Insurance Policy, (ii)        
coverage with respect to Special Hazard Losses may be provided by one or more of
a Letter of Credit, Reserve Fund or a Special Hazard Insurance Policy (any      
instrument, to the extent providing such coverage, a 'Special Hazard            
Instrument'); (iii) coverage with respect to Bankruptcy Losses may be provided  
by one or more of a Letter of Credit, Reserve Fund or Bankruptcy Bond (any      
instrument, to the extent providing such coverage, a 'Bankruptcy Instrument')   
and (iv) coverage with respect to Fraud Losses may be provided by one or more of
a Letter of Credit, Reserve Fund or Fraud Bond (any instrument, to the extent   
providing such coverage, a 'Fraud Instrument'). In addition, if provided in the 
applicable Prospectus Supplement, in lieu of or in addition to any or all of the

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foregoing arrangements, credit enhancement may be in the form of subordination  
of one or more Classes of Certificates to provide credit support to one or more 
other Classes of Certificates. Credit support may also be provided in the form  
of an insurance policy covering the risk of collection and adequacy of any      
Additional Collateral provided in connection with any Additional Collateral     
Loan, subject to the limitations set forth in any such insurance policy.        

The amounts and types of credit enhancement arrangements as well as the 
provider thereof, if applicable, with respect to each Series of Certificates    
will be set forth in the related Prospectus Supplement. To the extent provided  
in the applicable Prospectus Supplement and the Pooling Agreement, the credit   
enhancement arrangements may be periodically modified, reduced and substituted  
for based on the aggregate outstanding principal balance of the Mortgage Loans  
covered thereby. If specified in the applicable Prospectus Supplement, credit   
support for a Series of Certificates may cover one or more other series of      
certificates issued by the Company or others.                                   

  Unless otherwise specified in the applicable Prospectus Supplement, to the
extent permitted by any applicable rating agency and provided that the then     
current ratings of the Certificates are maintained, coverage under any credit   
enhancement may be cancelled or reduced.                                        

The descriptions of any credit enhancement instruments included in this 
Prospectus or any Prospectus Supplement and the coverage thereunder do not      
purport to be complete and are qualified in their entirety by reference to the  
actual forms of governing documents, copies of which are available upon request.

MORTGAGE POOL INSURANCE                                                         

    A mortgage pool insurance policy (a 'Mortgage Pool Insurance Policy') may be
obtained for a particular Series of Certificates. Any such policy will be       
obtained by the Company or the Servicer, as applicable, from a Qualified Insurer
for the Mortgage Pool, covering loss by reason of the default in payments on any
Mortgage Loans included therein that are not covered as to their entire         
outstanding principal balances by Primary Insurance, FHA Insurance or VA        
Guarantees. Each Mortgage Pool Insurance Policy will cover all or a portion of  
those Mortgage Loans in a Mortgage Pool in an amount to be specified in the     
applicable Prospectus Supplement or in the related Current Report on Form 8-K.  
The term 'Mortgage Pool Insurance Policy' wherever used in this Prospectus or   
any Supplement shall refer to one or more such Mortgage Pool Insurance Policies 
as the context may require. The identity of the insurer or insurers and certain 
financial information with respect to the insurer or insurers for each Mortgage 
Pool will be contained in the applicable Prospectus Supplement or in the related
Current Report on Form 8-K. The Trustee will be the named insured under any     
Mortgage Pool Insurance Policy. A Mortgage Pool Insurance Policy is not a       
blanket policy against loss, since claims thereunder may only be made respecting
particular defaulted Mortgage Loans and only upon the satisfaction of certain   
conditions precedent described below.                                           

    Any Mortgage Pool Insurance Policy will provide that no claim may be validly
presented thereunder unless (i) hazard insurance on the property securing the   
defaulted Mortgage Loan has been kept in force and real estate taxes and other  
protection and preservation expenses have been paid, (ii) if there has been     
physical loss or damage to the Mortgaged Property, it has been restored to its  
condition (reasonable wear and tear excepted) at the Cut-Off Date, (iii) any    
required Primary Insurance Policy is in effect for the defaulted Mortgage Loan  
and a claim thereunder has been submitted and settled, and (iv) the insured has 
acquired good and merchantable title to the Mortgaged Property free and clear of
liens except permitted encumbrances. Assuming the satisfaction of these         
conditions, the insurer will have the option to either (i) purchase the property
securing the defaulted Mortgage Loan at a price equal to the principal balance  
thereof, plus accrued and unpaid interest at the Mortgage Interest Rate to the  
date of purchase, less the amount of any loss paid under a Primary Insurance    
Policy, if any, or (ii) pay the difference between the proceeds received from an
approved sale of the property and the principal balance of the defaulted        
Mortgage Loan, plus accrued and unpaid interest at the Mortgage Interest Rate to
the date of payment of the claim, less the amount of such loss paid under a     
Primary Insurance Policy, if any. In each case, the insurer will reimburse the  
Master Servicer and the Seller/Servicer, or the Servicer with respect to Series 
of Certificates for which the Company will not act as Master Servicer, for      
certain expenses incurred by them.                                              

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An endorsement (an 'Advance Claims Endorsement') may be issued to any   
Mortgage Pool Insurance Policy which provides that the Insurer will make        
advances of monthly principal and interest payments on Mortgage Loans as to     
which the Seller/Servicer, or the Servicer with respect to Series of            
Certificates for which the Company will not act as Master Servicer, has not     
received a payment from the related Mortgagor and neither the Seller/Servicer   
nor the Master Servicer, or the Servicer, as applicable, has advanced such      
payment. The presence of such endorsement, if any, will be disclosed in the     
Prospectus Supplement.                                                          

An endorsement may also be issued to any Mortgage Pool Insurance Policy 
which provides that the insurer will pay claims presented under the Mortgage    
Pool Insurance Policy although claims made against the applicable Primary       
Insurance Policy have not been settled due to the insolvency, bankruptcy,       
receivership or assignment for the benefit of creditors of the issuer of the    
Primary Insurance Policy. The presence of such endorsement, if any, will be     
disclosed in the Prospectus Supplement.                                         

  Unless otherwise specified in the applicable Prospectus Supplement, to the
extent permitted by any applicable rating agency and provided that the then     
current ratings of the Certificates are maintained, coverage under any Mortgage 
Pool Insurance Policy may be cancelled or reduced.                              

The original amount of coverage under any Mortgage Pool Insurance Policy
will be reduced over the life of the Certificates by the aggregate dollar amount
of claims paid, less certain amounts realized by the insurer upon disposition of
foreclosed properties. The amount of claims paid includes certain expenses      
incurred by the Company or a Servicing Entity, as applicable, as Master         
Servicer, or the Servicer with respect to Series of Certificates for which there
will be no Master Servicer, as well as accrued interest on delinquent Mortgage  
Loans to the date of payment of the claim. Accordingly, if aggregate net claims 
paid under any Mortgage Pool Insurance Policy reach the original policy limit,  
coverage thereunder will lapse and any further losses will be borne by          
Certificateholders. In addition, in such event, the Company or a Servicing      
Entity, as applicable, as Master Servicer, or the Servicer, as applicable, will 
not be obligated (unless sufficient recoveries from other sources are expected) 
to make any further Advances, since such Advances would no longer be ultimately 
recoverable under the Mortgage Pool Insurance Policy. See 'Description of       
Certificates -- Advances'.                                                      

   Since the property subject to a defaulted Mortgage Loan must be restored to
its original condition prior to claiming against the insurer, no Mortgage Pool  
Insurance Policy will provide coverage against hazard losses. As set forth under
'Primary Insurance, FHA Mortgage Insurance, VA Mortgage Guaranty, Hazard        
Insurance; Claims Thereunder', the hazard insurance policies covering the       
Mortgage Loans typically exclude from coverage physical damage resulting from a 
number of causes, and even when the damage is covered, may afford recoveries    
which are significantly less than the full replacement of such losses. Further, 
any Special Hazard Insurance Policy which may be obtained does not cover all    
risks, and such coverage will be limited in amount. See ' -- Special Hazard     
Insurance' below. Certain hazard risks will, as a result, be uninsured against  
and will therefore be borne by Certificateholders.                              

A Mortgage Pool Insurance Policy may include a provision permitting the 
insurer to purchase defaulted Mortgage Loans from the Trust.                    

 See ' -- The Fraud Bond' below for a discussion of the possible effect of
fraudulent conduct or negligence by the Seller, the Seller/Servicer, the        
Servicer or the Mortgagor with respect to a Mortgage Loan on the coverage of a  
Mortgage Pool Insurance Policy.                                                 

SUBORDINATION                                                                   

   If so specified in the applicable Prospectus Supplement, distributions with
respect to scheduled principal, Principal Prepayments, interest or any          
combination thereof that otherwise would have been payable to one or more       
Classes of Certificates of a Series (the 'Subordinated Certificates') will      
instead be payable to holders of one or more other Classes of such Series (the  
'Senior Certificates') under the circumstances and to the extent specified in   
the Prospectus Supplement. If specified in the applicable Prospectus Supplement,
delays in receipt of scheduled payments on the Mortgage Loans and losses on     
defaulted Mortgage Loans will be borne first by the various Classes of          
Subordinated Certificates and thereafter by the various Classes of Senior       
Certificates, in each case under the circumstances and subject to the           
limitations specified in the Prospectus Supplement. The aggregate distributions 
in respect of                                                                   

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delinquent payments on the Mortgage Loans over the lives of the Certificates or 
at any time, the aggregate losses in respect of defaulted Mortgage Loans which  
must be borne by the Subordinated Certificates by virtue of subordination and   
the amount of the distributions otherwise distributable to the Subordinated     
Certificateholders that will be distributable to Senior Certificateholders on   
any Distribution Date may be limited as specified in the applicable Prospectus  
Supplement. If the aggregate distribution with respect to delinquent payments on
the Mortgage Loans or aggregate losses in respect of such Mortgage Loans were to
exceed the total amounts payable and available for distribution to holders of   
Subordinated Certificates or, if applicable, were to exceed the specified       
maximum amount, holders of Senior Certificates could experience losses on the   
Certificates.                                                                   

In addition to or in lieu of the foregoing, if so specified in the      
applicable Prospectus Supplement, all or any portion of distributions otherwise 
payable to holders of Subordinated Certificates on any Distribution Date may    
instead be deposited into one or more reserve accounts (the 'Reserve Account')  
established by the Trustee. If so specified in the applicable Prospectus        
Supplement, such deposits may be made on each Distribution Date, on each        
Distribution Date for specified periods or until the balance in the Reserve     
Account has reached a specified amount and, following payments from the Reserve 
Account to holders of Senior Certificates or otherwise, thereafter to the extent
necessary to restore the balance in the Reserve Account to required levels, in  
each case as specified in the Prospectus Supplement. If so specified in the     
applicable Prospectus Supplement, amounts on deposit in the Reserve Account may 
be released to the Company, a Servicing Entity, the Servicer or the Seller, as  
applicable, or the holders of any Class of Certificates at the times and under  
the circumstances specified in the Prospectus Supplement.                       

If specified in the applicable Prospectus Supplement, various Classes of
Senior Certificates and Subordinated Certificates may themselves be subordinate 
in their right to receive certain distributions to other Classes of Senior and  
Subordinated Certificates, respectively, through a cross support mechanism or   
otherwise.                                                                      

As between Classes of Senior Certificates and as between Classes of     
Subordinated Certificates, distributions may be allocated among such classes (i)
in the order of their scheduled final distribution dates, (ii) in accordance    
with a schedule or formula, (iii) in relation to the occurrence of events, or   
(iv) otherwise, in each case as specified in the applicable Prospectus          
Supplement. As between Classes of Subordinated Certificates, payments to holders
of Senior Certificates on account of delinquencies or losses and payments to any
Reserve Account will be allocated as specified in the Prospectus Supplement.    

THE FRAUD BOND                                                                  

    Some or all of the Primary Insurance Policies covering Mortgage Loans in any
Mortgage Pool may contain an exclusion from coverage for Fraud Losses. To       
provide limited protection to Certificateholders against losses in the event    
that coverage relating to a Mortgage Loan which otherwise would have been       
available under a Primary Insurance Policy is not ultimately available by reason
of such an exclusion, if so specified in the applicable Prospectus Supplement, a
Fraud Instrument may be obtained or established by the Company or the Servicer, 
as applicable, for the Mortgage Pool. The type, coverage amount and term of any 
such Fraud Instrument will be disclosed in the applicable Prospectus Supplement 
or in the related Current Report on Form 8-K, and the coverage amount may be    
cancelled or reduced during the life of the Mortgage Pool, provided that the    
then current ratings of the Certificates will not be adversely affected thereby.
The Company, a Servicing Entity or the Servicer, as applicable, may also replace
the initial Fraud Instrument with any other type of Fraud Instrument, provided  
that the then current ratings of the Certificates will not be adversely affected
thereby. The identity of the issuer of any Fraud Bond or the Letter of Credit   
providing such coverage and certain financial information with respect to such  
issuer will be contained in the applicable Prospectus Supplement or related     
Current Report on Form 8-K.                                                     

  In addition, the Company understands that, regardless of whether exclusion
language such as that described above is included in the insurance documents, it
is the policy of some or all issuers of Primary Insurance Policies and of       
Mortgage Pool Insurance Policies to deny coverage in circumstances involving    
fraudulent conduct or negligence by either the Seller, the Seller/Servicer, the 
Servicer or the Mortgagor. It is unclear whether any such denial would be upheld
by a court. Neither the repurchase obligation of the Company or the Servicing   
Entity, as applicable, with respect to Series of Certificates as to which the   
Company and/or a Servicing Entity will act as Master Servicer, or the Seller    
with respect to Series of                                                       

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Certificates as to which there will be no Master Servicer, nor any of the Fraud 
Instruments described above would apply to any such denial of coverage unless,  
as described above, such denial is based upon a specific exclusion relating to  
fraudulent conduct or negligence which is included in a Primary Insurance       
Policy.                                                                         

THE BANKRUPTCY BOND                                                             

 The Prospectus Supplement for certain Series may specify that the Company
and/or a Servicing Entity, as Master Servicer, or the Servicer with respect to  
Series of Certificates as to which there will be no Master Servicer, has        
undertaken to pay to the Trustee for the benefit of Certificateholders any      
portion of the principal balance of a Mortgage Loan which becomes unsecured     
pursuant to a proceeding under Chapter 7, 11 or 13 of the Federal Bankruptcy    
Code. If such obligation is undertaken, the Company and/or a Servicing Entity,  
as Master Servicer, or the Servicer, as applicable, will also agree to pay to   
the Trustee for the benefit of Certificateholders any shortfall in payment of   
principal and interest resulting from the recasting of any originally scheduled 
monthly principal and interest payment pursuant to a ruling under the Bankruptcy
Code. These payment obligations will be subject to the limitations specified in 
the applicable Pooling Agreement. The Company and/or Servicing Entity, as Master
Servicer, or the Servicer, as applicable, will have the option, in lieu of      
making such payments, to repurchase any Mortgage Loan affected by bankruptcy    
court rulings. To insure the Company's or Servicing Entity's, as Master         
Servicer, or the Servicer's obligation to make the payments described above, the
Company and/or a Servicing Entity, as Master Servicer, or the Servicer, as      
applicable, will obtain or establish a Bankruptcy Instrument in an initial      
amount specified in the Prospectus Supplement or in the related Current Report  
on Form 8-K. The Prospectus Supplement or Current Report on Form 8-K may also   
specify that, provided that the then current ratings of the Certificates are    
maintained, coverage under any Bankruptcy Instrument may be cancelled or        
reduced. The Master Servicer with respect to Series of Certificates as to which 
the Company and/or a Servicing Entity will act as Master Servicer, or the       
Servicer with respect to Series of Certificates as to which there will be no    
Master Servicer, may also replace the initial method pursuant to which such     
coverage is provided with either of the other two alternative methods, provided 
that the then current ratings of the Certificates will not be adversely affected
thereby.                                                                        

SPECIAL HAZARD INSURANCE                                                        

   A Special Hazard Insurance Instrument may be established or obtained by the
Company, Servicing Entity or the Servicer, as applicable, for certain Series.   
Any Special Hazard Insurance Instrument will, subject to limitations described  
below, protect the holders of the Certificates evidencing such Mortgage Pool    
from (i) loss by reason of damage to properties subject to defaulted Mortgage   
Loans covered thereby caused by certain hazards (including earthquakes in some  
geographic areas, mud flows and floods) not insured against under customary     
standard forms of fire and hazard insurance policies with extended coverage, and
(ii) loss on such loans caused by reason of the application of the co-insurance 
clause typically contained in hazard insurance policies. The Company and/or a   
Servicing Entity, as Master Servicer, with respect to Series of Certificates as 
to which the Company and/or a Servicing Entity will act as Master Servicer, or  
the Servicer with respect to Series of Certificates as to which there will be no
Master Servicer, may also replace the initial method pursuant to which such     
coverage is provided with either of the other two alternative methods, provided 
that the then current ratings of the Certificates will not be adversely affected
thereby. The Prospectus Supplement or Current Report on Form 8-K may also       
specify that, provided the then current ratings of the Certificates are         
maintained, coverage under any Special Hazard Instrument may be cancelled or    
reduced. Any Special Hazard Insurance Policy will be issued by an insurance     
company licensed to transact a property and casualty insurance business in each 
state in which Mortgaged Properties covered thereby are located. The identity of
the issuer of any Special Hazard Insurance Policy or the Letter of Credit       
providing such coverage and certain financial information with respect to such  
issuer will be contained in the related Prospectus Supplement. No Special Hazard
Insurance Instrument will cover Extraordinary Losses.                           

Subject to the foregoing limitations, the terms of any Special Hazard   
Insurance Instrument will provide generally that, where there has been damage to
property securing a defaulted Mortgage Loan covered by such instrument and such 
damage is not fully covered by the hazard insurance policy                      

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maintained with respect to such property, the Special Hazard Insurance          
Instrument will pay either (i) the cost of repair of such property or (ii) the  
unpaid principal balance of such Mortgage Loan at the time of an approved sale  
of such property, plus accrued interest at the Mortgage Interest Rate to the    
date of claim settlement and certain expenses incurred in respect of such       
property, less any net proceeds upon the sale of such property. In either case, 
the amount paid under any Special Hazard Insurance Instrument will be reduced by
the proceeds, if any, received under the hazard insurance policy maintained with
respect to such property. It is expected that the Mortgage Pool Insurer, if any,
will represent to the Company and/or a Servicing Entity, as Master Servicer, or 
the Servicer, as applicable, that restoration of the property securing a        
Mortgage Loan from the proceeds described under (i) above will satisfy the      
condition under any related Mortgage Pool Insurance Policy that the property    
securing a defaulted Mortgage Loan be restored before a claim under any such    
policy may be validly presented in respect of such Mortgage Loan. The payment   
described under (ii) above will render unnecessary presentation of a claim in   
respect of such Mortgage Loan under any Mortgage Pool Insurance Policy.         
Therefore, so long as any Mortgage Pool Insurance Policy for a Series of        
Certificates remains in effect, the decision to pay the cost of repair rather   
than to pay the unpaid principal balance of the related Mortgage Loan, plus     
accrued interest and certain expenses, will not affect the amount of the total  
insurance proceeds paid to the holders of the Certificates of that Series with  
respect to such Mortgage Loan, but will affect the amount of special hazard     
insurance coverage remaining under any Special Hazard Insurance Instrument and  
the coverage remaining under any Mortgage Pool Insurance Policy obtained for    
that Series.                                                                    

LETTER OF CREDIT                                                                

  If any component of credit enhancement as to any Series of Certificates is
to be provided by a letter of credit (the 'Letter of Credit'), a bank or other  
entity (the 'Letter of Credit Bank') will deliver to the Trustee an irrevocable 
Letter of Credit. The Letter of Credit Bank and certain information with respect
thereto, as well as the amount available under the Letter of Credit with respect
to each component of credit enhancement, will be specified in the applicable    
Prospectus Supplement. The Letter of Credit will expire on the expiration date  
set forth in the related Prospectus Supplement, unless earlier terminated or    
extended in accordance with its terms.                                          

   The Letter of Credit may also provide for the payment of Advances which the
Company or Servicing Entity, as applicable, as Master Servicer, with respect to 
Series of Certificates as to which the Company will act as Master Servicer, or  
the Servicer with respect to Series of Certificates as to which there will be no
Master Servicer, would be obligated to make with respect to delinquent monthly  
payments.                                                                       

RESERVE FUND                                                                    

If so specified in the related Prospectus Supplement, the Company, a    
Servicing Entity, the Servicer or the Seller, as applicable, will deposit or    
cause to be deposited in a reserve fund (a 'Reserve Fund') cash or Eligible     
Investments in specified amounts, or any other instruments satisfactory to the  
rating agency or agencies rating the Certificates offered pursuant to such      
Prospectus Supplement, which will be applied and maintained in the manner and   
under the conditions specified in such Prospectus Supplement. In the alternative
or in addition to such deposit, to the extent described in the related          
Prospectus Supplement, a Reserve Fund may be funded through application of all  
or a portion of amounts otherwise payable on one or more related Classes of     
Certificates, from Retained Yield, or otherwise. Amounts in a Reserve Fund may  
be used to provide one or more components of credit enhancement, or applied to  
reimburse the Company or Servicing Entity, as applicable, as Master Servicer,   
with respect to Series of Certificates as to which the Company and/or a         
Servicing Entity will act as Master Servicer, or the Servicer with respect to   
Series of Certificates as to which there will be no Master Servicer, for        
outstanding Advances, or may be used for other purposes, in the manner and to   
the extent specified in the related Prospectus Supplement. Unless otherwise     
provided in the related Prospectus Supplement, any such Reserve Fund will not be
deemed to be part of the related Trust Fund.                                    

  Amounts deposited in any Reserve Fund for a Series of Certificates will be
invested in Eligible Investments by, or at the direction of, and for the benefit
of the Company or Servicing Entity, as applicable, as Master Servicer, or the   
Certificate Administrator, as applicable, or any other person named in the      
related Prospectus Supplement. Unless otherwise specified in the applicable     
Prospectus Supplement,                                                          

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any amounts remaining in the Reserve Fund upon the termination of the Trust Fund
will be returned to whomever deposited such amounts in the Reserve Fund.        

CERTIFICATE INSURANCE POLICIES                                                  

If so specified in the related Prospectus Supplement, the Company or the
Servicer may obtain one or more certificate insurance policies, issued by       
insurers acceptable to the rating agency or agencies rating the Certificates    
offered pursuant to such Prospectus Supplement, insuring the holders of one or  
more Classes of Certificates the payment of amounts due in accordance with the  
terms of such Class or Classes of Certificates, subject to such limitations and 
exceptions as are set forth in the applicable Prospectus Supplement.            

MAINTENANCE OF CREDIT ENHANCEMENTS; CLAIMS THEREUNDER                           
AND OTHER REALIZATION UPON DEFAULTED MORTGAGE LOANS                             

For each Series of Certificates which will be covered by a Mortgage Pool
Insurance Policy, or a Letter of Credit established in lieu of such policy (such
coverage to be disclosed in the applicable Prospectus Supplement), the Company  
and/or Servicing Entity, as Master Servicer, with respect to Series of          
Certificates as to which the Company will act as Master Servicer, or the        
Servicer with respect to Series of Certificates as to which there will be no    
Master Servicer, will exercise its best reasonable efforts to keep such Mortgage
Pool Insurance Policy or Letter of Credit in full force and effect throughout   
the term of the Pooling Agreement, unless coverage thereunder has been exhausted
through the payment of claims or until such instrument is replaced in accordance
with the terms of the Pooling Agreement. Unless otherwise specified in the      
applicable Prospectus Supplement, the Company and/or Servicing Entity, as Master
Servicer, or the Servicer, as applicable, will agree to pay the premiums for any
Mortgage Pool Insurance Policy, and the fee for any Letter of Credit, on a      
timely basis. In the event that the insurer under the Mortgage Pool Insurance   
Policy ceases to be a Qualified Insurer (as defined in the Pooling Agreement),  
or the Letter of Credit Bank ceases to be acceptable to the agency or agencies, 
if any, rating the Series, the Company or Servicing Entity, as applicable, as   
Master Servicer, or the Servicer, as applicable, will use its best reasonable   
efforts to obtain from another Qualified Insurer or letter of credit issuer a   
replacement policy or letter of credit comparable to the Mortgage Pool Insurance
Policy or Letter of Credit which it replaces, with total coverage equal to the  
then outstanding coverage of the Mortgage Pool Insurance Policy or Letter of    
Credit, provided that if the cost of the replacement policy or letter of credit 
is greater than the cost of the Mortgage Pool Insurance Policy or Letter of     
Credit being replaced, the coverage of the replacement policy or letter of      
credit for a Series of Certificates may be reduced to a level such that its     
premium rate or cost does not exceed 150% of the premium rate or cost of the    
Mortgage Pool Insurance Policy or Letter of Credit for a Series which is rated  
by one or more rating agencies, or 100% of the premium rate or cost for such    
policy or Letter of Credit for a Series which is not so rated.                  

    In addition, the Company and/or Servicing Entity, as Master Servicer, or the
Servicer, as applicable, may substitute at any time a Mortgage Pool Insurance   
Policy or Letter of Credit for an existing Mortgage Pool Insurance Policy or    
Letter of Credit. In no event, however, may the Company and/or Servicing Entity,
as Master Servicer, or the Servicer, as applicable, provide a Letter of Credit  
in lieu of a Mortgage Pool Insurance Policy, or vice-versa, or substitute one   
such instrument for another, except under the circumstances detailed in the     
preceding paragraph, if such action will impair the then current ratings, if    
any, of the Certificates.                                                       

Unless otherwise specified in the applicable Prospectus Supplement, each
Seller/Servicer with respect to Series of Certificates as to which the Company  
and/or a Servicing Entity will act as Master Servicer, or the Servicer with     
respect to Series of Certificates as to which there will be no Master Servicer, 
will cause a Primary Insurance Policy to be maintained in full force and effect 
with respect to each Mortgage Loan it services with a loan-to-value ratio in    
excess of 80%; provided, however, that if the loan-to-value ratio of a Mortgage 
Loan based on a subsequent appraisal of the Mortgaged Property is less than 80%,
such Primary Insurance Policy may be terminated, if so specified in the         
applicable Prospectus Supplement. Each Seller/Servicer or the Servicer, as      
applicable, will agree to pay the premium for each Primary Insurance Policy on a
timely basis in the event that the Mortgagor does not make such payments. See   

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'Primary Insurance, FHA Mortgage Insurance, VA Mortgage Guaranty, Hazard        
Insurance; Claims Thereunder -- Primary Insurance' herein.                      

 For each Series of Certificates which will be covered by a Special Hazard
Insurance Instrument (such coverage to be disclosed in the applicable Prospectus
Supplement), the Company and/or Servicing Entity, as Master Servicer with       
respect to Series of Certificates as to which the Company and/or a Servicing    
Entity will act as Master Servicer, or the Servicer with respect to Series of   
Certificates as to which there will be no Master Servicer, will exercise its    
best reasonable efforts to keep such Special Hazard Insurance Instrument in full
force and effect throughout the term of the Pooling Agreement, unless coverage  
thereunder has been exhausted through the payment of claims or until such       
Special Hazard Insurance Instrument has been replaced in accordance with the    
terms of the Pooling Agreement. So long as any applicable rating on a Series of 
Certificates will be maintained, the Company and/or Servicing Entity, as Master 
Servicer, or the Servicer, as applicable, may at any time replace the initial   
instrument providing special hazard coverage with either of the other two       
alternative methods. Unless otherwise specified in the applicable Prospectus    
Supplement, the Company or Servicing Entity, as Master Servicer, or the         
Servicer, as applicable, will agree to pay the premium for any Special Hazard   
Insurance Policy (or Letter of Credit obtained in lieu thereof) on a timely     
basis. Unless otherwise specified in the applicable Prospectus Supplement, any  
such policy will provide for a fixed premium rate on the declining balance of   
the Mortgage Loans. In the event that any Special Hazard Insurance Policy is    
cancelled or terminated for any reason other than the exhaustion of total policy
coverage, the Company, Servicing Entity or the Servicer, as applicable, is      
obligated either to substitute a Letter of Credit or Reserve Fund or to exercise
its best reasonable efforts to obtain from another insurer a replacement policy 
comparable to such Special Hazard Insurance Policy with a total coverage which  
is equal to the then existing coverage of such Special Hazard Insurance Policy; 
provided, however, that if the cost of any such replacement policy shall be     
greater than the cost of the original Special Hazard Insurance Policy, the      
amount of coverage of such replacement policy may be reduced to a level such    
that the cost shall be equal to the cost of the original Special Hazard         
Insurance Policy. As indicated above, in lieu of obtaining a replacement Special
Hazard Insurance Policy, the Company, Servicing Entity or the Servicer, as      
applicable, may obtain a Letter of Credit or establish a Reserve Fund in        
accordance with terms prescribed by any applicable rating agency so that any    
rating obtained for the Certificates will not be impaired.                      

   For each Series of Certificates which will be covered by a Fraud Instrument
(such coverage to be disclosed in the applicable Prospectus Supplement), the    
Company and/or a Servicing Entity, as Master Servicer, with respect to Series of
Certificates as to which the Company and/or a Servicing Entity will act as      
Master Servicer, or the Servicer with respect to Series of Certificates as to   
which there will be no Master Servicer, will exercise its best reasonable       
efforts to maintain and keep any such Fraud Instrument in full force and effect 
throughout the required term as set forth in the applicable Prospectus          
Supplement, unless coverage thereunder has been exhausted through the payment of
claims. The Company, Servicing Entity or the Servicer, as applicable, will agree
to pay the premium for any Fraud Bond or Bankruptcy Bond on a timely basis.     

For each Series of Certificates or Class of Certificates which will be  
covered by a certificate insurance policy or a Letter of Credit or Reserve Fund 
(such coverage to be disclosed in the applicable Prospectus Supplement), the    
Company and/or a Servicing Entity, as Master Servicer, with respect to Series of
Certificates as to which the Company will act as Master Servicer, or the        
Servicer with respect to Series of Certificates as to which there will be no    
Master Servicer, will exercise its best reasonable efforts to maintain and keep 
any such certificate insurance policy, Letter of Credit or Reserve Fund in full 
force and effect throughout the required term set forth in the applicable       
Prospectus Supplement. Unless otherwise specified in the Prospectus Supplement, 
the Company, Servicing Entity or the Servicer, as applicable, will agree to pay 
the premium for any certificate insurance policy on a timely basis.             

  The Company or Servicing Entity, as applicable, as Master Servicer, or the
Seller/Servicers, with respect to Series of Certificates as to which the Company
will act as Master Servicer, or the Servicer with respect to Series of          
Certificates as to which there will be no Master Servicer, on behalf of the     
Trustee and Certificateholders, will present claims to the issuer of any        
applicable Primary Insurance Policy, FHA Insurance Policy, VA Guaranty, Mortgage
Pool Insurance Policy, Special Hazard Insurance Policy or Letter of Credit, or  
under any Reserve Fund or other form of credit enhancement, and will take such  
reasonable                                                                      

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steps as are necessary to permit recovery under such insurance policies or      
alternative coverages respecting defaulted Mortgage Loans. With respect to any  
applicable Fraud Bond, Bankruptcy Bond or certificate insurance policy, the     
Trustee will present claims to the issuer of such bond or policy on behalf of   
the Certificateholders. As set forth above, all collections by the Company or   
Servicing Entity, as applicable, as Master Servicer, or the Seller/Servicer, or 
the Servicer, as applicable, under such policies or alternative coverages that  
are not applied to the restoration of the related Mortgaged Property are to be  
deposited in the applicable Custodial Account for P&I, the Investment Account or
the Certificate Account, subject to withdrawal as heretofore described.         

   If any property securing a defaulted Mortgage Loan is damaged and proceeds,
if any, from the related hazard insurance policy or any applicable Special      
Hazard Insurance Policy (or Letter of Credit or Reserve Fund), as the case may  
be, are insufficient to restore the damaged property to a condition sufficient  
to permit recovery under any applicable Mortgage Pool Insurance Policy or       
Primary Insurance Policy, the Company or Servicing Entity, as applicable, as    
Master Servicer, with respect to Series of Certificates as to which the Company 
and/or Servicing Entity will act as Master Servicer, or the Servicer with       
respect to Series of Certificates as to which there will be no Master Servicer, 
will not be required to expend its own funds to restore the damaged property    
unless it determines (i) that such restoration will increase the proceeds to    
Certificateholders upon liquidation of the Mortgage Loan after reimbursement of 
the Company, Servicing Entity or the Servicer, as applicable, for its expenses  
and (ii) that such expenses will be recoverable to it through Liquidation       
Proceeds or Insurance Proceeds.                                                 

 If recovery under any Mortgage Pool Insurance Policy (or Letter of Credit
established in lieu of such policy), Primary Insurance Policy, FHA Insurance    
Policy or VA Guaranty is not available because the Master Servicer, with respect
to Series of Certificates as to which the Company and/or a Servicing Entity will
act as Master Servicer, or the Servicer with respect to Series of Certificates  
as to which there will be no Master Servicer, has been unable to make the       
determinations described in the second preceding paragraph, or otherwise, the   
Seller/Servicer or the Servicer, as applicable, is, nevertheless, obligated to  
follow such normal practices and procedures as it deems necessary or advisable  
to realize upon the defaulted Mortgage Loan. If the proceeds of any liquidation 
of the property securing the defaulted Mortgage Loan are less than the principal
balance of the defaulted Mortgage Loan plus accrued and unpaid interest thereon 
at the applicable Pass-Through Rate (after deduction of the Retained Yield, if  
any, or a pro rata portion thereof as required by the applicable Pooling        
Agreement), Certificateholders in the aggregate will realize a loss in the      
amount of such difference plus the aggregate of expenses incurred by the Company
or Servicing Entity, as applicable, as Master Servicer, and the Seller/Servicer,
or the Servicer, as applicable, in connection with such proceedings and which   
are reimbursable under the Pooling Agreement. In addition, and as set forth     
above, in the event that the Company or Servicing Entity, as applicable, as     
Master Servicer, or the Servicer, as applicable, has expended its own funds to  
restore damaged property and such funds have not been reimbursed under any      
Special Hazard Insurance Policy or Letter of Credit or Reserve Fund, it will be 
entitled to receive from the Certificate Account, out of related Liquidation    
Proceeds or Insurance Proceeds, an amount equal to such expenses incurred by it,
in which event the Certificateholders may realize a loss up to the amount so    
charged. Since Insurance Proceeds cannot exceed deficiency claims and certain   
expenses incurred by the Company or Servicing Entity, as applicable, as Master  
Servicer, and the Seller/Servicers, or the Servicer, as applicable, no insurance
payments will result in a recovery to Certificateholders which exceeds the      
principal balance of the defaulted Mortgage Loan together with accrued and      
unpaid interest thereon at the applicable Pass-Through Rate. In addition, where 
property securing a defaulted Mortgage Loan can be resold for an amount         
exceeding the principal balance of any related Mortgage Note together with      
accrued interest and expenses, it may be expected that, where retention of any  
such amount is legally permissible, the insurer will exercise its right under   
any related Mortgage Pool Insurance Policy to purchase such property and realize
for itself any excess proceeds. In addition, with respect to certain Series of  
Certificates, if so provided in the applicable Prospectus Supplement, the       
Company or Servicing Entity, as applicable, as Master Servicer, or the Servicer,
as applicable, may have the option to purchase from the Trust Fund any defaulted
Mortgage Loan after a specified period of delinquency. If a defaulted Mortgage  
Loan is not so removed from the Trust Fund, then, upon the final liquidation    
thereof, if a loss is realized which is not covered by any applicable form of   
credit enhancement or other insurance, the Certificateholders will bear such    
loss. However, if a gain results from the final liquidation of a defaulted      
Mortgage Loan which is not required                                             

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by law to be remitted to the related Mortgagor, the Company or Servicing Entity,
as applicable, as Master Servicer, or the Servicer, as applicable, will be      
entitled to retain such gain as additional servicing compensation unless the    
applicable Prospectus Supplement provides otherwise. See 'Description of Credit 
Enhancements'.                                                                  

CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS 

The Mortgages (other than the security agreements with respect to the   
Cooperative Loans) will be either deeds of trust or mortgages, depending upon   
the prevailing practice in the state in which the Mortgaged Property is located.
A mortgage creates a lien upon the real property encumbered by the mortgage. It 
is not prior to the lien for real estate taxes and assessments. Priority between
mortgages depends on their terms and generally on the order of filing with a    
state or county office. There are two parties to a mortgage: the mortgagor, who 
is usually the borrower and homeowner, and the mortgagee, who is the lender.    
Under the mortgage instrument, the mortgagor delivers to the mortgagee a note or
bond and the mortgage. Although a deed of trust is similar to a mortgage, a deed
of trust formally has three parties; the borrower-homeowner, called the trustor 
(similar to a mortgagor), a lender, called the beneficiary (similar to a        
mortgagee), and a third-party grantee, called the trustee. Under a deed of      
trust, the trustor grants the property, irrevocably until the debt is paid, in  
trust, generally with a power of sale, to the trustee to secure payment of the  
obligation. In some cases, a mortgage will also contain a power of sale. The    
trustee's authority under a deed of trust and the mortgagee's authority under a 
mortgage are governed by law, by the express provisions of the deed of trust or 
mortgage and, in some cases, by the directions of the beneficiary. For purposes 
of the following discussion, 'mortgagor' shall, as appropriate, refer to a      
mortgagor or trustor and 'lender' shall refer to a mortgagee or beneficiary. A  
Mortgage Pool may also contain Cooperative Loans which are described below under
' -- Cooperative Loans'.                                                        

COOPERATIVE LOANS                                                               

If specified in the Prospectus Supplement relating to a Series of       
Certificates, the Mortgage Loans may also include Cooperative Loans. Each       
promissory note (a 'Cooperative Note') evidencing a Cooperative Loan will be    
secured by a security interest in shares issued by the related private          
cooperative housing corporation (a 'Cooperative') that owns the related         
apartment building, which is a corporation entitled to be treated as a housing  
cooperative under federal tax law, and in the related proprietary lease or      
occupancy agreement granting exclusive rights to occupy a specific dwelling unit
in the Cooperative's building. The security agreement will create a lien upon or
grant a security interest in the cooperative shares and proprietary lease or    
occupancy agreement, the priority of which will depend on the terms of the      
particular security agreement as well as the order of recordation of the        
agreement (or the filing of the financing statements related thereto) in the    
appropriate recording office or the taking of possession of the cooperative     
shares, depending on the law of the state in which the Cooperative is located.  
Such a lien or security interest is not, in general, prior to liens in favor of 
the Cooperative for unpaid assessments or common charges.                       

Unless otherwise specified in the related Prospectus Supplement, all    
cooperative buildings relating to the Cooperative Loans are located in the      
States of New York and New Jersey. Generally, each Cooperative owns in fee or   
has a leasehold interest in all the real property and owns in fee or leases the 
building and all separate dwelling units therein. The Cooperative is directly   
responsible for property management and, in most cases, payment of real estate  
taxes, other governmental impositions and hazard and liability insurance. If    
there is an underlying mortgage (or mortgages) on the Cooperative's building or 
underlying land, as is generally the case, or an underlying lease of the land,  
as is the case in some instances, the Cooperative, as mortgagor or lessee, as   
the case may be, is also responsible for fulfilling such mortgage or rental     
obligations. An underlying mortgage loan is ordinarily obtained by the          
Cooperative in connection with either the construction or purchase of the       
Cooperative's building or the obtaining of capital by the Cooperative. The      
interest of the occupant under proprietary leases or occupancy agreements as to 
which that Cooperative is the landlord are generally subordinate to the interest
of the holder of an underlying mortgage and to the interest of the holder of a  
land lease. If the Cooperative is unable to meet the payment obligations (i)    
arising under an underlying mortgage, the mortgagee holding an underlying       
mortgage could foreclose on that mortgage and terminate all subordinate         
proprietary leases and occupancy                                                

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agreements or (ii) arising under its land lease, the holder of the landlord's   
interest under the land lease could terminate it and all subordinate proprietary
leases and occupancy agreements. In addition, an underlying mortgage on a       
Cooperative may provide financing in the form of a mortgage that does not fully 
amortize, with a significant portion of principal being due in one final payment
at maturity. The inability of the Cooperative to refinance a mortgage and its   
consequent inability to make such final payment could lead to foreclosure by the
mortgagee. Similarly, a land lease has an expiration date and the inability of  
the Cooperative to extend its term or, in the alternative, to purchase the land,
could lead to termination of the Cooperative's interest in the property and     
termination of all proprietary leases and occupancy agreements. In either event,
a foreclosure by the holder of an underlying mortgage or the termination of the 
underlying lease could eliminate or significantly diminish the value of any     
collateral held by the lender who financed the purchase by an individual        
tenant-stockholder of shares of the Cooperative or, in the case of a Mortgage   
Pool, the collateral securing any related Cooperative Loans.                    

Each Cooperative is owned by shareholders (referred to as               
tenant-stockholders) who, through ownership of stock or shares in the           
Cooperative, receive proprietary leases or occupancy agreements which confer    
exclusive rights to occupy specific dwellings. Generally, a tenant-stockholder  
of a Cooperative must make a monthly maintenance payment to the Cooperative     
pursuant to the proprietary lease, which maintenance payment represents such    
tenant-stockholder's pro rata share of the Cooperative's payments for its       
underlying mortgage, real property taxes, maintenance expenses and other capital
or ordinary expenses. An ownership interest in a Cooperative and accompanying   
occupancy rights may be financed through a Cooperative Loan evidenced by a      
Cooperative Note and secured by an assignment of and a security interest in the 
occupancy agreement or proprietary lease and a security interest in the shares  
of the related Cooperative. The lender generally takes possession of the share  
certificate and a counterpart of the proprietary lease or occupancy agreement   
and a financing statement covering the proprietary lease or occupancy agreement 
and the Cooperative shares is filed in the appropriate state and local offices  
to perfect the lender's interest in its collateral. Subject to the limitations  
discussed below, upon default of the tenant-stockholder, the lender may sue for 
judgment on the Cooperative Note, dispose of the collateral at a public or      
private sale or otherwise proceed against the collateral or tenant-stockholder  
as an individual as provided in the security agreement covering the assignment  
of the proprietary lease or occupancy agreement and the pledge of Cooperative   
shares. See ' -- Foreclosure on Shares of Cooperatives' below.                  

TAX ASPECTS OF COOPERATIVE OWNERSHIP                                            

  In general, a 'tenant-stockholder' (as defined in Section 216(b)(2) of the
Code) of a corporation that qualifies as a 'cooperative housing corporation'    
within the meaning of Section 216(b)(1) of the Code is allowed a deduction under
Section 216(a) of the Code for amounts paid or accrued within his or her taxable
year to the corporation representing his or her proportionate share of certain  
interest expenses and certain real estate taxes allowable as deductions to the  
corporation under Sections 163 and 164 of the Code. In order for a corporation  
to qualify under Section 216(b)(1) of the Code for the taxable year to which    
such interest and tax deductions relate, such section requires, among other     
things, that at least 80% of the gross income of the corporation be derived from
its tenant-stockholders. By virtue of this requirement, the status of a         
corporation for purposes of Section 216(b)(1) of the Code must be determined on 
a year-to-year basis. Consequently, there can be no assurance that Cooperatives 
relating to the Cooperative Loans will qualify under such section for any       
particular year. In the event that such a Cooperative fails to qualify for one  
or more years, the value of the collateral securing any related Cooperative     
Loans could be significantly impaired because no deduction would be allowable to
tenant-stockholders under Section 216(a) of the Code with respect to those      
years. In view of the significance of the tax benefits accorded                 
tenant-stockholders of a corporation that qualifies under Section 216(b)(1) of  
the Code, the likelihood that such a failure would be permitted to continue over
a period of years appears remote.                                               

FORECLOSURE                                                                     

   Foreclosure may be accomplished by judicial action. The action is initiated
by the service of legal pleadings upon all parties having an interest in the    
real property. Delays in completion of the foreclosure may occasionally result  
from difficulties in locating necessary parties defendant. Judicial foreclosure 

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proceedings are generally not contested by any of the parties defendant.        
However, when the lender's right to foreclose is contested, the legal           
proceedings necessary to resolve the issue can be time consuming. After the     
completion of judicial foreclosure, the court would issue a judgment of         
foreclosure and would generally appoint a referee or other court officer to     
conduct the sale of property.                                                   

In many states, foreclosure of a mortgage or deed of trust may also be  
accomplished by a nonjudicial sale under a specific provision in the mortgage or
deed of trust which authorizes the sale of the property at public auction upon  
default by the mortgagor. The laws of the various states establish certain      
notice requirements for non-judicial foreclosure sales. In some states, notice  
of default must be recorded and sent to the mortgagor and to any person who has 
recorded a request for a copy of a notice of default and notice of sale. In     
addition, notice must be provided in some states to certain other persons       
including junior lienholders and any other individual having an interest in the 
real property. In some states, the mortgagor, or any other person having a      
junior encumbrance on the real estate, may, during a reinstatement period, cure 
the default by paying the entire amount in arrears, plus the costs and expenses 
incurred in enforcing the obligation. Generally, state law controls the amount  
of foreclosure expenses and costs, including limited attorneys' fees, which may 
be recovered by a lender. Some states also require a notice of sale to be posted
in a public place and published for a specified period of time in one or more   
newspapers. In addition, some state laws require that a copy of the notice of   
sale be posted on the property and sent to all parties having an interest in the
real property.                                                                  

   In case of foreclosure under either a mortgage or a deed of trust, the sale
by the receiver or other designated officer or by the trustee is a public sale. 
However, because of a number of factors, including the difficulty a potential   
buyer at the sale would have in determining the exact status of title and the   
fact that the physical condition of the property may have deteriorated during   
the foreclosure proceedings, it is uncommon for a third party to purchase the   
property at the foreclosure sale. Rather, it is common for the lender to        
purchase the property from the trustee or referee with a credit bid in an amount
equal to the principal amount of the mortgage or deed of trust, accrued and     
unpaid interest and the expenses of foreclosure. Thereafter, the lender will    
assume the burdens of ownership, including obtaining casualty insurance and     
making such repairs at its own expense as are necessary to render the property  
suitable for sale. The lender will commonly obtain the services of a real estate
broker and pay the broker's commission in connection with the sale of the       
property. Depending upon market conditions, the ultimate proceeds of the sale of
the property may not equal the lender's investment in the property.             

Courts have imposed general equitable principles upon foreclosure       
proceedings. These equitable principles are generally designed to relieve the   
mortgagor from the legal effect of his defaults under the loan documents.       
Examples of judicial remedies that have been fashioned include judicial         
requirements that the lender undertake affirmative and sometimes expensive      
actions to determine the causes for the mortgagor's default and the likelihood  
that the mortgagor will be able to reinstate the loan. In some cases, courts    
have substituted their judgment for the lender's judgment and have required that
lenders reinstate loans or recast payment schedules in order to accommodate     
mortgagors who are suffering from a temporary financial disability. In other    
cases, courts have limited the right of the lender to foreclose if the default  
under the security instrument is not monetary, such as the mortgagor failing to 
adequately maintain or insure the property or the mortgagor executing a second  
mortgage or deed of trust affecting the property. Some courts have been faced   
with the issue of whether or not federal or state constitutional provisions     
reflecting due process concerns for adequate notice require that mortgagors     
receive notices in addition to the statutorily prescribed minimum. For the most 
part, these cases have upheld the notice provisions as being reasonable or have 
found that the foreclosure sale does not involve sufficient state action to     
afford constitutional protections to the mortgagor.                             

FORECLOSURE ON SHARES OF COOPERATIVES                                           

 The Cooperative shares owned by the tenant-stockholder, together with the
rights of the tenant-stockholder under the proprietary lease or occupancy       
agreement, are pledged to the lender and are, in almost all cases, subject to   
restrictions on transfer as set forth in the Cooperative's certificate of       
incorporation and by-laws, as well as in the proprietary lease or occupancy     
agreement. The proprietary lease or occupancy agreement, even while pledged, may
be cancelled by the Cooperative for failure by the tenant-stockholder to pay    
maintenance or other obligations or charges owed by such tenant-stockholder,    

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including mechanics' liens against the Cooperative's building incurred by such  
tenant-stockholder. Generally, maintenance and other obligations and charges    
arising under a proprietary lease or occupancy agreement which are owed to the  
Cooperative are made liens upon the shares to which the proprietary lease or    
occupancy agreement relates. In addition, the proprietary lease or occupancy    
agreement generally permits the Cooperative to terminate such lease or agreement
in the event the borrower defaults in the performance of covenants thereunder.  
Typically, the lender and the Cooperative enter into a recognition agreement    
which, together with any lender protection provisions contained in the          
proprietary lease, establishes the rights and obligations of both parties in the
event of a default by the tenant-stockholder on its obligations under the       
proprietary lease or occupancy agreement. A default by the tenant-stockholder   
under the proprietary lease or occupancy agreement will usually constitute a    
default under the security agreement between the lender and the                 
tenant-stockholder.                                                             

The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy       
agreement, the Cooperative will take no action to terminate such lease or       
agreement until the lender has been provided with notice of and an opportunity  
to cure the default. The recognition agreement typically provides that if the   
proprietary lease or occupancy agreement is terminated, the Cooperative will    
recognize the lender's lien against proceeds from a sale of the shares and the  
proprietary lease or occupancy agreement allocated to the dwelling, subject,    
however, to the Cooperative's right to sums due under such proprietary lease or 
occupancy agreement or which have become liens on the shares relating to the    
proprietary lease or occupancy agreement. The total amount owed to the          
Cooperative by the tenant-stockholder, which the lender generally cannot        
restrict and does not monitor, could reduce the amount realized upon a sale of  
the collateral below the outstanding principal balance of the Cooperative Loan  
and accrued and unpaid interest thereon.                                        

  Recognition agreements also generally provide that in the event the lender
succeeds to the tenant-stockholder's shares and proprietary lease or occupancy  
agreement as the result of realizing upon its collateral for a Cooperative Loan,
the lender must obtain the approval or consent of the board of directors of the 
Cooperative as required by the proprietary lease before transferring the        
Cooperative shares and assigning the proprietary lease. Such approval or consent
is usually based on the prospective purchaser's income and net worth, among     
other factors, and may significantly reduce the number of potential purchasers, 
which could limit the ability of the lender to sell and realize upon the value  
of the collateral. Generally, the lender is not limited in any rights it may    
have to dispossess the tenant-stockholder.                                      

Because of the nature of Cooperative Loans, lenders do not require the  
tenant-stockholder (i.e., the borrower) to obtain title insurance of any type.  
Consequently, the existence of any prior liens or other imperfections of title  
affecting the Cooperative's building or real estate also may adversely affect   
the marketability of the shares allocated to the dwelling unit in the event of  
foreclosure.                                                                    

 A foreclosure on the Cooperative shares is accomplished by public sale in
accordance with the provisions of Article 9 of the Uniform Commercial Code (the 
'UCC') and the security agreement relating to those shares. Article 9 of the UCC
requires that a sale be conducted in a 'commercially reasonable' manner. Whether
a sale has been conducted in a 'commercially reasonable' manner will depend on  
the facts in each case. In determining commercial reasonableness, a court will  
look to the notice given the debtor and the method, manner, time, place and     
terms of the sale and the sale price. Generally, a sale conducted according to  
the usual practice of creditors selling similar collateral will be considered   
reasonably conducted.                                                           

   Article 9 of the UCC provides that the proceeds of the sale will be applied
first to pay the costs and expenses of the sale and then to satisfy the         
indebtedness secured by the lender's security interest. The recognition         
agreement, however, generally provides that the lender's right to reimbursement 
is subject to the right of the Cooperative corporation to receive sums due under
the proprietary lease or occupancy agreement. If there are proceeds remaining,  
the lender must account to the tenant-stockholder for the surplus. Conversely,  
if a portion of the indebtedness remains unpaid, the tenant-stockholder is      
generally responsible for the deficiency. See ' -- Anti-Deficiency Legislation  
and Other Limitations on Lenders' below.                                        

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RIGHTS OF REDEMPTION                                                            

    In some states, after sale pursuant to a deed of trust or foreclosure of the
mortgage, there are statutory periods during which the mortgagor and foreclosed 
junior lienors may redeem the property from the foreclosure sale. One effect of 
the statutory right of redemption is to diminish the ability of the lender to   
sell the foreclosed property because the right of redemption would defeat the   
title of any purchaser from the lender subsequent to foreclosure or sale under a
deed of trust. As a practical matter, the lender may therefore be forced to     
retain the property and pay the expenses of ownership until the redemption      
period has run.                                                                 

ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS                    

Certain states have imposed statutory prohibitions which restrict or    
eliminate the remedies of a lender under a deed of trust or a mortgage. In some 
states, statutes limit the right of the lender to obtain a deficiency judgment  
against the mortgagor following sale under a deed of trust or foreclosure. A    
deficiency judgment would be a personal judgment against the former mortgagor   
equal in most cases to the difference between the net amount realized upon the  
public sale of the real property and the amount due to the lender. Other        
statutes may require the lender to exhaust the security afforded under a deed of
trust or mortgage by foreclosure in an attempt to satisfy the full debt before  
bringing a personal action against the mortgagor. Some state statutes also      
prohibit any deficiency judgment where the loan proceeds were used to purchase  
an owner-occupied dwelling. Finally, other statutory provisions limit any       
deficiency judgment against the former mortgagor following a judicial sale to   
the excess of the outstanding debt over the fair market value of the property at
the time of the public sale. The basic purpose of these statutes is to prevent a
lender from obtaining a large deficiency judgment against the former mortgagor  
as a result of low or no bids at the judicial sale.                             

 Generally, Article 9 of the UCC governs foreclosure on Cooperative shares
and the related proprietary lease or occupancy agreement. Some courts have      
interpreted Article 9 to prohibit or limit a deficiency award in certain        
circumstances, including circumstances where the disposition of the collateral  
(which, in the case of a Cooperative Loan, would be the shares of the           
Cooperative and the related proprietary lease or occupancy agreement) was not   
conducted in a commercially reasonable manner. With respect to mortgage loans   
secured by collateral in addition to the related real properties, realization   
upon the additional collateral may be governed by the UCC in effect under the   
law of the state applicable thereto. Some courts have interpreted the UCC to    
prohibit or limit a deficiency award in certain circumstances, including those  
in which the disposition of the collateral was not conducted in a commercially  
reasonable manner. In some states, the UCC does not apply to liens upon         
additional collateral consisting of certain types of personal property          
(including, for example, bank accounts and, to a certain extent, insurance      
policies and annuities). Realization upon such additional collateral will be    
governed by state laws other than the UCC, and the availability of deficiency   
awards under such state laws may be limited. Whether realization upon any       
Additional Collateral is governed by the UCC or by other state laws, the ability
of secured parties to realize upon the additional collateral may be limited by  
statutory prohibitions that limit remedies in respect of the related mortgage   
loans. Such prohibitions may affect secured parties either independently or in  
conjunction with statutory requirements that secured parties proceed against the
related mortgaged real properties first or against both such mortgaged real     
properties and the additional collateral concurrently. Some state statutes      
require secured parties to exhaust the security afforded by the mortgaged real  
properties through foreclosure before attempting to realize upon the related    
additional collateral (including any third-party guarantees). Other state       
statutes require secured parties to foreclose upon mortgaged real properties and
additional collateral concurrently. In states where statutes limit the rights of
secured parties to obtain deficiency judgments against borrowers or guarantors  
following foreclosure upon the related real mortgaged properties and where      
secured parties either are required or elect to proceed against such mortgaged  
real properties before proceeding against the related additional collateral,    
limitations upon the amounts of deficiency judgments may reduce the amounts that
may be realized by the secured parties upon the disposition of such additional  
collateral. Further, in certain states where secured parties may choose whether 
to proceed against the related mortgaged real properties or additional          
collateral first or against both concurrently, the secured parties, following a 
proceeding against one, may be deemed to have elected a remedy and may be       
precluded from thereafter exercising remedies with respect to the               

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other and resulting in a loss of its lien to such other collateral.             
Consequently, the practical effect of the election requirement, in those states 
permitting such election, is that secured parties will usually proceed against  
both concurrently or against the mortgaged real properties first if prohibited  
from proceeding against both by state law.                                      

In addition to anti-deficiency and related legislation, numerous other  
statutory provisions, including the federal bankruptcy laws and state laws      
affording relief to debtors, may interfere with or affect the ability of the    
secured mortgage lender to collect the full amount of interest due or realize   
upon its security. For example, with respect to federal bankruptcy law, a court 
with federal bankruptcy jurisdiction may permit a mortgagor through his or her  
Chapter 11, Chapter 12 or Chapter 13 rehabilitative plan to cure a monetary     
default in respect of a mortgage loan on the mortgagor's residence by paying    
arrearages within a reasonable time period and reinstating the original mortgage
loan payment schedule even though the lender accelerated the mortgage loan and  
foreclosure proceedings had occurred prior to the filing of the debtor's        
petition. Some courts with federal bankruptcy jurisdiction have approved plans, 
based on the particular facts of the reorganization case, that effected the     
curing of a mortgage loan default by paying arrearages over a number of years.  

    Courts with federal bankruptcy jurisdiction have also held that the terms of
a mortgage loan secured by property of the mortgagor may be modified. These     
courts have held that such modifications may include reducing the amount of each
monthly payment, changing the rate of interest, altering the repayment schedule,
and reducing the lender's security interest to the value of the residence, thus 
leaving the lender in the position of a general unsecured creditor for the      
difference between the value of the residence and the outstanding balance of the
loan. Courts with federal bankruptcy jurisdiction similarly may be able to      
modify the terms of a Cooperative Loan.                                         

The Code provides priority to certain tax liens over the lien of the    
security instrument. Numerous federal and some state consumer protection laws   
impose substantive requirements upon lenders in connection with the origination 
and the servicing of mortgage loans. These laws include the federal Truth-      
in-Lending Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity 
Act, Fair Credit Billing Act, Fair Credit Reporting Act and related statutes.   
These federal laws impose specific statutory liabilities upon lenders who       
originate mortgage loans and who fail to comply with the provisions of the law. 
In some cases, this liability may affect assignees of the mortgage loans.       

ENFORCEABILITY OF CERTAIN PROVISIONS                                            

The standard forms of note, mortgage and deed of trust used by lenders  
generally contain 'due-on-sale' clauses. These clauses permit the lender to     
accelerate the maturity of the loan if the mortgagor sells, transfers or conveys
the property. The enforceability of these clauses was the subject of legislation
and litigation in many states, and in some cases the enforceability of these    
clauses was limited or denied. However, the Garn-St Germain Depository          
Institutions Act of 1982 (the 'Garn-St Germain Act') purports to pre-empt state 
statutory and case law that prohibits the enforcement of 'due-on-sale' clauses  
and permits lenders to enforce these clauses in accordance with their terms,    
subject to certain limited exceptions. The Garn-St Germain Act does 'encourage' 
lenders to permit assumption of loans at the original rate of interest or at    
some other rate less than the average of the original rate and the market rate. 
In addition, certain states have continuing restrictions on the enforceability  
of due-on-sale clauses for certain loans.                                       

  The Garn-St Germain Act also sets forth nine specific instances in which a
mortgage lender covered by the act (including federal savings associations and  
federal savings banks) may not exercise a 'due-on-sale' clause, notwithstanding 
the fact that a transfer of the property may have occurred. These include       
intrafamily transfers, certain transfers by operation of law, leases of less    
than three years and the creation of a junior encumbrance. Regulations          
promulgated under the Garn-St Germain Act by the Federal Home Loan Bank Board   
(now the Office of Thrift Supervision) and statutes in some states also prohibit
the imposition of a prepayment penalty upon the acceleration of a loan pursuant 
to a 'due-on-sale' clause. In addition, a few states have exercised their rights
under the Garn-St Germain Act to limit the enforceability of the due-on-sale    
clauses in certain loans made prior to passage of the Garn-St Germain Act. As of
the date hereof, certain states have taken action to reimpose interest rate     
limits and/or to limit discount points or other charges.                        

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    A consequence of the inability to enforce a due-on-sale clause may be that a
mortgagor's buyer may assume the existing mortgage loan rather than paying it   
off, if such existing loan bears an interest rate below the current market rate,
which may have an impact upon the average life of the Mortgage Loans and the    
number of Mortgage Loans which may be outstanding until maturity.               

  Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the 'Relief Act'), a Mortgagor who enters military service after the   
origination of such Mortgagor's Mortgage Loan (including a Mortgagor who is a   
member of the National Guard or is in reserve status at the time of the         
origination of the Mortgage Loan and is later called to active duty) may not be 
charged interest above an annual rate of 6% during the period of such           
Mortgagor's active duty status, unless a court orders otherwise upon application
of the lender. Any shortfall in interest collections resulting from the         
application of the Relief Act, to the extent not covered by any applicable      
credit enhancements, could result in losses to the Holders of the Certificates. 
In addition, the Relief Act imposes limitations which would impair the ability  
of the Servicer to foreclose on an affected Mortgage Loan during the Mortgagor's
period of active duty status. Thus, in the event that such a Mortgage Loan goes 
into default, there may be delays and losses occasioned by the inability to     
realize upon the Mortgaged Property in a timely fashion.                        

APPLICABILITY OF USURY LAWS                                                     

    Title V of the Depository Institutions Deregulation and Monetary Control Act
of 1980, enacted in March 1980 ('Title V'), provides that state usury           
limitations shall not apply to certain types of residential first mortgage loans
originated by certain lenders after March 31, 1980. A similar federal statute   
was in effect with respect to mortgage loans made during the first three months 
of 1980. The Federal Home Loan Bank Board (now the Office of Thrift Supervision)
has issued regulations governing the implementation of Title V. The statute     
authorizes any state to reimpose interest rate limits by adopting before April  
1, 1983, a law or constitutional provision which expressly rejects application  
of the federal law. In addition, even where Title V is not so rejected, any     
state is authorized to adopt a provision limiting discount points or other      
charges prior to origination on mortgage loans covered by Title V.              

 Under the Company's mortgage purchase program, each Lender is required to
represent and warrant to the Company that all Mortgage Loans are originated in  
full compliance with applicable state laws, including usury laws. Based upon    
such representations and warranties from the Lenders, the Company will make a   
similar representation and warranty in the Pooling Agreement for each Series to 
the Trustee for the benefit of Certificateholders. See 'Description of          
Certificates -- Representations and Warranties'.                                

ALTERNATIVE MORTGAGE INSTRUMENTS                                                

   Alternative mortgage instruments, including adjustable-rate mortgage loans,
originated by non-federally chartered lenders have historically been subjected  
to a variety of restrictions. Such restrictions differed from state to state,   
resulting in difficulties in determining whether a particular alternative       
mortgage instrument originated by a state-chartered lender was in compliance    
with applicable law. These difficulties were alleviated substantially as a      
result of the enactment of Title VIII of the Garn-St Germain Act ('Title VIII').
Title VIII provides that, notwithstanding any state law to the contrary,        
state-chartered banks may originate alternative mortgage instruments in         
accordance with regulations promulgated by the Comptroller of the Currency with 
respect to origination of alternative mortgage instruments by national banks,   
state-chartered credit unions may originate alternative mortgage instruments in 
accordance with regulations promulgated by the National Credit Union            
Administration with respect to origination of alternative mortgage instruments  
by federal credit unions, and all other non-federally chartered housing         
creditors, including state-chartered savings and loan associations,             
state-chartered savings banks and mortgage banking companies, may originate     
alternative mortgage instruments in accordance with the regulations promulgated 
by the Federal Home Loan Bank Board (now the Office of Thrift Supervision) with 
respect to origination of alternative mortgage instruments by federal savings   
and loan associations. Title VIII provides that any state may reject            
applicability of the provisions of Title VIII by adopting, prior to October 15, 
1985, a law or constitutional provision expressly rejecting the applicability of
such provisions. Certain states have taken such action.                         

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ENVIRONMENTAL RISKS                                                             

  Real property pledged as security to a lender may be subject to unforeseen
environmental risks. Under the laws of certain states, contamination of a       
property may give rise to a lien on the property to assure the payment of costs 
of clean-up. In several states such a lien has priority over the lien of an     
existing mortgage against such property.                                        

In addition, under the laws of some states and under the federal        
Comprehensive Environmental Response, Compensation and Liability Act of 1980    
('CERCLA'), a lender may be liable, as an 'owner' or 'operator', for costs      
arising out of releases or threatened releases of hazardous substances that     
require remedy at a mortgaged property. CERCLA imposes liability for such costs 
on any and all 'responsible parties', including the current owner or operator of
a contaminated property, regardless of whether or not the environmental damage  
was caused by a prior owner. However, CERCLA excludes from the definition of    
'owner or operator' a secured creditor who holds indicia of ownership primarily 
to protect its security interest, but does not 'participate in the management'  
of a mortgaged property. The conduct which constitutes 'participation in the    
management', such that the lender would lose the protection of the exclusion for
secured creditors, has been a matter of judicial interpretation of the statutory
language, and court decisions have historically been inconsistent. In 1990, the 
United States Court of Appeals for the Eleventh Circuit suggested, in United    
States v. Fleet Factors Corp., that the mere capacity of the lender to influence
a borrower's decisions regarding disposal of hazardous substances was sufficient
participation in the management of the borrower's business to deny the          
protection of the secured creditor exclusion to the lender, regardless of       
whether the lender actually exercised such influence. Other judicial decisions  
did not interpret the secured creditor exclusion as narrowly as did the Fleet   
Factors decision.                                                               

  This ambiguity appears to have been resolved by the enactment of the Asset
Conservation, Lender Liability and Deposit Insurance Protection Act of 1996 (the
'Asset Conservation Act'), which took effect on September 30, 1996. The Asset   
Conservation Act provides that in order to be deemed to have participated in the
management of a mortgaged property, a lender must actually participate in the   
operational affairs of the property or of the borrower. The Asset Conservation  
Act also provides that participation in the management of the property does not 
include 'merely having the capacity to influence, or unexercised right to       
control' operations. Rather, a lender will lose the protection of the secured   
creditor exclusion only if it exercises decision making control over the        
borrower's environmental compliance and hazardous substance handling and        
disposal practices, or assumes day-to-day management of all operational         
functions of the mortgaged property. It should also be noted, however, that     
liability for costs associated with the investigation and clean-up of           
environmental contamination may also be governed by state law, which may not    
provide any specific protections to lenders, or, alternatively, may not impose  
liability on lenders at all.                                                    

CERCLA does not apply to petroleum products, and the secured creditor   
exclusion, therefore, does not apply to liability for clean-up costs associated 
with releases of petroleum contamination. Federal regulation of underground     
petroleum storage tanks (other than heating oil tanks) is governed by Subtitle I
of the federal Resource Conservation and Recovery Act ('RCRA'). The United      
States Environmental Protection Agency ('EPA') has promulgated a lender         
liability rule for underground storage tanks regulated by Subtitle I of RCRA.   
Under the EPA rule, a holder of a security interest in an underground storage   
tank, or real property containing an underground storage tank, is not considered
an operator of the underground storage tank as long as petroleum is not added   
to, stored in or dispensed from the tank by the holder of the security interest.
Moreover, amendments to RCRA, enacted in 1996, concurrently with the CERCLA     
amendments discussed in the previous paragraph, extend to the holders of        
security interests in petroleum underground storage tanks the same protections  
accorded to secured creditors under CERCLA. Again, it should be noted, however, 
that liability for clean-up of petroleum contamination may be governed by state 
law, which may not provide any specific protection for lenders or,              
alternatively, may not impose liability on lenders at all.                      

 Except as otherwise specified in the applicable Prospectus Supplement, at
the time the Mortgage Loans were originated, no environmental assessment or a   
very limited environment assessment of the Mortgaged Properties will have been  
conducted.                                                                      

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ERISA CONSIDERATIONS

    Sections 404 and 406 of the Employee Retirement Income Security Act of 1974,
as amended ('ERISA'), impose fiduciary and prohibited transaction restrictions  
on employee pension and welfare benefit plans subject to ERISA ('ERISA Plans')  
and on certain other retirement plans and arrangements, including individual    
retirement accounts and annuities, Keogh plans, bank collective investment funds
and insurance company general and separate accounts in which such ERISA Plans   
are invested. Section 4975 of the Code imposes essentially the same prohibited  
transaction restrictions on tax-qualified retirement plans described in Section 
401(a) of the Code and on individual retirement accounts described in Section   
408 of the Code (collectively, 'Tax-Favored Plans').                            

 Certain employee benefit plans, such as governmental plans (as defined in
Section 3(32) of ERISA) and, if no election has been made under Section 410(d)  
of the Code, church plans (as defined in Section 3(33) of ERISA), are not       
subject to ERISA or Section 4975 of the Code. Accordingly, assets of such plans 
may be invested in Certificates without regard to the ERISA considerations      
described below, subject to the provisions of applicable federal and state law. 
However, any such plan that is a tax-qualified plan and exempt from taxation    
under Sections 401(a) and 501(a) of the Code is subject to the prohibited       
transaction restrictions imposed under Section 503 of the Code.                 

In addition to imposing general fiduciary standards, including those of 
investment prudence and diversification and the requirement that a Plan's       
investment be made in accordance with the documents governing the Plan, Section 
406 of ERISA and Section 4975 of the Code prohibit a broad range of transactions
involving 'plan assets' of ERISA Plans and Tax-Favored Plans (collectively,     
'Plans') and persons ('parties in interest' under ERISA or 'disqualified        
persons' under the Code (collectively, 'Parties in Interest')) who have certain 
specified relationships to the Plans, unless a statutory, regulatory or         
administrative exemption is available. Certain Parties in Interest that         
participate in a prohibited transaction may be subject to penalties and/or      
excise taxes imposed under ERISA and/or Section 4975 of the Code, unless a      
statutory, regulatory or administrative exemption is available with respect to  
any such transaction.                                                           

PLAN ASSET REGULATION                                                           

An investment of Plan Assets in Certificates may cause the underlying   
Mortgage Loans, Cooperative Loans, Agency Securities, Private Securities, and/or
other assets held in a Trust Fund to be deemed 'plan assets' of such Plan. The  
U.S. Department of Labor (the 'DOL') has issued a regulation (the 'DOL          
Regulation') concerning whether or not the assets of a Plan would be deemed to  
include an interest in the underlying assets of an entity (such as a Trust      
Fund), for purposes of applying the general fiduciary standards of ERISA and the
prohibited transaction provisions of ERISA and Section 4975 of the Code, when a 
Plan acquires an equity interest (such as a Certificate) in such entity. Because
of the factual nature of certain rules in the DOL Regulation, it cannot be      
predicted whether the assets of a Plan will be deemed to include either (i) an  
interest in the assets of a entity in which the Plan holds an equity interest   
(such as a Trust Fund), or (ii) merely the Plan's interest in the instrument    
evidencing such interest (such as a Certificate). Therefore, neither Plans nor  
certain entities in which assets of Plans are invested should acquire or hold   
Certificates in reliance upon the availability of any exception under the DOL   
Regulation. For purposes of this section, the terms 'plan assets' and 'assets of
a Plan' ('Plan Assets') have the meanings specified in the DOL Regulation and   
include an undivided interest in the underlying assets of certain entities in   
which a Plan holds an equity interest.                                          

   Under the DOL Regulations, the prohibited transaction provisions of Section
406 of ERISA and Section 4975 of the Code may apply to a Trust Fund and cause   
the Company, the Master Servicer, any other Servicer, the Trustee, the obligor  
under any credit enhancement mechanism and certain of their affiliates to be    
considered or become Parties in Interest with respect to a Plan investing in the
Certificates, whether directly or through an entity holding Plan Assets. In such
circumstances, the acquisition or holding of Certificates by or with Plan Assets
of the investing Plan could also give rise to a prohibited transaction under    
ERISA and/or Section 4975 of the Code, unless a statutory, regulatory or        
administrative exemption is available. Under the DOL Regulation, the assets of a
Plan which holds a Certificate would include such Certificate and may also be   
deemed to include the Mortgage Loans and/or other assets held in the related    
Trust Fund. Special caution should be exercised before Plan Assets are used to  
acquire a Certificate in such circumstances, especially if, with respect to such
Plan Assets, the Company, the Master Servicer, any other Servicer, the Trustee, 
the obligor under any credit enhancement mechanism or any of                    

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their affiliates has either (i) investment discretion with respect to such Plan 
Assets, or (ii) authority or responsibility to give (or regularly gives)        
investment advice with respect to such Plan Assets for a fee pursuant to an     
agreement or understanding that such advice will serve as a primary basis for   
investment decisions with respect to such Plan Assets.                          

  Any person who has discretionary authority or control as to the management
or disposition of Plan Assets, or who provides investment advice with respect to
Plan Assets for a fee (in the manner described above), is a fiduciary with      
respect to such Plan Assets. If the Mortgage Loans and/or other assets held in a
Trust Fund were to constitute Plan Assets, any party exercising management or   
discretionary control with respect to such assets may be deemed to be a         
'fiduciary' with respect to any investing Plan and subject to the fiduciary     
requirements of ERISA and the prohibited transaction provisions of ERISA and    
Section 4975 of the Code. In addition, if the Mortgage Loans and/or other assets
held in a Trust Fund constitute Plan Assets, the acquisition or holding of      
Certificates by, on behalf of or with Plan Assets of a Plan, and the operation  
of such Trust Fund, may be deemed to constitute or result in a prohibited       
transaction under ERISA and Section 4975 of the Code.                           

UNDERWRITER'S EXEMPTION                                                         

 The DOL has issued essentially identical individual exemptions to various
underwriters (collectively, as amended by Prohibited Transaction Exemption      
('PTE') 97-34, 62 Fed. Reg. 39021 (July 21, 1997), and PTE 2000-58, 65 Fed. Reg.
67765 (November 13, 2000), the 'Underwriter's Exemption'), which generally      
exempt from the application of the prohibited transaction provisions of ERISA   
and Section 4975 of the Code certain transactions, among others, relating to (i)
the servicing and operation of pools of certain secured obligations (such as    
Mortgage Loans) that are held in an entity, including a trust, and (ii) the     
purchase, sale and holding of securities, including pass-through certificates,  
issued by such entity as to which an underwriter (or its affiliate) which has   
received an Underwriter's Exemption is the sole underwriter or manager or       
co-manager of the underwriting syndicate or a placement agent, provided that    
certain conditions set forth in the Underwriter's Exemption are satisfied. For  
purposes of this section, the term 'Underwriter' includes both such an          
underwriter (or affiliate) and any member of the underwriting syndicate or      
selling group with respect to the Class of Certificates as to which such        
underwriter (or affiliate) is the manager or a co-manager.                      

Each Underwriter's Exemption sets forth the following eight general     
conditions, which must be satisfied in order for a transaction involving the    
purchase, sale and holding of Certificates to be eligible for exemptive relief  
under the Underwriter's Exemption:                                              

    First, the acquisition of Certificates by a Plan or with Plan Assets
    must be on terms that are at least as favorable to the Plan as they would be
in an arm's-length transaction with an unrelated party.                 

   Second, the Underwriter's Exemption only applies to Certificates or
  other securities evidencing rights and interests that are not subordinated
to the rights and interests evidenced by the Certificates or other      
securities issued by the same trust or other entity, unless none of the 
Mortgage Loans or other assets has a loan-to-value ratio or converted   
loan-to-value ratio that exceeds 100% at the date of issuance of the    
Certificates or other securities.                                       

     Third, the Certificates, at the time of acquisition by a Plan or with
Plan Assets, must be rated in one of the four highest generic rating    
    categories by Standard & Poor's Ratings Services, Moody's Investors Service,
Inc. or Fitch Inc. (collectively, the 'Exemption Rating Agencies'). The 
  Certificates must be rated in one of the two highest generic categories by
   at least one of the Exemption Rating Agencies if the loan-to-value ratio or
converted loan-to-value ratio of any one- to four-family residential    
    Mortgage Loan held in the Trust exceeds 100% but does not exceed 125% at the
date of issuance of the Certificates. However, in that case the         
Underwriter's Exemption will not apply (i) to any of the Certificates if
   (x) any Mortgage Loan or other asset held in the Trust (other than a one-to
four-family residential Mortgage Loan) has a loan-to-value ratio or     
  converted loan-to-value ratio that exceeds 100% at the date of issuance of
 the Certificates or (y) any one- to four-family residential Mortgage Loan
    has a loan-to-value ratio or converted loan-to-value ratio that exceeds 125%
at the date of issuance of the Certificates or (ii) to any Subordinated 
Certificates.                                                           

       Fourth, the Trustee must not be an affiliate of any other member of the
'Restricted Group', which consists of any Underwriter, the Company, the 
Master Servicer, any other Servicer, the Trustee, the swap counterparty 
under any swap arrangement and any mortgagor with respect to assets of a

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   Trust Fund constituting more than 5% of the aggregate unamortized principal
balance of the assets held in the Trust Fund as of the date of initial  
issuance of the Certificates.                                           

       Fifth, the sum of all payments made to and retained by the Underwriters
 must represent not more than reasonable compensation for underwriting the
 Certificates; the sum of all payments made to and retained by the Company
 pursuant to the assignment of the assets to the Trust Fund must represent
   not more than the fair market value of such obligations; and the sum of all
  payments made to and retained by the Master Servicer or any other Servicer
must represent not more than reasonable compensation for such person's  
services under the related Pooling Agreement and reimbursement of such  
person's reasonable expenses in connection therewith.                   

Sixth, the Plan or other person investing Plan Assets in the    
    Certificates must be an accredited investor (as defined in Rule 501(a)(1) of
Regulation D under the Securities Act of 1933, as amended).             

     Seventh, (i) the Trust Fund must consist solely of assets of the type
that have been included in other investment pools; (ii) securities      
   evidencing interests in such other investment pools must have been rated in
  one of the four highest categories of one of the Exemption Rating Agencies
 for at least one year prior to the acquisition of Certificates by or with
   Plan Assets of a Plan in reliance on the Underwriter's Exemption; and (iii)
securities in such other investment pools must have been purchased by   
   investors (other than Plans) for at least one year prior to any acquisition
of Certificates by or with Plan Assets of a Plan in reliance on the     
Underwriter's Exemption.                                                

   The exemptive relief afforded by the Underwriter's Exemption does not apply
to any securities where the related trust or other entity contains revolving    
credit loans or unsecured loans. In addition, except as otherwise specified in  
the accompanying Prospectus Supplement, the exemptive relief afforded by the    
Underwriter's Exemption may not apply to any securities where the related trust 
or other entity contains certain purchase obligations, a swap or a pre-funding  
arrangement.                                                                    

Any fiduciary or other person who proposes to use Plan Assets to acquire
Certificates or other securities in reliance upon the Underwriter's Exemption   
must make its own determination as to whether the general conditions set forth  
above will be satisfied with respect to its acquisition and holding of such     
Certificates or other securities.                                               

   If the general conditions of the Underwriter's Exemption are satisfied, the
Exemption may provide exemptive relief from:                                    

       (a) The restrictions imposed by Sections 406(a) and 407(a) of ERISA and
    Sections 4975(c)(1) through (D) of the Code in connection with the direct or
indirect sale, exchange, transfer or holding, or the direct or indirect 
    acquisition or disposition in the secondary market, of Certificates or other
securities by or with Plan Assets of a Plan, provided that no exemptive 
relief is provided from the restrictions of Sections 406(a)(1)(E) and   
   406(a)(2) of ERISA for the acquisition or holding of a Certificate or other
security by or with Plan Assets of a Plan sponsored by any member of the
Restricted Group (an 'Excluded Plan'), or by any person who has         
    discretionary authority or renders investment advice for a fee (as described
above) with respect to Plan Assets of such Excluded Plan;               

        (b) When certain additional conditions are met, the restrictions imposed
  by Sections 406(b)(1) and (b)(2) of ERISA and Section 4975(c)(1)(E) of the
Code in connection with (i) the direct or indirect sale, exchange or    
transfer of Certificates or other securities in the initial issuance of 
    Certificates or other securities between the Company or an Underwriter and a
  Plan when the person who has discretionary authority or renders investment
   advice for a fee (as described above) with respect to the investment of the
   relevant Plan Assets in the Certificates or other securities is a mortgagor
    with respect to 5% or less of the fair market value of the assets of a Trust
Fund (or its affiliate), (ii) the direct or indirect acquisition or     
  disposition in the secondary market of Certificates or other securities by
or with Plan Assets of a Plan, and (iii) the holding of Certificates or 
other securities by or with Plan Assets of a Plan; and                  

    (c) The restrictions imposed by Sections 406 and 407(a) of ERISA and
   Section 4975(c) of the Code for certain transactions in connection with the
servicing, management and operation of the Mortgage Pools, subject to   
  certain specific conditions which the Company expects will be satisfied if
the general conditions of the Underwriter's Exemption are satisfied.    

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The Underwriter's Exemption also may provide exemptive relief from the  
restrictions imposed by Sections 406(a) and 407(a) of ERISA and Sections        
4975(c)(1)(A) through (D) of the Code if such restrictions would otherwise be   
deemed to apply merely because a person is deemed to be a Party in Interest with
respect to a Plan investing in the Certificates or other securities (whether    
directly or through an entity holding Plan Assets) by virtue of providing       
services to the Plan (or such Plan Assets), or by virtue of having certain      
specified relationships to such a person, solely as a result of the Plan's      
ownership of Certificates or other securities.                                  

Before purchasing a Certificate or other security, a fiduciary or other 
investor of Plan Assets should itself confirm that (i) the Certificates or other
securities constitute 'securities' for purposes of the Underwriter's Exemption, 
and (ii) the specific and general conditions and other requirements set forth in
the Underwriter's Exemption would be satisfied. In addition to making its own   
determination as to the availability of the exemptive relief provided in the    
Underwriter's Exemption, the fiduciary or other Plan Asset investor should      
consider its general fiduciary obligations under ERISA in determining whether to
purchase any Certificates or other securities with Plan Assets.                 

OTHER EXEMPTIONS                                                                

Any fiduciary or other person who proposes to use Plan Assets to acquire
Certificates or other securities should consult with its legal counsel with     
respect to the potential applicability of ERISA and the Code to such investment 
and the availability of exemptive relief under the Underwriter's Exemption or   
any other prohibited transaction exemption in connection therewith. In          
particular, in connection with an acquisition of Certificates or other          
securities representing a beneficial ownership interest in a pool of            
single-family residential first or second Mortgage Loans or Agency Securities,  
such fiduciary or other Plan Asset investor should also consider the            
availability of exemptive relief under Prohibited Transaction Class Exemption   
('PTCE') 83-1 for certain transactions involving mortgage pool investment       
trusts. However, PTCE 83-1 does not provide exemptive relief with respect to    
Certificates or other securities evidencing an interest in a Trust Fund which   
includes Cooperative Loans, Private Securities, mortgage loans secured by third 
or more junior liens, contracts, multifamily or mixed-use mortgage loans, or    
certain other assets, or which contain a swap or a pre-funding arrangement. In  
addition, such fiduciary or other Plan Asset investor should consider the       
availability of other class exemptions granted by the DOL, which provide relief 
from certain of the prohibited transaction provisions of ERISA and Section 4975 
of the Code, including Sections I and III of PTCE 95-60, regarding transactions 
by insurance company general accounts. The applicable Prospectus Supplement may 
contain additional information regarding the application of the Underwriter's   
Exemption, PTCE 83-1, PTCE 95-60 or other DOL class exemptions with respect to  
the Certificates or other securities offered thereby. There can be no assurance 
that any of these exemptions will apply with respect to any particular Plan's or
other Plan Asset investor's investment in the Certificates or other securities  
or, even if an exemption were applicable, that such exemption would apply to all
prohibited transactions that may occur in connection with such an investment.   

INSURANCE COMPANY GENERAL ACCOUNTS                                              

  Insurance companies contemplating the investment of general account assets
in the Certificates should consult with their legal advisors with respect to the
applicability of Section 401(c) of ERISA. The DOL issued final regulations under
Section 401(c) which were published in the Federal Register on January 5, 2000, 
but these final regulations are generally not applicable until July 5, 2001.    

REPRESENTATIONS FROM INVESTING PLANS                                            

   If the criteria specified in the Underwriter's Exemption as described above
are not satisfied by one or more Classes of Certificates or other securities, or
by a trust or the Mortgage Loans and other assets held by the Trust, except as  
otherwise specified in the accompanying Prospectus Supplement, transfers of     
those securities to a Plan, to a trustee or other person acting on behalf of any
Plan, or to any other person using Plan Assets to effect the acquisition, will  
not be registered by the Trustee unless the transferee provides the Company and 
the Trustee with an opinion of counsel satisfactory to the Company and the      
Trustee, which opinion will not be at the expense of the Company, the Trustee or
the Master Servicer, that the acquisition of such Certificates or other         
securities by or on behalf of such Plan or with Plan Assets is permissible under
applicable law, will not constitute or result in any non-exempt prohibited      
transaction under ERISA or Section 4075 of the Code, and will not subject the   
Company, the Trustee or                                                         

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the Master Servicer to any obligation in addition to those undertaken in the    
Pooling Agreement. Except as otherwise specified in the accompanying Prospectus 
Supplement, each beneficial owner of a Subordinated Certificate offered by this 
Prospectus and the accompanying Prospectus Supplement (or any interest therein) 
shall be deemed to have represented, by virtue of its acquisition or holding of 
such Certificate (or interest therein), that either (i) it is not a Plan, a     
trustee or other person acting on behalf of any Plan, or any other person using 
Plan Assets to effect such acquisition or holding, (ii) it has acquired and is  
holding such Subordinated Certificate in reliance on the Underwriter's Exemption
and the Subordinated Certificate was rated, at the time of acquisition, in one  
of the four highest generic rating categories by at least one of the Exemption  
Rating Agencies or (iii)(1) such acquirer or holder is an insurance company,    
(2) the source of funds used to acquire or hold such security (or interest      
therein) is an 'insurance company general account' (as defined in PTCE 95-60),  
and (3) the conditions set forth in Sections I and II of PTCE 95-60 have been   
satisfied.                                                                      

If any Subordinated Certificate (or any interest therein) is acquired or
held in violation of the conditions described in the preceding paragraph, the   
next preceding permitted beneficial owner will be treated as the beneficial     
owner of the Subordinated Certificate, retroactive to the date of transfer to   
the purported beneficial owner. Any purported beneficial owner whose acquisition
or holding of any Subordinated Certificate (or interest therein) was effected in
violation of the conditions described in the preceding paragraph shall indemnify
and hold harmless the Company, the Trustee, the Master Servicer, any            
subservicer, the underwriter and the Trust from and against any and all         
liabilities, claims, costs or expenses incurred by such parties as a result of  
such acquisition or holding.                                                    

TAX-EXEMPT PLAN INVESTORS                                                       

   A Plan which is exempt from federal income taxation pursuant to Section 501
of the Code generally will be subject to federal income taxation to the extent  
that its income constitutes unrelated business taxable income (or 'UBTI') within
the meaning of Section 512 of the Code. Excess inclusions of a REMIC allocated  
to a REMIC Residual Certificate held by such a Plan will be considered UBTI and 
thus will be subject to federal income tax. See 'Certain Federal Income Tax     
Consequences -- Taxation of Owners of REMIC Residual Certificates -- Excess     
Inclusions' and ' -- Tax-Exempt Investors'. In addition, the exemptive relief   
afforded by the Underwriter's Exemption does not apply to the purchase, sale or 
holding of any class of REMIC Residual Certificates.                            

CONSULTATION WITH COUNSEL                                                       

There can be no assurance that the Underwriter's Exemption or any other 
exemption granted by the DOL will apply with respect to any particular Plan that
acquires Certificates (whether directly or through an entity holding Plan       
Assets) or, even if all of the conditions specified in the Underwriter's        
Exemption were satisfied, that exemptive relief would be available for all      
transactions involving a Trust Fund. Prospective Plan Asset investors should    
consult with their legal counsel concerning the impact of ERISA and the Code and
the potential consequences in their specific circumstances prior to making an   
investment in Certificates.                                                     

  Any fiduciary or other person who proposes to acquire or hold Certificates
on behalf of a Plan or with Plan Assets should consult with its legal counsel   
with respect to the potential applicability of the fiduciary responsibility     
provisions of ERISA and the prohibited transaction provisions of ERISA and      
Section 4975 of the Code to the proposed investment and the availability of     
exemptive relief under the Underwriter's Exemption, PTCE 83-1, Sections I and   
III of PTCE 95-60, and/or any other class exemption granted by the DOL. In      
addition to making its own determination as to the availability of the exemptive
relief provided in the Underwriter's Exemption or any other DOL exemption, any  
fiduciary of an ERISA-subject Plan should consider its general fiduciary        
obligations under ERISA in determining whether to purchase Certificates on      
behalf of such Plan.                                                            

Any fiduciary or other person who proposes to use Plan Assets to acquire
Certificates should consult with its own legal counsel with respect to the      
potential consequences under ERISA and the Code of the acquisition and ownership
of Certificates.                                                                

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES 

 The following is a general discussion of the anticipated material federal
income tax consequences of the purchase, ownership and disposition of the       
Certificates offered hereunder. It does not purport to discuss all federal      
income tax consequences that may be applicable to particular categories of      
investors, some of which may be subject to special rules and does not address   
the tax consequences of persons holding Certificates as part of a hedge or      
hedging transaction. Further, the authorities on which this discussion is based 
are subject to change or differing interpretations, which changes or differing  
interpretations could apply retroactively. This discussion does not address the 
state or local tax consequences of the purchase, ownership and disposition of   
such Certificates. Investors should consult their own tax advisors in           
determining the federal, state, local or other tax consequences to them of the  
purchase, ownership and disposition of the Certificates offered hereunder.      

The following discussion addresses certificates ('REMIC Certificates')  
representing interests in a Mortgage Pool ('REMIC Mortgage Pool') as to which   
the Company, in the case where the Company will be a Master Servicer for a      
Series or in the case where there will be no Master Servicer for a Series, or   
the Servicing Entity, in the case where the Servicing Entity is the only Master 
Servicer for a Series, will cause to elect treatment as a real estate mortgage  
investment conduit ('REMIC') under Sections 860A through 860G ('REMIC           
Provisions') of the Code. Under the REMIC Provisions, REMICs may issue 'regular'
interests and must issue one and only one class of 'residual' interests. A REMIC
Certificate representing a regular interest in a REMIC Mortgage Pool will be    
referred to as a 'REMIC Regular Certificate' and a REMIC Certificate            
representing a residual interest in a REMIC Mortgage Pool will be referred to as
a 'REMIC Residual Certificate'.                                                 

   The following discussion is based in part upon the rules governing original
issue discount that are set forth in Code Sections 1271 through 1273 and 1275   
and in Treasury regulations issued under the original issue discount provisions 
of the Code (the 'OID Regulations'), and the Treasury regulations issued under  
the provisions of the Code relating to REMICs (the 'REMIC Regulations'). The OID
Regulations generally are effective with respect to debt instruments issued on  
or after April 4, 1994.                                                         

CLASSIFICATION OF REMIC TRUST FUNDS                                             

With respect to each Series of REMIC Certificates, Orrick, Herrington & 
Sutcliffe LLP, special counsel to the Company, will deliver their opinion       
generally to the effect that, assuming (i) a REMIC election is made timely in   
the required form, (ii) each Master Servicer or Servicing Entity, as applicable,
complies with all provisions of the related Pooling Agreement, (iii) certain    
representations set forth in the Pooling Agreement are true, and (iv) there is  
continued compliance with applicable provisions of the Code, as it may be       
amended from time to time, and applicable Treasury regulations issued           
thereunder, the related REMIC Mortgage Pool will qualify as a REMIC and the     
classes of interests offered will be considered to be regular interests or      
residual interests in that REMIC Mortgage Pool within the meaning of the REMIC  
Provisions.                                                                     

    Holders of REMIC Certificates should be aware that, if an entity electing to
be treated as a REMIC fails to comply with one or more of the ongoing           
requirements of the Code for REMIC status during any taxable year, the Code     
provides that the entity will not be treated as a REMIC for such year and       
thereafter. In such event, an entity electing to be treated as a REMIC may be   
taxable as a separate corporation under Treasury regulations, and the related   
REMIC Certificates may not be accorded the status described below under the     
heading 'Characterization of Investments in REMIC Certificates'. In the case of 
an inadvertent termination of REMIC status, the Code provides the Treasury      
Department with authority to issue regulations providing relief. Any such       
relief, however, may be accompanied by sanctions, such as the imposition of a   
corporate tax on all or a portion of the REMIC's income for the period of time  
in which the requirements for REMIC status are not satisfied.                   

CHARACTERIZATION OF INVESTMENTS IN REMIC CERTIFICATES                           

In general, REMIC Certificates are not treated for federal income tax   
purposes as ownership interests in the assets of a REMIC Mortgage Pool. However,
(i) REMIC Certificates held by a domestic building and loan association will    
constitute a 'regular or residual interest in a REMIC' within the meaning of    

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Code Section 7701(a)(19)(C)(xi) in the same proportion that the Assets would be 
treated as 'loans . . . secured by an interest in real property' within the     
meaning of Code Section 7701(a)(19)(C)(v) or as other assets described in Code  
Section 7701(a)(19)(C); and (ii) REMIC Certificates held by a real estate       
investment trust will constitute 'real estate assets' within the meaning of Code
Section 856(c)(4)(A), and interest on the REMIC Certificates will be considered 
'interest on obligations secured by mortgages on real property or on interests  
in real property' within the meaning of Code Section 856(c)(3)(B) in the same   
proportion that, respectively, the Assets would be treated as 'interests in real
property' as defined in Code Section 856(c)(5)(C) (or, as provided in the       
Committee Report, as 'real estate assets' as defined in Code Section            
856(c)(5)(B)) or as income from the Assets would be treated as 'interest on     
obligations secured by mortgages on real property or on interests in real       
property.' Moreover, if 95% or more of the Assets qualify for any of the        
foregoing treatments, the REMIC Certificates will qualify for the corresponding 
status in their entirety. Investors should be aware that the investment of      
amounts in any reserve account in assets not so qualifying would, and holding   
property acquired by foreclosure pending sale might, reduce the amount of the   
REMIC Certificate that would qualify for the foregoing treatment. The REMIC     
Regulations provide that payments on Mortgage Loans held pending distribution   
are considered part of the Mortgage Loans for purposes of Code Section          
856(c)(4)(A); it is unclear whether such collected payments would be so treated 
for purposes of Code Section 7701(a)(19)(c)(v), but there appears to be no      
reason why analogous treatment should not be given to such collected payments   
under that provision. The determination as to the percentage of the REMIC's     
assets that will constitute assets described in the foregoing sections of the   
Code will be made with respect to each calendar quarter based on the average    
adjusted basis of each category of the assets held by the REMIC during such     
calendar quarter. The REMIC will report those determinations to                 
Certificateholders in the manner and at the times required by applicable        
Treasury regulations. The applicable Prospectus Supplement or the related       
Current Report on Form 8-K for each Series of REMIC Certificates will describe  
the Assets as of the Cut-Off Date. REMIC Certificates held by certain financial 
institutions will constitute 'evidence of indebtedness' within the meaning of   
Code Section 582(c)(1); in addition, REMIC Regular Certificates acquired by a   
REMIC in accordance with the requirements of Section 860G(a)(3)(C) or Section   
860G(a)(4)(B) of the Code will be treated as 'qualified mortgages' for purposes 
of Code Section 860D(a)(4).                                                     

TAXATION OF OWNERS OF REMIC REGULAR CERTIFICATES                                

Except as otherwise stated in this discussion, the REMIC Regular        
Certificates will be treated for federal income tax purposes as debt instruments
issued by the REMIC Mortgage Pool and not as ownership interests in the REMIC   
Mortgage Pool or its Assets. In general, interest, original issue discount and  
market discount paid or accrued on a REMIC Regular Certificate will be treated  
as ordinary income to the holder of such REMIC Regular Certificate.             
Distributions in reduction of the stated redemption price at maturity of the    
REMIC Regular Certificate will be treated as a return of capital to the extent  
of such holder's basis in such REMIC Regular Certificate. Holders of REMIC      
Regular Certificates that otherwise report income under a cash method of        
accounting will be required to report income with respect to REMIC Regular      
Certificates under an accrual method.                                           

1. Original Issue Discount                                                      

Certain REMIC Regular Certificates may be issued with 'original issue   
discount' within the meaning of Code Section 1273(a). Any holders of REMIC      
Regular Certificates issued with original issue discount generally will be      
required to include original issue discount in income as it accrues, in         
accordance with a constant interest method that takes into account the          
compounding of interest, in advance of the receipt of the cash attributable to  
such income. The Company will report annually (or more often if required) to the
Internal Revenue Service ('IRS') and to Certificateholders such information with
respect to the original issue discount accruing on the REMIC Regular            
Certificates as may be required under Code Section 6049 and the regulations     
thereunder. See ' -- Reporting and Other Administrative Matters of REMICS'      
below.                                                                          

   Rules governing original issue discount are set forth in Code Sections 1271
through 1273 and 1275 and, to some extent, in the OID Regulations. Code Section 
1272(a)(6) provides special original issue discount rules applicable to REMIC   
Regular Certificates. Regulations have not yet been proposed or adopted under   
Section 1272(a)(6) of the Code. Further, application of the OID Regulations to  
the REMIC                                                                       

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Regular Certificates remains unclear in some respects because the OID           
Regulations generally purport not to apply to instruments to which Section      
1272(a)(6) applies such as REMIC Regular Certificates, and separately because   
they either do not address, or are subject to varying interpretations with      
regard to, several relevant issues.                                             

Code Section 1272(a)(6) requires that a mortgage prepayment assumption  
('Prepayment Assumption') be used in computing the accrual of original issue    
discount on REMIC Regular Certificates and for certain other federal income tax 
purposes. The Prepayment Assumption is to be determined in the manner prescribed
in Treasury regulations. To date, no such regulations have been promulgated. The
Committee Report indicates that the regulations will provide that the Prepayment
Assumption, if any, used with respect to a particular transaction must be the   
same as that used by the parties in pricing the transaction. Unless otherwise   
specified in the applicable Prospectus Supplement, the Company will use a       
percentage of the Basic Prepayment Assumption (or such other Prepayment         
Assumption as may be specified in the applicable Prospectus Supplement) in      
reporting original issue discount that is consistent with this standard.        
However, the Company does not make any representation that the Mortgage Loans   
will in fact prepay at that percentage of the Basic Prepayment Assumption or at 
any other rate. Each investor must make its own decision as to the appropriate  
prepayment assumption to be used in deciding whether or not to purchase any of  
the REMIC Regular Certificates. The Prospectus Supplement with respect to a     
Series of REMIC Certificates will disclose the percentage of the Basic          
Prepayment Assumption (or such other Prepayment Assumption as may be specified  
therein) to be used in reporting original issue discount, if any, and for       
certain other federal income tax purposes.                                      

  The total amount of original issue discount on a REMIC Regular Certificate
is the excess of the 'stated redemption price at maturity' of the REMIC Regular 
Certificate over its 'issue price'. Except as discussed in the following two    
paragraphs, in general, the issue price of a particular Class of REMIC Regular  
Certificates offered hereunder will be the price at which a substantial amount  
of REMIC Regular Certificates of that Class are first sold to the public        
(excluding bond houses and brokers).                                            

    If a REMIC Regular Certificate is sold with accrued interest that relates to
a period prior to the issue date of such REMIC Regular Certificate, the amount  
paid for the accrued interest will be treated instead as increasing the issue   
price of the REMIC Regular Certificate. In addition, that portion of the first  
interest payment in excess of interest accrued from the Closing Date to the     
first Distribution Date will be treated for federal income tax reporting        
purposes as includible in the stated redemption price at maturity of the REMIC  
Regular Certificate, and as excludible from income when received as a payment of
interest on the first Distribution Date. The OID Regulations suggest that some  
or all of this pre-issuance accrued interest 'may' be treated as a separate     
asset (and hence not includible in a REMIC Regular Certificate's issue price or 
stated redemption price at maturity), whose cost is recovered entirely out of   
interest paid on the first Distribution Date. It is unclear how such treatment  
would be elected under the OID Regulations and whether an election could be made
unilaterally by a Certificateholder.                                            

 The stated redemption price at maturity of a REMIC Regular Certificate is
equal to the total of all payments to be made on such Certificate other than    
'qualified stated interest'. Under the OID Regulations, 'qualified stated       
interest' is interest that is unconditionally payable at least annually during  
the entire term of the Certificate at either (i) a single fixed rate that       
appropriately takes into account the length of the interval between payments or 
(ii) the current values of a single 'qualified floating rate' or 'objective     
rate' (each, a 'Single Variable Rate'). A 'current value' is the value of a     
variable rate on any day that is no earlier than three months prior to the first
day on which that value is in effect and no later than one year following that  
day. A 'qualified floating rate' is a rate whose variations can reasonably be   
expected to measure contemporaneous variations in the cost of newly borrowed    
funds in the currency in which the Certificate is denominated. Such a rate      
remains qualified even though it is multiplied by a fixed, positive multiple not
exceeding 1.35, increased or decreased by a fixed rate, or both. Certain        
combinations of rates constitute a single qualified floating rate, including (i)
interest stated at a fixed rate for an initial period of less than one year     
followed by a qualified floating rate if the value of the floating rate at the  
closing date is intended to approximate the fixed rate, and (ii) two or more    
qualified floating rates that can be expected to have approximately the same    
values throughout the term of the Certificate. A combination of such rates is   
conclusively presumed to be a single floating rate if the values of all rates on
the closing date are within 0.25% of each other. A variable rate that is subject
to an interest rate cap,                                                        

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floor, 'governor' or similar restriction on rate adjustment may be a qualified  
floating rate only if such restriction is fixed throughout the term of the      
instrument, or is not reasonably expected as of the closing date to cause the   
yield on the debt instrument to differ significantly from the expected yield    
absent the restriction. An 'objective rate' is a rate (other than a qualified   
floating rate) determined using a single formula fixed for the life of the      
Certificate, which is based on (i) one or more qualified floating rates         
(including a multiple or inverse of a qualified floating rate), (ii) one or more
rates each of which would be a qualified floating rate for a debt instrument    
denominated in a foreign currency, (iii) the yield or changes in price of one or
more items of 'actively traded' personal property, (iv) a combination of rates  
described in (i), (ii) and (iii), or (v) a rate designated by the IRS. However, 
a variable rate is not an objective rate if it is reasonably expected that the  
average value of the rate during the first half of the Certificate's term will  
differ significantly from the average value of such rate during the final half  
of its term. A combination of interest stated at a fixed rate for an initial    
period of less than one year followed by an objective rate is treated as a      
single objective rate if the value of the objective rate at the closing date is 
intended to approximate the fixed rate; such a combination of rates is          
conclusively presumed to be a single objective rate if the objective rate on the
closing date does not differ from the fixed rate by more than 0.25%. The        
qualified stated interest payable with respect to certain variable rate debt    
instruments not bearing stated interest at a Single Variable Rate generally is  
determined under the OID Regulations by converting such instruments into fixed  
rate debt instruments. Instruments qualifying for such treatment generally      
include those providing for stated interest at (i) more than one qualified      
floating rates, or at (ii) a single fixed rate and (a) one or more qualified    
floating rates or (b) a single 'qualified inverse floating rate' (each, a       
'Multiple Variable Rate'). A qualified inverse floating rate is an objective    
rate equal to a fixed rate reduced by a qualified floating rate, the variations 
in which can reasonably be expected to inversely reflect contemporaneous        
variations in the cost of newly borrowed funds (disregarding permissible rate   
caps, floors, governors and similar restrictions such as are described above).  
Under these rules, some of the payments of interest on a Certificate bearing a  
fixed rate of interest for an initial period followed by a qualified floating   
rate of interest in subsequent periods could be treated as included in the      
stated redemption price at maturity if the initial fixed rate were to differ    
sufficiently from the rate that would have been set using the formula applicable
to subsequent periods. See ' -- Variable Rate Certificates'. REMIC Regular      
Certificates offered hereby other than Certificates providing for variable rates
of interest or for the accretion of interest are not anticipated to have stated 
interest other than 'qualified stated interest', but if any such REMIC Regular  
Certificates are so offered, appropriate disclosures will be made in the        
Prospectus Supplement. Some or all of the payments on REMIC Regular Certificates
providing for the accretion of interest will be included in the stated          
redemption price at maturity of such Certificates.                              

   Under a de minimis rule in the Code, as interpreted in the OID Regulations,
original issue discount on a REMIC Regular Certificate will be considered to be 
zero if such original issue discount is less than 0.25% of the stated redemption
price at maturity of the REMIC Regular Certificate multiplied by the weighted   
average life of the REMIC Regular Certificate. For this purpose, the weighted   
average life of the REMIC Regular Certificate is computed as the sum of the     
amounts determined by multiplying the amount of each payment under the          
instrument (other than a payment of qualified stated interest) by a fraction,   
whose numerator is the number of complete years from the issue date until such  
payment is made, and whose denominator is the stated redemption price at        
maturity of such REMIC Regular Certificate. The IRS may be anticipated to take  
the position that this rule should be applied taking into account the Prepayment
Assumption and the effect of any anticipated investment income. Under the OID   
Regulations, REMIC Regular Certificates bearing only qualified stated interest  
except for any 'teaser' rate, interest holiday or similar provision would be    
treated as subject to the de minimis rule if the greater of the deferred or     
foregone interest or the other original issue discount is less than such de     
minimis amount.                                                                 

    The OID Regulations generally would treat de minimis original issue discount
as includible in income as each principal payment is made, based on the product 
of the total amount of such de minimis original issue discount and a fraction,  
whose numerator is the amount of such principal payment and whose denominator is
the stated principal amount of the REMIC Regular Certificate. The OID           
Regulations also would permit a Certificateholder to elect to accrue de minimis 
original issue discount into income currently based on a constant yield method. 
See 'Taxation of Owners of REMIC Regular Certificates -- Market Discount and    
Premium'.                                                                       

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   Each holder of a REMIC Regular Certificate must include in gross income the
sum of the 'daily portions' of original issue discount on its REMIC Regular     
Certificate for each day during its taxable year on which it held such REMIC    
Regular Certificate. For this purpose, in the case of an original holder of a   
REMIC Regular Certificate, the daily portions of original issue discount will be
determined as follows. A calculation will first be made of the portion of the   
original issue discount that accrued during each accrual period, that is, unless
otherwise stated in the applicable Prospectus Supplement, each period that      
begins or ends on a date that corresponds to a Distribution Date on the REMIC   
Regular Certificate and begins on the first day following the immediately       
preceding accrual period (beginning on the Closing Date in the case of the first
such period). For any accrual period such portion will equal the excess, if any,
of (i) the sum of (A) the present value of all of the distributions remaining to
be made on the REMIC Regular Certificate, if any, as of the end of the accrual  
period and (B) the distribution made on such REMIC Regular Certificate during   
the accrual period of amounts included in the stated redemption price at        
maturity, over (ii) the adjusted issue price of such REMIC Regular Certificate  
at the beginning of the accrual period. The present value of the remaining      
payments referred to in the preceding sentence will be calculated based on (i)  
the yield to maturity of the REMIC Regular Certificate, calculated as of the    
settlement date, giving effect to the Prepayment Assumption, (ii) events        
(including actual prepayments) that have occurred prior to the end of the       
accrual period, and (iii) the Prepayment Assumption. The adjusted issue price of
a REMIC Regular Certificate at the beginning of any accrual period will equal   
the issue price of such Certificate, increased by the aggregate amount of       
original issue discount with respect to such REMIC Regular Certificate that     
accrued in prior accrual periods, and reduced by the amount of any distributions
made on such REMIC Regular Certificate in prior accrual periods of amounts      
included in the stated redemption price at maturity. The original issue discount
accruing during any accrual period will be allocated ratably to each day during 
the period to determine the daily portion of original issue discount for each   
day. With respect to an accrual period between the settlement date and the first
Distribution Date on the REMIC Regular Certificate (notwithstanding that no     
distribution is scheduled to be made on such date) that is shorter than a full  
accrual period, the OID Regulations permit the daily portions of original issue 
discount to be determined according to any reasonable method.                   

 A subsequent purchaser of a REMIC Regular Certificate that purchases such
REMIC Regular Certificate at a cost (not including payment for accrued qualified
stated interest) less than its remaining stated redemption price at maturity    
will also be required to include in gross income, for each day on which it holds
such REMIC Regular Certificate, the daily portions of original issue discount   
with respect to such REMIC Regular Certificate, but reduced, if such cost       
exceeds the 'adjusted issue price', by an amount equal to the product of (i)    
such daily portions and (ii) a constant fraction, whose numerator is such excess
and whose denominator is the sum of the daily portions of original issue        
discount on such REMIC Regular Certificate for all days on or after the day of  
purchase. The adjusted issue price of a REMIC Regular Certificate on any given  
day is equal to the sum of the adjusted issue price (or, in the case of the     
first accrual period, the issue price) of the REMIC Regular Certificate at the  
beginning of the accrual period during which such day occurs and the daily      
portions of original issue discount for all days during such accrual period     
prior to such day, reduced by the aggregate amount of distributions previously  
made other than distributions of qualified stated interest.                     

    Variable Rate Certificates. Purchasers of REMIC Regular Certificates bearing
a variable rate of interest should be aware that there is uncertainty concerning
the application of Section 1272(a)(6) of the Code and the OID Regulations to    
such Certificates. In the absence of other authority, the Company intends to be 
guided by the provisions of the OID Regulations governing variable rate debt    
instruments in adapting the provisions of Section 1272(a)(6) of the Code to such
Certificates for the purpose of preparing reports furnished to                  
Certificateholders. The effect of the application of such provisions generally  
will be to cause Certificateholders holding Certificates bearing interest at a  
Single Variable Rate to take into account for each period an amount             
corresponding approximately to the sum of (i) the qualified stated interest,    
accruing on the outstanding face amount of the REMIC Regular Certificate as the 
stated interest rate for that Certificate varies from time to time and (ii) the 
amount of original issue discount that would have been attributable to that     
period on the basis of a constant yield to maturity for a bond issued at the    
same time and issue price as the REMIC Regular Certificate, having the same face
amount and schedule of payments of principal as such Certificate, subject to the
same Prepayment Assumption, and bearing interest at a fixed rate equal to the   
value of the applicable qualified floating rate or qualified inverse floating   
rate                                                                            

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in the case of a Certificate providing for either such rate, or equal to the    
fixed rate that reflects the reasonably expected yield on the Certificate in the
case of a Certificate providing for an objective rate other than an inverse     
floating rate, in each case as of the issue date. Certificateholders holding    
REMIC Regular Certificates bearing interest at a Multiple Variable Rate         
generally will take into account interest and original issue discount under a   
similar methodology, except that the amounts of qualified stated interest and   
original issue discount attributable to such a Certificate first will be        
determined for an equivalent fixed rate debt instrument, the assumed fixed rates
for which are (a) for each qualified floating rate, the value of each such rate 
as of the closing date (with appropriate adjustment for any differences in      
intervals between interest adjustment dates), (b) for a qualified inverse       
floating rate, the value of the rate as of the closing date, (c) for any other  
objective rate, the fixed rate that reflects the yield that is reasonably       
expected for the Certificate, and (d) for an actual fixed rate, such            
hypothetical fixed rate as would result under (a) or (b) if the actual fixed    
rate were replaced by a hypothetical qualified floating rate or qualified       
inverse floating rate such that the fair market value of the Certificate as of  
the issue date would be approximately the same as that of an otherwise identical
debt instrument providing for the hypothetical variable rate rather than the    
actual fixed rate. If the interest paid or accrued with respect to a Multiple   
Variable Rate Certificate during an accrual period differs from the assumed     
fixed interest rate, such difference will be an adjustment (to interest or      
original issue discount, as applicable) to the Certificateholder's taxable      
income for the taxable period or periods to which such difference relates.      
Additionally, purchasers of such Certificates should be aware that the          
provisions of the OID Regulations applicable to variable rate debt instruments  
have been limited and may not apply to some REMIC Regular Certificates having   
variable rates. If such a Certificate is not governed by the provisions of the  
OID Regulations applicable to variable rate debt instruments, it may be subject 
to provisions of proposed Treasury Regulations applicable to instruments having 
contingent payments. The application of those provisions to instruments such as 
variable rate REMIC Regular Certificates is subject to differing                
interpretations. Prospective purchasers of variable rate REMIC Regular          
Certificates are advised to consult their tax advisors concerning the tax       
treatment of such Certificates.                                                 

2. Market Discount and Premium                                                  

  A Certificateholder that purchases a REMIC Regular Certificate at a market
discount, that is, at a purchase price less than the adjusted issue price (as   
defined under ' -- Taxation of Owners of REMIC Regular Certificates -- Original 
Issue Discount') of such REMIC Regular Certificate generally will recognize     
market discount upon receipt of each distribution of principal. In particular,  
such a holder will generally be required to allocate each payment of principal  
on a REMIC Regular Certificate first to accrued market discount, and to         
recognize ordinary income to the extent such principal payment does not exceed  
the aggregate amount of accrued market discount on such REMIC Regular           
Certificate not previously included in income. Such market discount must be     
included in income in addition to any original issue discount includible in     
income with respect to such REMIC Regular Certificate.                          

    A Certificateholder may elect to include market discount in income currently
as it accrues, rather than including it on a deferred basis in accordance with  
the foregoing. If made, such election will apply to all market discount bonds   
acquired by such Certificateholder on or after the first day of the first       
taxable year to which such election applies. In addition, the OID Regulations   
permit a Certificateholder to elect to accrue all interest, discount (including 
de minimis market or original issue discount) and premium in income as interest,
based on a constant yield method. If such an election were made for a REMIC     
Regular Certificate with market discount, the Certificateholder would be deemed 
to have made an election to currently include market discount in income with    
respect to all other debt instruments having market discount that such          
Certificateholder acquires during the year of the election or thereafter.       
Similarly, a Certificateholder that makes this election for a Certificate that  
is acquired at a premium is deemed to have made an election to amortize bond    
premium, as described below, with respect to all debt instruments having        
amortizable bond premium that such Certificateholder owns or acquires. The      
election to accrue interest, discount and premium on a constant yield method    
with respect to a Certificate is irrevocable.                                   

 Under a statutory de minimis exception, market discount with respect to a
REMIC Regular Certificate will be considered to be zero for purposes of Code    
Sections 1276 through 1278 if such market discount is less than 0.25% of the    
stated redemption price at maturity of such REMIC Regular Certificate           

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multiplied by the number of complete years to maturity remaining after the date 
of its purchase. In interpreting a similar de minimis rule with respect to      
original issue discount on obligations payable in installments, the OID         
Regulations refer to the weighted average maturity of obligations, and it is    
likely that the same rule will be applied in determining whether market discount
is de minimis. It appears that de minimis market discount on a REMIC Regular    
Certificate would be treated in a manner similar to original issue discount of a
de minimis amount. See 'Taxation of Holders of REMIC Regular                    
Certificates -- Original Issue Discount'. Such treatment would result in        
discount being included in income at a slower rate than discount would be       
required to be included using the method described above. However, Treasury     
regulations implementing the market discount de minimis exception have not been 
issued in proposed or temporary form, and the precise treatment of de minimis   
market discount on obligations payable in more than one installment therefore   
remains uncertain.                                                              

The 1986 Act grants authority to the Treasury Department to issue       
regulations providing for the method for accruing market discount of more than a
de minimis amount on debt instruments, the principal of which is payable in more
than one installment. Until such time as regulations are issued by the Treasury 
Department, certain rules described in the Committee Report will apply. Under   
those rules, the holder of a bond purchased with more than de minimis market    
discount may elect to accrue such market discount either on the basis of a      
constant yield method or on the basis of the appropriate proportionate method   
described below. Under the proportionate method for obligations issued with     
original issue discount, the amount of market discount that accrues during a    
period is equal to the product of (i) the total remaining market discount,      
multiplied by (ii) a fraction, the numerator of which is the original issue     
discount accruing during the period and the denominator of which is the total   
remaining original issue discount at the beginning of the period. Under the     
proportionate method for obligations issued without original issue discount, the
amount of market discount that accrues during a period is equal to the product  
of (i) the total remaining market discount, multiplied by (ii) a fraction, the  
numerator of which is the amount of stated interest paid during the accrual     
period and the denominator of which is the total amount of stated interest      
remaining to be paid at the beginning of the period. The Prepayment Assumption, 
if any, used in calculating the accrual of original issue discount is to be used
in calculating the accrual of market discount under any of the above methods.   
Because the regulations referred to in this paragraph have not been issued, it  
is not possible to predict what effect such regulations might have on the tax   
treatment of a REMIC Regular Certificate purchased at a discount in the         
secondary market.                                                               

 Further, a purchaser generally will be required to treat a portion of any
gain on sale or exchange of a REMIC Regular Certificate as ordinary income to   
the extent of the market discount accrued to the date of disposition under one  
of the foregoing methods, less any accrued market discount previously reported  
as ordinary income. Such purchaser also may be required to defer a portion of   
its interest deductions for the taxable year attributable to any indebtedness   
incurred or continued to purchase or carry such REMIC Regular Certificate. Any  
such deferred interest expense is, in general, allowed as a deduction not later 
than the year in which the related market discount income is recognized. If such
holder elects to include market discount in income currently as it accrues on   
all market discount instruments acquired by such holder in that taxable year or 
thereafter, the interest deferral rule described above will not apply.          

  A REMIC Regular Certificate purchased at a cost (not including payment for
accrued qualified stated interest) greater than its remaining stated redemption 
price at maturity will be considered to be purchased at a premium. The holder of
such a REMIC Regular Certificate may elect to amortize such premium under the   
constant yield method. The OID Regulations also permit Certificateholders to    
elect to include all interest, discount and premium in income based on a        
constant yield method, further treating the Certificateholder as having made the
election to amortize premium generally, as discussed above. The Committee Report
indicates a Congressional intent that the same rules that will apply to accrual 
of market discount on installment obligations will also apply in amortizing bond
premium under Code Section 171 on installment obligations such as the REMIC     
Regular Certificates.                                                           

3. Realized Losses                                                              

    Under Code Section 166, both corporate holders of REMIC Regular Certificates
and noncorporate holders of REMIC Regular Certificates that acquire such        
Certificates in connection with a trade or business should be allowed to deduct,
as ordinary losses, any losses sustained during a taxable year in               

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which their Certificates become wholly or partially worthless as a result of one
or more realized losses on the Mortgage Loans. However, it appears that a       
noncorporate holder that does not acquire a REMIC Regular Certificate in        
connection with a trade or business will not be entitled to deduct a loss under 
Code Section 166 until such holder's Certificate becomes wholly worthless (i.e.,
until its outstanding principal balance has been reduced to zero) and that the  
loss will be characterized as a short-term capital loss.                        

Each holder of a REMIC Regular Certificate will be required to accrue   
interest and original issue discount with respect to such Certificate without   
regard to any reduction in distributions attributable to defaults or            
delinquencies on the Mortgage Loans or the underlying assets until it can be    
established that any such reduction ultimately will not be recoverable. As a    
result, the amount of taxable income reported in any period by the holder of a  
REMIC Regular Certificate could exceed the amount of economic income actually   
realized by the holder in such period. Although the holder of a REMIC Regular   
Certificate eventually will recognize a loss or reduction in income attributable
to previously accrued and included income that, as a result of a realized loss, 
ultimately will not be realized, the law is unclear with respect to the timing  
and character of such loss or reduction in income.                              

4. Callable Class Certificates                                                  

  An entity electing to be treated as a REMIC may either itself directly, or
indirectly through the use of a trust owned by such entity, enter into a        
redemption agreement pursuant to which the counterparty will have the right to  
cause a redemption of the outstanding Certificates (as used herein, each such   
right a 'Call Right', and each such Certificate, a 'Callable Class Certificate')
beginning on the Distribution Date and subject to payment of the redemption     
price and other conditions that may be specified in the applicable Prospectus   
Supplement. See 'Description of the Certificates -- Redemption Agreement.' In   
the event the trust issues the Call Right, counsel to the Depositor will deliver
its opinion generally to the effect that, assuming compliance with all          
provisions of the related Pooling Agreement, the trust will be treated as a     
grantor trust under subpart E, part 1 of Subchapter J of the Code and, as a     
result, the REMIC will be treated as having directly issued the Call Right.     

The REMIC will be treated as (i) owning an interest in the underlying   
Mortgage Loans and (ii) writing a call option on its interest in the underlying 
Mortgage Loans, represented by the right of the holder of the Call Right to     
direct the Depositor to redeem the outstanding Certificates as described under  
'Description of the Certificates -- Redemption Agreement'.                      

  Under these circumstances, the REMIC should be considered to have acquired
its interest in the underlying Mortgage Loans for an amount equal to its initial
aggregate basis in its assets, determined as described more fully hereunder,    
plus the fair market value at the time of purchase of such REMIC's assets of the
call option the REMIC is deemed to have written, which amount the REMIC is      
deemed also to have received. Accordingly, the REMIC's basis in its interest in 
the underlying Mortgage Loans will actually be greater than the aggregate issue 
price of the REMIC Certificates it issues, resulting in less discount income or 
greater premium deductions to the REMIC than it would have recognized had the   
call option not been written. Under current federal income tax law, the REMIC   
will not be required to include immediately in income the amount of the option  
premium it is deemed to have received. However, although the treatment of these 
items is not entirely clear, it appears that as the REMIC receives principal    
payments on the underlying Mortgage Assets, and if the REMIC sells or           
distributes in kind any of the underlying Mortgage Loans, the REMIC will be     
deemed to have received (in addition to the amount of such payment, the sales   
price or the fair market value of the asset, as the case may be) an amount equal
to the corresponding portion of the payment it was deemed to receive at the time
the call option was originally written. Accordingly, the amount realized by the 
REMIC with respect to its interest in the underlying Mortgage Loans, will be    
greater than the amount of cash received by it, and over the life of the REMIC  
the entire amount of the deemed payment received when the call option was       
written will be reported by the REMIC, although not at the times that a         
corresponding amount of income would be reported based on a constant yield      
method. Investors should be aware that, subject to certain specific exceptions  
in the REMIC regulations, it is not anticipated that the REMIC will sell or     
transfer or otherwise dispose of any of the underlying Mortgage Loans except    
pursuant to an exercise of the Call Right. See 'Prohibited Transactions and     
Other Possible REMIC Taxes'. In the event that the holder of the Call Right     
chooses to effect such a redemption of the underlying Mortgage Loans, the       
transactions by                                                                 

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which the Certificates are retired and the related Trust Fund terminated will   
constitute a 'qualified liquidation' of the REMIC within the meaning of Section 
860F(a)(4) of the Code.                                                         

  Taxation of Call Option Premium. Under current federal income tax law, the
REMIC will not be required to include immediately in income the option premium  
with respect to the Call Right that it is deemed to receive. Instead, such      
premium will be taken into account when the Call Right lapses, is exercised or  
is otherwise terminated with respect to the REMIC. As indicated above, an amount
equal to the option premium that is deemed to be received by the REMIC would be 
included in the REMIC's basis in the Mortgage Loans. The REMIC's recovery of    
such basis will not occur at the same rate as its inclusion in income of the    
option premium.                                                                 

As a grantor of an option, the REMIC must include the option premium in 
income when the option lapses, which with respect to the REMIC is no later than 
the redemption by a holder of the Call Right. Although the Call Right will not  
expire by its terms during the period in which the Certificates remain          
outstanding the Mortgage Assets to which the Call Right relates will be reduced 
over time through principal payments. Although it is not entirely clear whether 
the Call Right would thus be deemed to lapse as the Mortgage Loans are paid     
down, and if so, at what rate, the Depositor intends to report income to the    
REMIC based on the assumption that the Call Right lapses, and the related       
premium is recognized by the REMIC, proportionately as principal is paid on the 
Mortgage Loans (as prepayments prior to the date on which the Call Right may    
first be exercised or as scheduled principal payments or prepayments after the  
first date on which the Call Right may be exercised). There is no assurance that
the IRS would agree with this method of reporting income from the lapse of the  
Call Right, and furthermore, it should be noted that the IRS currently is       
examining the rules regarding the taxation of option premiums.                  

 If the Call Right is exercised, the REMIC will add an amount equal to the
unamortized portion of the option premium to the amount realized from the sale  
of the underlying Mortgage Loans.                                               

  If the REMIC transfers one of the underlying Mortgage Loans, such transfer
will be treated as a 'closing transaction' with respect to the option the REMIC 
is deemed to have written. Accordingly, the REMIC will recognize gain or loss   
equal to the difference between the unamortized amount of option premium and the
amount the REMIC is deemed to pay, under the rules discussed above, to be       
relieved from its obligations under the option. However, as discussed above,    
subject to certain specified exceptions (including in connection with the       
issuance of the Call Right), it is not anticipated that the REMIC will transfer 
any of the underlying Mortgage Loans. See 'Prohibited Transactions and Other    
Possible REMIC Taxes'.                                                          

    Certificateholders are urged to consult their tax advisors before purchasing
an interest in any Callable Class Certificate.                                  

TAXATION OF OWNERS OF REMIC RESIDUAL CERTIFICATES                               

1. General                                                                      

  An owner of a REMIC Residual Certificate ('Residual Owner') generally will
be required to report its daily portion of the taxable income or, subject to the
limitation described below in ' -- Taxation of Owners of REMIC Residual         
Certificates -- Basis Rules and Distributions', the net loss of the REMIC       
Mortgage Pool for each day during a calendar quarter that the Residual Owner    
owned such REMIC Residual Certificate. For this purpose, the daily portion will 
be determined by allocating to each day in the calendar quarter, using a 30 days
per month/90 days per quarter/360 days per year counting convention (unless     
otherwise disclosed in the applicable Prospectus Supplement), its ratable       
portion of the taxable income or net loss of the REMIC Mortgage Pool for such   
quarter, and by allocating the daily portions among the Residual Owners (on such
day) in accordance with their percentage of ownership interests on such day. Any
amount included in the gross income or allowed as a loss of any Residual Owner  
by virtue of this paragraph will be treated as ordinary income or loss.         
Purchasers of REMIC Residual Certificates should be aware that taxable income   
from such Certificates could exceed cash distributions thereon in any taxable   
year. For example, if Mortgage Loans are acquired by a REMIC at a discount, then
the holder of a residual interest may recognize income without corresponding    
cash distributions. This result could occur because a payment produces          
recognition of discount on the Mortgage                                         

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Loan while the payment could be used in whole or in part to make principal      
payments on REMIC Regular Certificates issued without substantial discount.     
Taxable income may also be greater in earlier years as a result of the fact that
interest expense deductions, expressed as a percentage of the outstanding       
principal amount of the REMIC Regular Certificates, will increase over time as  
the lower yielding sequences of Certificates are paid, whereas interest income  
with respect to any given fixed rate Mortgage Loan will remain constant over    
time as a percentage of the outstanding principal amount of that loan.          

Any payments received by a holder of a REMIC Residual Certificate in    
connection with the acquisition of such Certificate will be taken into account  
in determining the income of such holder for federal income tax purposes.       
Although it appears likely that any such payment would be includible in income  
immediately upon its receipt, the IRS might assert that such payment should be  
included in income over time according to an amortization schedule or according 
to some other method. Because of the uncertainty concerning the treatment of    
such payments, holders of REMIC Residual Certificates should consult their tax  
advisors concerning the treatment of such payments for income tax purposes.     

 If so specified in the applicable Prospectus Supplement for a Series, the
underlying Mortgage Loans may be subject to redemption at the direction of the  
holder of certain redemption right. As a direct owner in the underlying Mortgage
Loans for federal income tax purposes, the REMIC will also be treated as having 
written the call option on such underlying Mortgage Loans. See 'Callable Class  
Certificates'.                                                                  

2. Taxable Income or Net Loss of the REMIC Trust Fund                           

The taxable income or net loss of the REMIC Mortgage Pool will reflect a
netting of income from the Mortgage Loans, any cancellation of indebtedness     
income due to the allocation of Realized Losses to REMIC Regular Certificates,  
and deductions and losses allowed to the REMIC Mortgage Pool. Such taxable      
income or net loss for a given calendar quarter will be determined in the same  
manner as for an individual having the calendar year as his taxable year and    
using the accrual method of accounting, with certain modifications. The first   
modification is that a deduction will be allowed for accruals of interest       
(including original issue discount) on the REMIC Regular Certificates. Second,  
market discount equal to the excess of any Mortgage Loan's adjusted issue price 
(as determined under 'Taxation of Owners of REMIC Regular Certificates -- Market
Discount and Premium') over its fair market value at the time of their transfer 
to the REMIC Mortgage Pool generally will be included in income as it accrues,  
based on a constant yield and on the Prepayment Assumption. For this purpose,   
the Company intends to treat the fair market value of the Mortgage Loans as     
being equal to the aggregate issue prices of the REMIC Regular Certificates and 
REMIC Residual Certificates; if one or more classes of REMIC Regular            
Certificates or REMIC Residual Certificates are retained by the Company, it will
estimate the value of such retained interests in order to determine the fair    
market value of the Mortgage Loans for this purpose. Third, no item of income,  
gain, loss or deduction allocable to a prohibited transaction (see              
' -- Prohibited Transactions and Other Possible REMIC Taxes', below) will be    
taken into account. Fourth, the REMIC Mortgage Pool generally may not deduct any
item that would not be allowed in calculating the taxable income of a           
partnership by virtue of Code Section 703(a)(2). Fifth, the REMIC Regulations   
provide that the limitation on miscellaneous itemized deductions imposed on     
individuals by Code Section 67 will not be applied at the Mortgage Pool level to
the servicing fees paid to the Master Servicer or sub-servicers, if any. (See,  
however, ' -- Pass-Through of Servicing Fees', below.) If the deductions allowed
to the REMIC Mortgage Pool exceed its gross income for a calendar quarter, such 
excess will be the net loss for the REMIC Mortgage Pool for that calendar       
quarter.                                                                        

3. Basis Rules and Distributions                                                

 Any distribution by a REMIC Mortgage Pool to a Residual Owner will not be
included in the gross income of such Residual Owner to the extent it does not   
exceed the adjusted basis of such Residual Owner's interest in a REMIC Residual 
Certificate. Such distribution will reduce the adjusted basis of such interest, 
but not below zero. To the extent a distribution exceeds the adjusted basis of  
the REMIC Residual Certificate, it will be treated as gain from the sale of the 
REMIC Residual Certificate. (See ' -- Sales of REMIC Certificates', below.) The 
adjusted basis of a REMIC Residual Certificate is equal to the amount paid for  
such REMIC Residual Certificate, increased by amounts included in the income of 

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the Residual Owner (See ' -- Taxation of Owners of REMIC Residual               
Certificates -- Daily Portions', above) and decreased by distributions and by   
net losses taken into account with respect to such interest.                    

 A Residual Owner is not allowed to take into account any net loss for any
calendar quarter to the extent such net loss exceeds such Residual Owner's      
adjusted basis in its REMIC Residual Certificate as of the close of such        
calendar quarter (determined without regard to such net loss). Any loss         
disallowed by reason of this limitation may be carried forward indefinitely to  
future calendar quarters and, subject to the same limitation, may be used only  
to offset income from the REMIC Residual Certificate.                           

 The effect of these basis and distribution rules is that a Residual Owner
may not amortize its basis in a REMIC Residual Certificate, but may only recover
its basis through distributions, through the deduction of any net losses of the 
REMIC Mortgage Pool or upon the sale of its REMIC Residual Certificate (See     
' -- Sales of REMIC Certificates', below). The residual holder does, however,   
receive reduced taxable income over the life of the REMIC, because the REMIC's  
basis in the underlying REMIC Mortgage Pool includes the fair market value of   
the REMIC Regular Certificates and REMIC Residual Certificates.                 

4. Excess Inclusions                                                            

Any 'excess inclusions' with respect to a REMIC Residual Certificate are
subject to certain special tax rules. With respect to a Residual Owner, the     
excess inclusion for any calendar quarter is defined as the excess (if any) of  
the daily portions of taxable income over the sum of the 'daily accruals' for   
each day during such quarter that such REMIC Residual Certificate was held by   
such Residual Owner. The daily accruals are determined by allocating to each day
during a calendar quarter its ratable portion of the product of the 'adjusted   
issue price' of the REMIC Residual Certificate at the beginning of the calendar 
quarter and 120 percent of the long-term 'applicable federal rate' (generally,  
an average of current yields on Treasury securities of comparable maturity) (the
'AFR') in effect at the time of issuance of the REMIC Residual Certificate. For 
this purpose, the adjusted issue price of a REMIC Residual Certificate as of the
beginning of any calendar quarter is the issue price of the REMIC Residual      
Certificate, increased by the amount of daily accruals for all prior quarters   
and decreased by any distributions made with respect to such REMIC Residual     
Certificate before the beginning of such quarter. The issue price of a REMIC    
Residual Certificate is the initial offering price to the public (excluding bond
houses and brokers) at which a substantial amount of the REMIC Residual         
Certificates were sold.                                                         

An excess inclusion cannot be offset by deductions, losses or loss      
carryovers from other activities. For Residual Owners that are subject to tax on
unrelated business taxable income (as defined in Code Section 511), an excess   
inclusion of such Residual Owner is treated as unrelated business taxable       
income. For Residual Owners that are nonresident alien individuals or foreign   
corporations generally subject to United States 30% withholding tax, even if    
interest paid to such Residual Owners is generally eligible for exemptions from 
such tax, an excess inclusion will be subject to such tax and no tax treaty rate
reduction or exemption may be claimed with respect thereto. See ' -- Foreign    
Investors in REMIC Certificates'. Section 860E(a)(4) of the Code provides three 
rules for determining the effect on excess inclusions on the alternative minimum
taxable income of a residual holder. First, alternative minimum taxable income  
for a residual holder is determined without regard to the special rule that     
taxable income cannot be less than excess inclusions. Second, a residual        
holder's alternative minimum taxable income for a tax year cannot be less than  
excess inclusions for the year. Third, the amount of any alternative minimum tax
net operating loss deductions must be computed without regard to any excess     
inclusions.                                                                     

Although it has not done so, the Treasury also has authority to issue   
regulations that, if REMIC Residual Certificates are found in the aggregate not 
to have 'significant value', would treat as excess inclusions with respect to   
such REMIC Residual Certificates the entire daily portion of taxable income for 
such REMIC Residual Certificates. In order to have significant value, the REMIC 
Residual Certificates must have an aggregate issue price, at issuance, at least 
equal to two percent of the aggregate issue prices of all of the related REMIC  
Regular and Residual Certificates. In addition, the anticipated weighted average
life of the REMIC Residual Certificates must equal or exceed 20 percent of the  
anticipated weighted average life of the REMIC, based on the Prepayment         
Assumption and on any required or permitted clean up calls or required          
liquidation provided for in the REMIC's organizational documents. Each          
Prospectus Supplement pursuant to which REMIC Residual Certificates are offered 
will state whether                                                              

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such REMIC Residual Certificates will have, or may be regarded as having,       
'significant value' under the REMIC Regulations; provided, however, that any    
disclosure that a REMIC Residual Certificate will have 'significant value' will 
be based upon certain assumptions, and the Company will make no representation  
that a REMIC Residual Certificate will have 'significant value' for purposes of 
the above described rules or that a Residual Owner will receive distributions of
amounts calculated pursuant to those assumptions.                               

In the case of any REMIC Residual Certificates held by a real estate    
investment trust, the aggregate excess inclusions with respect to such REMIC    
Residual Certificates, reduced (but not below zero) by the real estate          
investment trust taxable income (within the meaning of Code Section 857(b)(2),  
excluding any net capital gain), will be allocated among the shareholders of    
such trust in proportion to the dividends received by such shareholders from    
such trust, and any amount so allocated will be treated as an excess inclusion  
with respect to a REMIC Residual Certificate as if held directly by such        
shareholder.                                                                    

5. Noneconomic REMIC Residual Certificates                                      

Under the REMIC Regulations, transfers of 'noneconomic' REMIC Residual  
Certificates will be disregarded for all federal income tax purposes if 'a      
significant purpose of the transfer was to enable the transferor to impede the  
assessment or collection of tax'. If such transfer is disregarded, the purported
transferor will continue to remain liable for any taxes due with respect to the 
income on such 'noneconomic' REMIC Residual Certificate. The REMIC Regulations  
provide that a REMIC Residual Certificate will be considered a noneconomic      
residual interest unless, at the time of its transfer and based on the          
Prepayment Assumption and any required or permitted clean up calls or required  
liquidation provided for in the REMIC's organizational documents, (1) the       
present value of the expected future distributions (discounted using the AFR) on
the REMIC Residual Certificate equals at least the present value of the expected
tax on the anticipated excess inclusions, and (2) the transferor reasonably     
expects that the transferee will receive distributions with respect to the REMIC
Residual Certificate at or after the time the taxes accrue on the anticipated   
excess inclusions in an amount sufficient to satisfy the accrued taxes.         
Accordingly, all transfers of REMIC Residual Certificates that may constitute   
noneconomic residual interests will be subject to certain restrictions under the
terms of the related Pooling Agreement that are intended to reduce the          
possibility of any such transfer being disregarded. Such restrictions will      
require each party to a transfer to provide an affidavit that no purpose of such
transfer is to impede the assessment or collection of tax, including certain    
representations as to the financial condition of the prospective transferee.    
Prior to purchasing a REMIC Residual Certificate, prospective purchasers should 
consider the possibility that a purported transfer of such REMIC Residual       
Certificate by such a purchaser to another purchaser at some future date may be 
disregarded in accordance with the above-described rules, which would result in 
the retention of tax liability by such purchaser. The applicable Prospectus     
Supplement will disclose whether offered REMIC Residual Certificates may be     
considered 'noneconomic' residual interests under the REMIC Regulations;        
provided, however, that any disclosure that a REMIC Residual Certificate will or
will not be considered 'noneconomic' will be based upon certain assumptions, and
the Company will make no representation that a REMIC Residual Certificate will  
not be considered 'noneconomic' for purposes of the above-described rules or    
that a REMIC Residual Owner will receive distributions calculated pursuant to   
such assumptions. See 'Foreign Investors in REMIC Certificates' below for       
additional restrictions applicable to transfers of certain REMIC Residual       
Certificates to foreign persons.                                                

6. Tax-Exempt Investors                                                         

  Generally, tax exempt organizations that are not subject to Federal income
taxation on 'unrelated business taxable income' pursuant to Code Section 511 are
treated as 'disqualified organizations' under provisions of the 1988 Act. Under 
provisions of the Pooling Agreement, such organizations generally are prohibited
from owning Residual Certificates. For Residual Owners that are subject to tax  
on unrelated business taxable income (as defined in Code Section 511), an excess
inclusion of such Residual Owner is treated as unrelated business taxable       
income. See ' -- Sales of REMIC Certificates'.                                  

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7. Real Estate Investment Trusts                                                

If the applicable Prospectus Supplement so provides, a Mortgage Pool may
hold Mortgage Loans bearing interest based wholly or partially on Mortgagor     
profits, Mortgaged Property appreciation, or similar contingencies. Such        
interest, if earned directly by a real estate investment trust ('REIT'), would  
be subject to the limitations of Code Sections 856 (f) and 856 (j). Treasury    
regulations treat a REIT holding a REMIC Residual Certificate for a principal   
purpose of avoiding such Code provisions as receiving directly the income of the
REMIC Mortgage Pool, hence potentially jeopardizing its qualification for       
taxation as a REIT and exposing such income to taxation as a prohibited         
transaction at a 100 percent rate.                                              

8. Mark-to-Market Rules                                                         

 Treasury regulations provide that any REMIC Residual Certificate acquired
after January 3, 1995 will not be treated as a security and therefore generally 
may not be marked-to-market.                                                    

SALES OF REMIC CERTIFICATES                                                     

    If a REMIC Certificate is sold, the seller will recognize gain or loss equal
to the difference between the amount realized on the sale and its adjusted basis
in the REMIC Certificate. The adjusted basis of a REMIC Regular Certificate     
generally will equal the cost of such REMIC Regular Certificate to the seller,  
increased by any original issue discount or market discount included in the     
seller's gross income with respect to such REMIC Regular Certificate and reduced
by premium amortization deductions and distributions previously received by the 
seller of amounts included in the stated redemption price at maturity of such   
REMIC Regular Certificate. The adjusted basis of a REMIC Residual Certificate   
will be determined as described under ' -- Taxation of Owners of REMIC Residual 
Certificates -- Basis Rules and Distributions', above. Gain from the disposition
of a REMIC Regular Certificate that might otherwise be treated as a capital gain
will be treated as ordinary income to the extent that such gain does not exceed 
the excess, if any, of (i) the amount that would have been includible in such   
holder's income had income accrued at a rate equal to 110% of the AFR as of the 
date of purchase over (ii) the amount actually includible in such holder's      
income. Except as otherwise provided under ' -- Taxation of Owners of REMIC     
Regular Certificates -- Market Discount and Premium' and under Code Section     
582(c), any additional gain or any loss on the sale or exchange of a REMIC      
Certificate will be capital gain or loss, provided such REMIC Certificate is    
held as a capital asset (generally, property held for investment) within the    
meaning of Code Section 1221. The distinction between a capital gain or loss and
ordinary income or loss is also relevant for other purposes, including          
limitations on the use of capital losses to offset ordinary income.             

A portion of any gain from the sale of a REMIC Regular Certificate that 
might otherwise be capital gain may be treated as ordinary income to the extent 
that such Certificate is held as part of a 'conversion transaction' within the  
meaning of Code Section 1258. A conversion transaction generally is one in which
the taxpayer has taken two or more positions in Certificates or similar property
that reduce or eliminate market risk, if substantially all of the taxpayer's    
return is attributable to the time value of the taxpayer's net investment in    
such transaction. The amount of gain so realized in a conversion transaction    
that is recharacterized as ordinary income generally will not exceed the amount 
of interest that would have accrued on the taxpayer's net investment at 120% of 
the AFR at the time the taxpayer enters into the conversion transaction, subject
to appropriate reduction for prior inclusion of interest and other ordinary     
income items from the transaction.                                              

    A taxpayer may elect to have net capital gain taxed at ordinary income rates
rather than capital gains rates in order to include such net capital gain in    
total net investment income for that taxable year, for purposes of the          
limitation on the deduction of interest on indebtedness incurred to purchase or 
carry property held for investment to a taxpayer's net investment income.       

    The Omnibus Budget Reconciliation Act of 1993 (the 'Budget Act') revised the
rules for deducting interest on indebtedness allocable to property held for     
investment. Generally, deductions for such interest are limited to a taxpayer's 
net investment income for each taxable year. As amended by the Budget Act, net  
investment income for each taxable year includes net capital gain attributable  
to the disposition of investment property only if the taxpayer elects to have   
such net capital gain taxed at ordinary income rates rather than capital gains  
rates.                                                                          

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  If a Residual Owner sells a REMIC Residual Certificate at a loss, the loss
will not be recognized if, within six months before or after the sale of the    
REMIC Residual Certificate, such Residual Owner purchases another residual      
interest in any REMIC or any interest in a taxable mortgage pool (as defined in 
Code Section 7701(i)) comparable to a residual interest in a REMIC. Such        
disallowed loss will be allowed upon the sale of the other residual interest (or
comparable interest) if the rule referred to in the preceding sentence does not 
apply to that sale. While the Committee Report states that this rule may be     
modified by Treasury regulations, the REMIC Regulations do not address this     
issue and it is not clear whether any such modification will in fact be         
implemented or, if implemented, what the precise nature or effective date of it 
would be.                                                                       

    The 1988 Act makes transfers of a residual interest to certain 'disqualified
organizations' subject to an additional tax on the transferor in an amount equal
to the maximum corporate tax rate applied to the present value of the total     
anticipated excess inclusions (discounted using the applicable Federal rate)    
with respect to such residual interest for the periods after the transfer. For  
this purpose, 'disqualified organizations' includes the United States, any state
or political subdivision of a state, any foreign government or international    
organization or any agency or instrumentality of any of the foregoing; any tax- 
exempt entity (other than a Code Section 521 cooperative) which is not subject  
to the tax on unrelated business income; and any rural electrical and telephone 
cooperative. The anticipated excess inclusions must be determined as of the date
that the REMIC Residual Certificate is transferred and must be based on events  
that have occurred up to the time of such transfer, the Prepayment Assumption,  
and any required or permitted clean up calls or required liquidation provided   
for in the REMIC's organizational documents. The tax generally is imposed on the
transferor of the REMIC Residual Certificate, except that it is imposed on an   
agent for a disqualified organization if the transfer occurs through such agent.
The Pooling Agreement requires, as a prerequisite to any transfer of a Residual 
Certificate, the delivery to the Trustee of an affidavit of the transferee to   
the effect that it is not a disqualified organization and contains other        
provisions designed to render any attempted transfer of a Residual Certificate  
to a disqualified organization void. For purposes of the affidavit, the Pooling 
Agreement also treats an 'electing large partnership' as defined in Section     
775(a) of the Code as if it were a 'disqualified organization.'                 

    In addition, if a 'pass-through entity' includes in income excess inclusions
with respect to a REMIC Residual Certificate, and a disqualified organization is
the record holder of an interest in such entity, then a tax will be imposed on  
such entity equal to the product of (i) the amount of excess inclusions on the  
REMIC Residual Certificate that are allocable to the interest in the            
pass-through entity held by such disqualified organization and (ii) the highest 
marginal federal income tax rate imposed on corporations. A pass-through entity 
will not be subject to this tax for any period, however, if the record holder of
an interest in such entity furnishes to such entity (i) such holder's social    
security number and a statement under penalties of perjury that such social     
security number is that of the record holder or (ii) a statement under penalties
of perjury that such record holder is not a disqualified organization. For these
purposes, a 'pass-through entity' means any regulated investment company, real  
estate investment trust, trust, partnership or certain other entities described 
in Section 860E(e)(6) of the Code. In addition, a person holding an interest in 
a pass-through entity as a nominee for another person shall, with respect to    
such interest, be treated as a pass-through entity.                             

PASS-THROUGH OF SERVICING FEES                                                  

The general rule is that Residual Certificateholders take into account  
taxable income or net loss of the related REMIC Mortgage Pool. Under that rule, 
servicing compensation of the Company and the subservicers (if any) would be    
allocated to the holders of the REMIC Residual Certificates, and therefore would
not affect the income or deductions of holders of REMIC Regular Certificates.   
However, in the case of a 'single-class REMIC', such expenses and an equivalent 
amount of additional gross income will be allocated among all holders of REMIC  
Regular Certificates and REMIC Residual Certificates for purposes of the        
limitations on the deductibility of certain miscellaneous itemized deductions by
individuals contained in Code Sections 56(b)(1) and 67. Generally, any holder of
a REMIC Certificate who is an individual, estate or trust will be able to deduct
such expenses in determining regular tax liability only to the extent that such 
expenses together with certain other miscellaneous itemized deductions of such  
individual, estate or trust exceed 2% of adjusted gross income; such a holder   
may not deduct such                                                             

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expenses to any extent in determining liability for alternative minimum tax.    
Accordingly, REMIC Residual Certificates, and REMIC Regular Certificates        
receiving an allocation of servicing compensation, may not be appropriate       
investments for individuals, estates or trusts, and such persons should         
carefully consult with their own tax advisors regarding the advisability of an  
investment in such Certificates.                                                

A 'single-class REMIC' is a REMIC that either (i) would be treated as a 
pass-through trust under the provisions of Treasury Regulation Section          
301.7701-4(c) in the absence of a REMIC election, or (ii) is substantially      
similar to such a pass-through trust and is structured with the principal       
purpose of avoiding the allocation of investment expenses to holders of REMIC   
Regular Certificates. Unless otherwise stated in the related Prospectus         
Supplement, the Company intends to treat a REMIC Mortgage Pool as other than a  
'single-class REMIC', consequently allocating servicing compensation expenses   
and related income amounts entirely to REMIC Residual Certificates and in no    
part to REMIC Regular Certificates.                                             

PROHIBITED TRANSACTIONS AND OTHER POSSIBLE REMIC TAXES                          

  The Code imposes a tax on REMIC Mortgage Pools equal to 100 percent of the
net income derived from 'prohibited transactions'. In general, a prohibited     
transaction means the disposition of a Mortgage Loan other than pursuant to     
certain specified exceptions, the receipt of income from a source other than a  
Mortgage Loan or certain other permitted investments, the receipt of            
compensation for services, or gain from the disposition of an asset purchased   
with the payments on the Mortgage Loans for temporary investment pending        
distribution on the REMIC Certificates. The Code also imposes a 100 percent tax 
on the value of any contribution of assets to the REMIC after the 'start-up day'
(the day on which the regular and residual interests are issued), other than    
pursuant to specified exceptions, and subjects 'net income from foreclosure     
property' to tax at the highest corporate rate. It is not anticipated that a    
REMIC Mortgage Pool will engage in any such transactions or receive any such    
income.                                                                         

TERMINATION OF A REMIC TRUST FUND                                               

 In general, no special tax consequences will apply to a holder of a REMIC
Regular Certificate upon the termination of the REMIC Mortgage Pool by virtue of
the final payment or liquidation of the last Mortgage Loan remaining in the     
REMIC Mortgage Pool. If a Residual Owner's adjusted basis in its REMIC Residual 
Certificate at the time such termination occurs exceeds the amount of cash      
distributed to such Residual Owner in liquidation of its interest, then,        
although the matter is not entirely free from doubt, it appears that the        
Residual Owner would be entitled to a loss (which would be a capital loss) equal
to the amount of such excess.                                                   

REPORTING AND OTHER ADMINISTRATIVE MATTERS OF REMICS                            

 Reporting of interest income, including any original issue discount, with
respect to REMIC Regular Certificates is required annually, and may be required 
more frequently under Treasury regulations. In addition to those holders of     
REMIC Regular Certificates to whom information reporting generally applies,     
certain holders of REMIC Regular Certificates who are generally exempt from     
information reporting on debt instruments, such as corporations, banks,         
registered securities or commodities brokers, real estate investment trusts,    
registered investment companies, common trust funds, charitable remainder       
annuity trusts and unitrusts, will be provided interest and original issue      
discount income information and the information set forth in the following      
paragraph upon request in accordance with the requirements of the Treasury      
regulations. The information must be provided by the later of 30 days after the 
end of the quarter for which the information was requested, or two weeks after  
the receipt of the request. The REMIC Mortgage Pool must also comply with rules 
requiring it to report to the Treasury Department the amount of original issue  
discount and the issue date for each REMIC Certificate issued at more than a de 
minimis discount.                                                               

  The REMIC Regular Certificate information reports must include a statement
of the 'adjusted issue price' of the REMIC Regular Certificate at the beginning 
of each accrual period. In addition, the reports must include information       
necessary to compute the accrual of any market discount that may arise upon     
secondary trading of REMIC Regular Certificates. Because exact computation of   
the accrual of market discount on a constant yield method would require         
information relating to the holder's purchase price                             

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which the REMIC Mortgage Pool may not have, it appears that this provision will 
only require information pertaining to the appropriate proportionate method of  
accruing market discount.                                                       

   The responsibility for complying with the foregoing reporting rules will be
borne by the Company.                                                           

 For purposes of the administrative provisions of the Code, REMIC Mortgage
Pools will be treated as partnerships and the holders of Residual Certificates  
will be treated as partners. Unless otherwise stated in the applicable          
Prospectus Supplement, the Company will file federal income tax information     
returns on behalf of the related REMIC Mortgage Pool, and will be designated as 
agent for, and will act on behalf of the 'tax matters person' with respect to   
the REMIC Mortgage Pool in all respects.                                        

 As agent for the tax matters person, the Company will, subject to certain
notice requirements and various restrictions and limitations, generally have the
authority to act on behalf of the REMIC and the Residual Owners in connection   
with the administrative and judicial review of items of income, deduction, gain 
or loss of the REMIC Mortgage Pool, as well as the REMIC Mortgage Pool's        
classification. Residual Owners will generally be required to report such REMIC 
Mortgage Pool items consistently with their treatment on the REMIC Mortgage     
Pool's federal income tax information return and may in some circumstances be   
bound by a settlement agreement between the Master Servicer, as agent for the   
tax matters person, and the IRS concerning any such REMIC Mortgage Pool item.   
Adjustments made to the REMIC Mortgage Pool tax return may require a Residual   
Owner to make corresponding adjustments on its return, and an audit of the REMIC
Mortgage Pool's tax return, or the adjustments resulting from such an audit,    
could result in an audit of a Residual Owner's return.                          

BACKUP WITHHOLDING WITH RESPECT TO REMIC CERTIFICATES                           

    Payments of interest and principal on REMIC Regular Certificates, as well as
payments of proceeds from the sale of REMIC Certificates, may be subject to the 
'backup withholding tax' under Section 3406 of the Code if recipients of such   
payments fail to furnish to the payor certain information, including their      
taxpayer identification numbers, or otherwise fail to establish an exemption    
from such tax. Any amounts deducted and withheld from a distribution to a       
recipient would be allowed as a credit against such recipient's federal income  
tax. Furthermore, certain penalties may be imposed by the IRS on a recipient of 
payments that is required to supply information but that does not do so in the  
proper manner.                                                                  

FOREIGN INVESTORS IN REMIC CERTIFICATES                                         

1. REMIC Regular Certificates                                                   

    Except as qualified below, payments made on a REMIC Regular Certificate to a
REMIC Regular Certificateholder that is not a U.S. Person, as hereinafter       
defined (a 'Non-U.S. Person'), or to a person acting on behalf of such a        
Certificateholder, generally will be exempt from U.S. federal income and        
withholding taxes, provided (a) the holder of the Certificate is not subject to 
U.S. tax as a result of a connection to the United States other than ownership  
of such Certificate, (b) the holder of such Certificate signs and delivers a    
statement under penalties of perjury that certifies that such holder is a       
Non-U.S. Person, and provides the name and address of such holder (this         
statement is generally made on IRS Form W-8BEN and must be updated whenever     
required information has changed or within 3 calendar years after the statement 
is first delivered), and (c) the last U.S. Person (or in certain circumstances a
qualified withholding agent that is not a U.S. Person) in the chain of payment  
to the holder received such statement from such holder or a financial           
institution holding on its behalf and does not have actual knowledge that such  
statement is false. If the holder does not qualify for exemption, distributions 
of interest, including distributions in respect of accrued original issue       
discount, to such holder may be subject to a withholding tax rate of 30 percent,
subject to reduction under any applicable tax treaty.                           

Special rules apply to partnerships, estates and trusts, and in certain 
circumstances certifications as to foreign status and other matters may be      
required to be provided by partners and beneficiaries thereof.                  

  'U.S. Person' means (i) a citizen or resident of the United States, (ii) a
corporation or partnership (including any entity treated as a partnership or    
corporation for federal income tax purposes) created or organized in or under   
the laws of the United States, any state or the District of Columbia, or (iii)  
an estate or trust that is subject to U.S. federal income tax regardless of the 
source of its income.                                                           

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Holders of REMIC Regular Certificates should be aware that the IRS might
take the position that exemption from U.S. withholding taxes does not apply to  
such a holder that also directly or indirectly owns 10 percent or more of the   
REMIC Residual Certificates of a particular Series of Certificates. Further, the
foregoing rules will not apply to exempt a United States shareholder of a       
controlled foreign corporation from taxation on such United States shareholder's
allocable portion of the interest or original issue discount income earned by   
such controlled foreign corporation.                                            

2. REMIC Residual Certificates                                                  

    Amounts paid to a Residual Owner that is a Non-U.S. Person generally will be
treated as interest for purposes of applying the withholding tax on Non-U.S.    
Persons with respect to income on its REMIC Residual Certificate. However, it is
unclear whether distributions on REMIC Residual Certificates will be eligible   
for the general exemption from withholding tax that applies to REMIC Regular    
Certificates as described above. Treasury regulations provide that, for purposes
of the portfolio interest exception, payments to the foreign owner of a REMIC   
Residual Certificate are to be considered paid on the obligations held by the   
REMIC, rather than on the Certificate itself. Such payments would thus only     
qualify for the portfolio interest exception if the underlying obligations held 
by the REMIC would so qualify. Such withholding tax generally would be imposed  
at a rate of 30 percent but would be subject to reduction under any tax treaty  
applicable to the Residual Owner. However, there is no exemption from           
withholding tax nor may the rate of such tax be reduced, under a tax treaty or  
otherwise, with respect to any distribution of income that is an excess         
inclusion. See ' -- Taxation of Owners of REMIC Residual Certificates -- Excess 
Inclusions'.                                                                    

    Certain restrictions relating to transfers of REMIC Residual Certificates to
and by investors who are not U.S. Persons are also imposed by the REMIC         
Regulations. First, transfers of REMIC Residual Certificates to Non-U.S. Persons
that have 'tax avoidance potential' are disregarded for all federal income tax  
purposes. If such transfer is disregarded, the purported transferor of such a   
REMIC Residual Certificate to a Non-U.S. Person would continue to remain liable 
for any taxes due with respect to the income on such REMIC Residual Certificate.
A REMIC Residual Certificate has tax avoidance potential unless, at the time of 
the transfer, the transferor reasonably expects that the REMIC will distribute  
to the transferee amounts that will equal at least 30 percent of each excess    
inclusion, and that such amounts will be distributed at or after the time at    
which the excess inclusion accrues and not later than the close of the calendar 
year following the calendar year of accrual. This rule does not apply to        
transfers if the income from the REMIC Residual Certificate is taxed in the     
hands of the transferee as income effectively connected with the conduct of a   
U.S. trade or business. Second, if a Non-U.S. Person transfers a REMIC Residual 
Certificate to a U.S. Person, and the transfer has the effect of allowing the   
transferor to avoid tax on accrued excess inclusions, that transfer is          
disregarded for all federal income tax purposes and the purported Non-U.S.      
Person transferor continues to be treated as the owner of the REMIC Residual    
Certificate. Thus, the REMIC's liability to withhold 30 percent of the accrued  
excess inclusions is not terminated even though the REMIC Residual Certificate  
is no longer held by a Non-U.S. Person.                                         

NEW WITHHOLDING REGULATIONS                                                     

The Treasury Department has issued new final regulations which revise   
procedures for complying with, or obtaining exemptions under, the withholding,  
backup withholding and information reporting rules described above. Prospective 
investors are urged to consult their tax advisors regarding the procedures for  
obtaining an exemption from withholding under the new regulations.              

STATE AND LOCAL TAXATION                                                        

 Many states do not automatically conform to changes in the federal income
tax laws. Consequently, a REMIC Mortgage Pool which would not qualify as a fixed
investment trust for federal income tax purposes may be characterized as a      
corporation, a partnership, or some other entity for purposes of state income   
tax law. Such characterization could result in entity level income or franchise 
taxation of a REMIC Mortgage Pool formed in, owning mortgages or property in, or
having servicing activity performed in a state without conforming REMIC         
provisions in its income or franchise tax law. Further,                         

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REMIC Regular Certificateholders resident in nonconforming states may have their
ownership of REMIC Regular Certificates characterized as an interest other than 
debt of the REMIC such as stock or a partnership interest. Investors are advised
to consult their tax advisors concerning the state and local income tax         
consequences of their purchase and ownership of REMIC Regular Certificates.     

CALL RIGHT                                                                      

The holder of the Call Right will be treated as having purchased a call 
option on all the underlying Mortgage Loans. The price paid by the holder of the
Call Right to purchase such call option will be treated as an option premium and
accordingly will be added to the purchase price of the Mortgage Loans (in       
addition to any exchange fee) if the Mortgage Loans are purchased upon exercise 
of the Call Right, and will be treated as a loss as the Call Right lapses. For a
discussion of when the Call Right may be deemed to lapse, see 'Callable Class   
Certificates' above. Assuming that the underlying Mortgage Loans, if acquired,  
would be a capital asset in such holder's hands, then loss recognized with      
respect to such lapse will be treated as a capital loss.                        

In light of the above, a thrift, REMIC, real estate investment trust or 
regulated investment company should consult its tax advisors before purchasing  
any Call Class.                                                                 

METHODS OF DISTRIBUTION 

Certificates are being offered hereby in Series from time to time (each 
Series evidencing a separate Mortgage Pool) through any of the following        
methods:                                                                        

      1. By negotiated firm commitment underwriting and public reoffering by
underwriters;                                                           

      2. By agency placements through one or more placement agents primarily
with institutional investors and dealers; and                           

     3. By placement directly by the Company with institutional investors.

    A Prospectus Supplement will be prepared for each Series which will describe
the method of offering being used for that Series and will set forth the        
identity of any underwriters thereof and either the price at which such Series  
is being offered, the nature and amount of any underwriting discounts or        
additional compensation to such underwriters and the proceeds of the offering to
the Company, or the method by which the price at which the underwriters will    
sell the Certificates will be determined. Each Prospectus Supplement for an     
underwritten offering will also contain information regarding the nature of the 
underwriters' obligations, any material relationship between the Company and any
underwriter and, where appropriate, information regarding any discounts or      
concessions to be allowed or reallowed to dealers or others and any arrangements
to stabilize the market for the Certificates so offered. In firm commitment     
underwritten offerings, the underwriters will be obligated to purchase all of   
the Certificates of such Series if any such Certificates are purchased.         
Certificates may be acquired by the underwriters for their own accounts and may 
be resold from time to time in one or more transactions, including negotiated   
transactions, at a fixed public offering price or at varying prices determined  
at the time of sale.                                                            

  Underwriters and agents may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended (the 'Act'), 
or to contribution with respect to payments which such underwriters or agents   
may be required to make in respect thereof.                                     

If a Series is offered other than through underwriters, the Prospectus  
Supplement relating thereto will contain information regarding the nature of    
such offering and any agreements to be entered into between the Company and     
purchasers of Certificates of such Series.                                      

TRANSFERABILITY OF CERTIFICATES 

The Company anticipates that the Certificates will be sold primarily to 
institutional investors. Purchasers of Certificates, including dealers, may,    
depending on the facts and circumstances of such purchases, be deemed to be     
'underwriters' within the meaning of the Act, in connection with reoffers and   
sales by them of Certificates. Certain purchasers will be required to give the  
Company prior notice of                                                         

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their intention to resell their Certificates, and to represent to the Company   
that they will observe certain Prospectus delivery and anti-manipulative        
requirements of the Act and the Securities Exchange Act of 1934, as amended. The
Company will charge any Certificateholder requesting amended or updated         
Prospectuses or Prospectus Supplements all expenses incurred by the Company for 
preparation and delivery of such documents. Certificateholders should consult   
with their legal advisors in this regard prior to any such reoffer or resale.   

LEGAL MATTERS 

Certain legal matters will be passed upon for the Company by Thomas G.  
Lehmann, General Counsel, Vice President and Secretary of the Company or by     
Richard Careaga, Assistant General Counsel, Second Vice President and Assistant 
Secretary of the Company, and by its special counsel, Orrick, Herrington &      
Sutcliffe LLP, San Francisco, California.                                       

FINANCIAL INFORMATION 

    The Company has determined that its financial statements are not material to
the offering made hereby. However, any prospective investor who desires to      
review financial information concerning the Company will be provided, upon      
request, with a copy of the consolidated balance sheet of the Company as of     
December 31, 2000 or the end of its last fiscal year, whichever is later, and a 
copy of the most recent statement of earnings of the Company. Such requests     
should be directed to Washington Mutual Mortgage Securities Corp., Controller's 
Department, 75 North Fairway Drive, Vernon Hills, Illinois 60061.               

ADDITIONAL INFORMATION

   This Prospectus, together with the Prospectus Supplement for each Series of
Certificates, contains a summary of the material terms of the applicable        
exhibits to the Registration Statement and the documents referred to herein and 
therein. Copies of such exhibits are on file at the offices of the Securities   
and Exchange Commission in Washington, D.C., may be obtained at rates prescribed
by the Commission upon request to the Commission and may be inspected, without  
charge, at the Commission's offices.                                            

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INDEX OF TERMS

  Set forth below is a list of certain of the more significant terms used in
this Prospectus and the pages on which the definitions of such terms may be     
found.                                                                          

                                                                [Download Table]

                                         PAGE
                                          -- 
                                             
Act....................................   84 
Additional Collateral Loans............   10 
Additional Collateral..................   10 
Advance Claims Endorsement.............   47 
Advances...............................   11 
AFR....................................   77 
Asset Conservation Act.................   61 
Bankruptcy Instrument..................   45 
Bankruptcy Loss........................   45 
Basic Prepayment Assumption............   15 
Budget Act.............................   79 
Buydown Fund...........................    9 
Buydown Fund Account...................   21 
Buydown Loans..........................    9 
Callable Class Certificate.............   74 
CERCLA.................................   61 
Certificate Account....................   28 
Certificate Administrator..............    8 
Certificate Administrator Fee..........   11 
Certificate Interest Rate..............    8 
Closing Date...........................   21 
Code...................................   39 
Commission.............................   10 
Company................................    8 
Compensating Interest..................   14 
Conversion Fee.........................   12 
Cooperative............................    8 
Cooperative Loan.......................    8 
Cooperative Note.......................    8 
Curtailment............................   14 
Custodial Account for P&I..............   25 
Defaulted Mortgage Loss................   45 
Determination Date.....................   31 
Distribution Date......................   20 
Distribution Period....................   30 
DOL....................................   62 
Due Date...............................   14 
Eligible Investments...................   27 
ERISA..................................   62 
Exemption Rating Agencies..............   63 
Extraordinary Losses...................   45 
FDIC...................................   16 
FHA....................................    9 
FHA Approved Mortgagees................   16 
FHA Insurance Policies.................    9 
Freddie Mac Approved Mortgagees........   16 
Fannie Mae Approved Mortgagees.........   16 
Fraud Instrument.......................   45 
Fraud Loss.............................   45 
Garn-St. Germain Act...................   59 
Indemnified Parties....................   36 
Insurance Proceeds.....................   25 
Investment Account.....................   27 
Investment Period......................   27 
IRS....................................   68 
Lenders................................   16 
Letter of Credit.......................   50 
Letter of Credit Bank..................   50 
Liquidation Proceeds...................   25 
Loss...................................   41 
Master Servicer........................    8 
Master Servicing Fee...................   11 
MERS...................................   21 
MERS'r' System.........................   21 
Mortgage Interest Rate.................    9 
Mortgage Loan Servicing Group..........    8 
Mortgage Loans.........................    8 
Mortgage Notes.........................    8 
Mortgage Pool Insurance Policy.........   46 
Mortgaged Properties...................    8 
Mortgages..............................    8 
Net Rate...............................   24 
Non-U.S. Person........................   82 
OID Regulations........................   67 
Parties in Interest....................   62 
Paying Agent...........................   20 
Payoff.................................   14 
Plan Assets............................   62 
Plans..................................   62 
Pooling Agreement......................   11 
Prepayment Assumption..................   69 
Primary Insurance Policy...............   41 
Principal Prepayment...................   15 
PTCE...................................   65 
PTE....................................   63 
RCRA...................................   61 
Record Date............................   20 
Relief Act.............................   60 
REMIC..................................   67 
REMIC Certificates.....................   67 
REMIC Mortgage Pool....................   67 
REMIC Provisions.......................   67 
REMIC Regulations......................   67 
Reserve Account........................   48 
Reserve Fund...........................   50 
Residual Owner.........................   75 

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                                                                [Download Table]

                                         PAGE
                                             
                                          -- 
Retained Yield.........................   25 
Sellers................................    8 
Seller/Servicers.......................    8 
Selling and Servicing Contracts........   19 
Senior Certificates....................   47 
Servicer...............................    9 
Servicing Contracts....................   11 
Servicing Entity.......................    8 
Servicing Fee..........................   11 
Special Hazard Instrument..............   45 
Special Hazard Loss....................   45 
Subordinated Certificates..............   47 
Title V................................   60 
Title VIII.............................   60 
Trustee................................   11 
Trust Fund.............................   11 
UCC....................................   57 
Underwriter's Exemption................   63 
VA.....................................    9 
VA Guaranties..........................    9 
VA Loans...............................    9 
Withdrawal Date........................   26 

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424B5
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WAMU MORTGAGE PASS-THROUGH CERTIFICATES 
SERIES 2001-AR4 

WASHINGTON MUTUAL MORTGAGE SECURITIES CORP. 
DEPOSITOR AND MASTER SERVICER 

$706,710,100
(APPROXIMATE) 

--------------------- 
PROSPECTUS SUPPLEMENT 
--------------------- 

Underwriters

GREENWICH CAPITAL MARKETS, INC. 
KEEFE, BRUYETTE & WOODS, INC. 
SANDLER O'NEILL & PARTNERS, L.P.

Dealer

WAMU CAPITAL
A DIVISION OF WASHINGTON MUTUAL BANK, FA

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY    
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE
NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.                

    WE ARE NOT OFFERING THE OFFERED CERTIFICATES IN ANY STATE WHERE THE OFFER IS
NOT PERMITTED.                                                                  

WE DO NOT CLAIM THE ACCURACY OF THE INFORMATION IN THIS PROSPECTUS      
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AS OF ANY DATE OTHER THAN THE DATES  
STATED ON THEIR RESPECTIVE COVERS.                                              

  DEALERS WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN ACTING AS
UNDERWRITERS OF THE OFFERED CERTIFICATES AND WITH RESPECT TO THEIR UNSOLD       
ALLOTMENTS OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING THE OFFERED       
CERTIFICATES WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS UNTIL          
FEBRUARY 9, 2002.                                                               

STATEMENT OF DIFFERENCES
------------------------- 

The registered trademark symbol shall be expressed as.............     'r'      
The dagger symbol shall be expressed as...........................     'D'      

Dates Referenced Herein   and   Documents Incorporated by Reference

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		11/25/06		49		50
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		11/25/04		49		50
		11/25/03		49		50			424B5
		11/25/02		49		50			424B5,  8-K
		2/9/02		143
		12/26/01		1		5			424B5
		12/1/01		37
		11/14/01		6		37			8-K
Filed on:		11/13/01
		11/9/01		1					424B5,  8-K
		11/1/01		4		16			8-K
		10/31/01		11		35
		10/5/01		1		55
		9/30/01		34
		9/11/01		14
		7/5/01		119
		12/31/00		34		139
		11/13/00		117
		2/4/00		44
		1/5/00		119
		12/31/99		34
		7/21/97		117
		9/30/96		115
		1/3/95		133
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